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The difference between Integrated and Embedded Energy Networks

You may have heard the terms ‘Integrated Energy Network’ and ‘Embedded Energy Network’ and think they sound like the same thing. While both power apartment buildings and other multi-tenant buildings, there are a number of differences, which can ultimately affect the end-user’s bill and value of the building.

According to the Australian Energy Regulator (AER) embedded networks generally power apartment blocks, retirement villages, caravan parks and shopping centres. The owner of a site with an embedded network usually buys energy from an energy retailer and then ‘on-sells’ the energy to the customers at the site.

Source General Manager Growth, Alex Bruce said embedded networks have received a bad reputation, and that’s why Source prefers to operate an Integrated Energy Network, to provide developers, strata managers and tenants with a better quality of service.

“As an Integrated Energy Network we design, build and own the infrastructure for older and new apartments and residences,” Alex said.

“We not only deliver quality, reliable energy to customers, we also operate and manage the customer service, billing and quality control, as an energy provider of choice here in Western Australia.”

Integrated Energy Networks generally power apartment blocks and retirement villages and also use renewable energy, however they operate differently. Integrated Energy Networks engage directly with the individual energy user, rather than selling their services to the building owner, who on-sells energy to the consumer (or tenant).

By engaging with the energy provider direct, tenants receive their energy direct from the source, and benefit from the direct relationship with their provider and are able to see their individual energy usage.

Alex said energy providers, such as Source Energy Co. (Source) operate as an Integrated Energy Network to help developers reduce capital cost, improve design outcomes, and ultimately provide cleaner, greener, and more affordable energy to its customers.

Alex said designing, building, owning and operating the Integrated Energy Network has a range of benefits to the consumer, as it can reduce energy costs, and also benefit the developers and strata managers.

“For developers, strata managers and builders, it also has a range of benefits, as Source lowers electricity tariffs and improves the value of the property,” Alex said.

“Having ownership allows us to improve space efficiency; freeing up space in meter boards, potential headworks savings, provides advanced ‘smart building’ technology and improved energy services, meaning less headaches for building owners and strata managers.”

It has been widely reported that embedded networks are not necessarily as beneficial for the end-user, the customer living in the building. For example a new study by the Victoria Energy Policy Centre, commissioned by the Victorian Government last year and released exclusively to 7.30 ABC, found customers with embedded networks were paying up to $439 a year more than the best deal they could get if they were able to switch retailers.

Late last year, the Australian Energy Market Commission (AEMC) released draft changes to try regulate embedded networks in the National Electricity Market, however penalties for breaches are limited and it has been difficult for the Australian Energy Regulator (AER) to police the sector.

Reports have also suggested many customers with embedded networks have unfortunately been subject to poorer service, price gouging and have found it difficult to choose another energy provider.

Source is however governed by Western Australian laws and regulations which includes a price cap on tariffs such that Sources’ tariffs do not exceed tariffs offered by Synergy.  Further, Source undertakes to save customers money by providing a minimum 5% discount to the regulated Synergy tariffs.

Source is a Western Australian-based utility company that builds, owns, operates, and maintains integrated energy networks enabling us to deliver a superior supply of electricity and service to our customers. These integrated energy networks typically incorporate advanced energy infrastructure, such as roof top solar photovoltaics (PV), battery storage, and smart metering.

Rather than just stepping in to sell hardware at the start or electricity to consumers once the building is commissioned, Source’s unique approach enables developers to achieve better design outcomes while ensuring customers have access to optimised energy solutions for years to come.

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