Alternative Electricity Services (AES) Framework in Western Australia: What It Means for Embedded Electricity Networks
Western Australia is entering a new regulatory era for embedded electricity networks. The introduction of the Alternative Electricity Services (AES) framework represents the most significant reform to electricity distribution arrangements within buildings and precincts in the State.
For many years, embedded electricity networks operated under licensing exemptions. With the introduction of the AES framework, these networks will now move into a structured regulatory regime governed by the Economic Regulation Authority (ERA).
The recent release of draft AES regulations in Western Australia provides the clearest picture yet of how decentralised electricity supply systems will be regulated going forward.
For organisations operating embedded networks, precinct energy systems or other decentralised electricity infrastructure, understanding this transition is critical.
The evolution of the Alternative Electricity Services framework can be understood through three phases:
- What was — embedded electricity networks operating under licensing exemptions
- What is — the transition period under the AES framework
- What comes next — formal AES regulation and compliance
Climate Change Response (CCR) has been working with organisations across Western Australia throughout this transition, helping developers, infrastructure owners and precinct operators understand the regulatory changes and prepare for AES compliance.
Phase 1: What Was Embedded Electricity Networks Under Licensing Exemptions
Embedded electricity networks have long been used within developments where electricity is purchased at a single connection point and distributed internally to residents or tenants.
These networks are commonly found in:
- apartment developments
- commercial office complexes
- mixed-use precincts
- retirement villages
- university campuses
While the model enables efficient distribution of electricity within a property, embedded electricity networks historically operated under licensing exemptions under the Electricity Industry Act 2004.
This meant operators were not regulated in the same way as licensed electricity retailers.
As decentralised electricity systems expanded across Western Australia, regulators began reviewing whether the exemption model continued to provide adequate consumer protections.
In 2019, Western Australia initiated a review of electricity licensing exemptions and emerging electricity supply models. The review recognised that embedded networks were becoming increasingly common as developments integrated technologies such as rooftop solar, battery storage and local energy management systems.
During this early phase of reform discussions, organisations operating embedded networks began assessing how regulatory changes could affect governance structures, billing practices and operational oversight.
CCR worked with a number of organisations during this period to interpret the emerging policy direction and understand how potential regulatory reforms could affect embedded electricity network operations.
Phase 2: What Is — The Transition to the Alternative Electricity Services Framework
The next stage of reform occurred in 2023, when amendments to the Electricity Industry Act 2004 formally introduced the Alternative Electricity Services (AES) framework.
The AES framework creates a regulatory pathway for electricity supply arrangements that fall outside the traditional retailer licensing model. This includes embedded electricity networks and other decentralised electricity systems operating within a single property or precinct.
Under the new framework, embedded electricity networks are referred to as Single Property Networks (SPNs).
The AES framework aims to introduce governance and consumer protection obligations while recognising the operational characteristics of decentralised electricity systems.
Recognising that operators would require time to adapt to regulatory changes, Energy Policy WA introduced the Voluntary Embedded Networks Code of Practice in 2024.
The voluntary code enables embedded network operators to begin aligning their practices with future regulatory expectations in areas such as:
- electricity billing transparency
- governance and operational oversight
- customer protections and dispute resolution
- operational reporting and accountability
This transition period has allowed operators to begin strengthening governance structures before AES registration becomes mandatory.
Phase 3: What Comes Next — AES Regulations and Formal Compliance
The release of draft AES regulations in Western Australia marks the next major milestone in the reform process.
Once implemented, operators of Single Property Networks will be required to register with the Economic Regulation Authority and comply with a formal AES Code of Practice governing how embedded electricity networks operate.
The regulations introduce structured oversight across several areas including:
- governance frameworks for embedded network operators
- transparency in electricity billing practices
- consumer protection obligations
- operational monitoring and reporting
AES registration is expected to open in the second half of 2026, with mandatory compliance anticipated from 2027.
For organisations operating embedded electricity networks, this represents a significant shift from exemption-based operation to formal regulatory oversight.
Operators will need to review operational practices across several areas including governance frameworks, billing transparency, consumer engagement and compliance reporting.
Organisations that began aligning with the Voluntary Embedded Networks Code are likely to be better positioned for the transition.
CCR’s Role Across the AES Reform Journey
Climate Change Response (CCR) has been supporting organisations across Western Australia throughout the evolution of the Alternative Electricity Services framework, from early policy discussions through to AES compliance preparation.
During the early exemption review phase, CCR advised developers, infrastructure owners and embedded network operators on potential regulatory changes and the implications for decentralised electricity systems.
As the AES framework was introduced and the Voluntary Embedded Networks Code of Practice was released, CCR worked with multiple organisations to interpret the voluntary requirements and align operational practices with emerging governance, transparency and consumer protection expectations.
These engagements have helped operators strengthen governance frameworks and build organisational readiness ahead of AES registration.
CCR is now supporting organisations in AES compliance preparation, including assessing regulatory exposure, reviewing governance structures and preparing operational systems for registration with the Economic Regulation Authority.
In parallel, CCR has been working with state-level departments and industry stakeholders to assist with regulatory preparedness and implementation considerations associated with the AES framework.
To support the ongoing management of decentralised electricity systems under the new regulatory regime, CCR has also developed integrated digital platforms and AI-enabled analytics that help organisations manage governance monitoring, regulatory compliance and operational reporting for embedded electricity networks.
By combining regulatory advisory expertise with digital compliance systems, CCR enables organisations to move beyond manual processes and implement structured management of embedded electricity network operations under the AES framework.
Why the AES Framework Matters for Western Australia’s Energy System
The Alternative Electricity Services framework reflects a broader transformation occurring across electricity markets worldwide.
Energy systems are shifting toward decentralised models where generation, storage and energy management increasingly occur within buildings and precincts.
Embedded electricity networks play an important role in enabling this transition because they allow developments to integrate technologies such as:
- rooftop solar generation
- battery energy storage
- smart energy management systems
- precinct-scale energy infrastructure
However, as decentralised electricity systems expand, regulators must ensure that consumers supplied through embedded networks receive protections comparable to those connected to licensed retailers.
The AES framework provides this balance by enabling innovation in decentralised energy systems while introducing governance and consumer protection obligations.
Western Australia’s regulatory approach is widely regarded as one of the most comprehensive frameworks for regulating embedded electricity networks in Australia.
Preparing for AES Compliance
With AES registration expected to open in 2026, organisations operating embedded electricity networks now have a limited window to prepare.
Preparation typically involves:
- reviewing governance structures for embedded network operations
- assessing billing transparency and customer engagement practices
- implementing monitoring and reporting systems
- aligning operational processes with the AES Code of Practice
Early preparation enables operators to identify compliance gaps and strengthen governance frameworks well before AES registration becomes mandatory.
CCR continues to work with organisations across Western Australia to navigate this transition and prepare embedded electricity networks for the next phase of electricity market regulation.