Brownfield Development Conversion Planning

3 September 2018

In an earlier post we discussed converting an existing (or Brownfield) building to an electrical embedded network to take advantage of the financial opportunities that can come with controlling your own electricity distribution and on-selling.

In a nutshell, all that’s required is the installation of the single point of connection to the electricity supply, the Parent Meter, and the replacement of the current electricity meters with upgraded ones. Sounds easy when you put it that way, but there are several things that need to happen before we get to install new metering!

The first thing you need to determine is whether your building will work as an embedded network. A quick call to Energy On, along with some basic information about your development, is all that is needed for us to look at the potential of your building.

Once the potential is identified, Energy On will prepare a detailed proposal that will outline the costs of implementing the conversion and all the steps. Importantly, with a variety of models available, it is possible for your body corporate to convert your building for a zero-up-front cost.

The first step after a decision has been made by the Committee to upgrade your building to an electrical embedded network is for your Owners Corporation / Body Corporate or Strata to pass a Special Resolution at a General or Special General Meeting. The rules for special resolutions vary from state to state and your manager will be best placed to advise you on this process. This step can seem onerous and is often the longest part of any conversion process. Our experience in this area suggests that the better the potential return to the building financially, the simpler the process to pass the special resolution. This process is made easier when there are no up-front costs to deal with.

The detailed proposal will have identified any electrical works that are required and will have included a schedule for the changeover. All these works are managed by Energy On with the assistance of your Manager. Whilst the process of the Special Resolution is proceeding, detailed implementation plans will be prepared so that the site is ready to go as soon as the resolution passes.

Whilst the Special Resolution is passed by Owners, the regulations also require that all Occupiers, including tenants, then have an opportunity to consent to the network. This is a process of explanation and rate offers that is managed by Energy On. The conversion cannot be commenced until this process has been completed and the outcome provided to the Australian Energy Regulator (AER) as part of the application for a Network Exemption. The network exemption is required to establish the network. Outside of Victoria, a retail exemption is also required. Within Victoria there are ESC Vic exemption requirements on top of the AER.

Once the regulatory permissions are in place, the electrical works can commence. These are generally scheduled to cause minimum disruption to residents and can be achieved in a few days with only occasional power outages required to perform the works.

Once the works are done, the site is ready to have the meters read and for the billing cycles to commence. The time from the special resolution being passed to the site being live and generating an income stream could be as short as 6 – 8 weeks. All managed for you by Energy On and possibly for no up-front cost. Sounds easy to us!