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In October 2018, the Victorian Government announced an election commitment to ban embedded networks in new residential apartment buildings, with appropriate exemptions for buildings that use renewable energy microgrids to deliver low-cost renewable energy to apartment buildings.
The Government’s election commitment was made in response to ongoing concerns that customers currently living in embedded networks:
- pay higher prices
- do not have access to the same level of consumer protections as other Victorians.
An Expert Panel (Panel) leading the Embedded Networks Review (Review) developed recommendations to the Government on:
- how best to implement the ban
- how to ensure that, to the fullest extent practicable, embedded network customers in existing residential settings can access the same competitive retail offers and consumer protections as standard electricity customers.
After an extensive review, the Panel developed a comprehensive package of recommendations to the Victorian Government on how to best implement its commitment to ban embedded networks in new residential apartment buildings.
View the 2022 Final Recommendations Report:
Victorian Government response to the review and implementing the reforms
The Victorian Government considered the recommendations and released its formal response in July 2022. The government supported all the recommendations and committed to implementing the reforms across two phases.
Phase 1
The first phase of reforms is complete.
Since 1 January 2023, the electricity General Exemption Order 2022 bans new embedded networks with ten or more residential customers unless they meet a renewable energy condition. This condition requires 100% renewable energy for residential usage at the site, with at least 5% on-site renewable energy generation. You can read more about the renewable energy condition and changes made in the GEO 2022 factsheet below.
Phase 2
Phase 2 will implement the Review’s other recommendations, including a comprehensive legislative package to improve outcomes for all customers in embedded networks.
The phase two reforms will include:
- Transitioning new and existing embedded networks into Victoria’s licensing framework
- Strengthening consumer protections, so embedded network customers have the same or very similar protections as other Victorians
- Enabling access to competitive retail market offers so customers living in embedded networks can choose their retailer
- Ensuring appropriate regulatory oversight.
Read the Victorian Government response:
A note on terminology: In the Final Report, the Panel use the terms ‘local energy networks’ and ‘local energy service’ (or ‘LES’) to describe embedded networks after the recommendations have been implemented.
In the Government response, the original wording used by the Panel in their recommendations has been retained. However, the government refers only to ‘embedded networks’ for clarity of expression and ease of reference.
General Exemption Order
General Exemption Order 2022 (GEO 2022)
The revised electricity GEO 2022 was published in the Government Gazette on 29 September 2022, with the new GEO 2022 condition taking effect from 1 January 2023.
Access the GEO 2022: Victorian Government Gazette | No. G 39.
General Exemption Order 2025 (GEN GEO 2025)
The Victorian Government has also made a gas embedded network GEN GEO 2025. The GEN GEO 2025 only applies to existing gas embedded networks which were operating on or before 25 February 2025. This will partly address Recommendation 13 of the Review by providing protections to gas embedded network customers.
Access the GEN GEO 2025: Victorian Government Gazette | No. S 69.
Other embedded network reforms
These reforms are on top of reform the government has already made to improve customer outcomes in the embedded network market, such as:
- expanding access to the dispute resolution services of the Energy and Water Ombudsman (Victoria)
- ensuring fairer prices by setting the Victorian Default Offer (VDO) as the maximum price for embedded network customers in September 2020; and
- the Energy Fairness Plan reforms in 2021, banning harmful sales practices by energy retailers and strengthening the power, oversight, monitoring and enforcement role of the Essential Services Commission (ESC).
Once all the Panel’s recommendations are implemented, the residential embedded network market will be fairer, with improved consumer protections and increased access to affordable and renewable energy for all Victorian embedded network customers.
For more information, visit the Engage Victoria website for the Embedded Networks Review.
2017 Review of the General Exemption Order
The then Department of Environment, Land, Water and Planning (DELWP) undertook a review of the GEO 2002 to determine if it was meeting the needs of consumers and embedded networks. The review was informed by stakeholder consultation, including submissions on an issues paper and draft position paper and stakeholder workshops.
DELWP's final position was published in August 2017.
As a result of that review, the GEO 2017 was made, which can be found here:
The General Exemption Order has been amended twice:
- on 30 May 2019, to freeze the applicable transitional maximum price at the local retailer standing offer rates that were in effect before the introduction of the Victorian Default Offer, while the Essential Services Commission reviews pricing in embedded networks
- on 9 July 2019, to make amendments to further clarify the transitional maximum price.
Page last updated: 28/02/25