There is a clear increase in commercial and retail vacancy rates in many parts of the world so landlords are now looking towards energy on-selling in order to fill revenue gaps. This is the main reason why the embedded networks showed an increase in usability in the last 2 years.
Embedded networks setup basically involves an electrical infrastructure change, seeing facility managers involved in implementation and planning. Electricity supply cost is normally broken down into 3 components:
- The contract raters or raw energy costs that are negotiated with the licensed trailer – 45% of bill
- Network costs, which are local distributor costs – 45% of bill
- Renewable and market charges – 10% of bill
It does not matter what energy type you use. A small energy user that normally uses under 100,000 kWh per year will receive a bundle rate. A larger user will gain unbundled account rates that highlight every single charge component on the bill.
All the large energy users will pay lower electricity costs when compared with smaller users. That is mainly because of a lower charge that is negotiated for the supply. You can even end up with a difference of around 50% based on state or network zone. The difference is practically the embedded network profitability potential. We can say that the main advantage associated with the embedded network is the fact that we have this potential lower charge by up to 50 percent.
The embedded network can easily be created where the building has a number of different tenants and is fed through one supply point that is the MSB (main switch board). There is a parent meter that will be installed between the MSB and the incoming supply with the purpose of recording the supply that comes into the building. Site owners will buy electricity at parent meters as large market users, on-selling energy towards tenants at a smaller market rate.
Local network service providers will legally manage supplies that reach the site boundary. Infrastructure downstream and MSB will remain the sole responsibility of a site owner. Site electrical risks or infrastructure downstream will not change the operation of the site’s embedded network. Managing embedded networks will not include additional liabilities that are not already present at a site.
Metering of the common and tenant area is necessary. Tenants that will buy the supply from landlords will have a special private meter inside the home, recording usage. Private metering will replace common area metering. A provider will be able to shut down power without needing permission from local supply authorities. If the tenant will buy from another retailer, he will receive energy through meters managed and owned by network service providers.
Facility managers basically have complete control over the electricity supplies of the tenants. The tenant can easily get an upgrade directly from the landlord whenever necessary without having to refer to local supply authorities. That would save a lot of time and will reduce costs. We have the same principal that applies to common areas.