Information on electricity licensing exemptions for sellers and suppliers

Anyone supplying, selling, generating or transmitting electricity in Victoria must hold a licence granted by us, or be exempt from that requirement.

What are licensing exemptions and embedded networks?

In Victoria, if you are engaged in the generation, supply, sale, transmission, or distribution of electricity, or the sale or supply of natural gas or operation of a natural gas distribution pipeline, you need a licence from the Essential Services Commission.

It is prohibited to engage in these activities without a licence unless you have either been specifically granted an exemption or are eligible for a general exemption.

Certain activities related to the small-scale sale, distribution and generation of electricity are eligible for a general exemption from licence requirements under the provisions the General Exemption Order 2022 (GEO 2022). While people covered by the General Exemption Order may be exempt from the legal requirement to have a licence, this does not mean that they are exempt from regulation.

Key changes in the General Exemption Order 2022

In October 2018, the Victorian Government announced an election commitment to restrict embedded networks in new residential apartment buildings, with limited exemptions.

The GEO 2022 implements phase one of the reforms, restricting the sale of energy in relation to the new embedded networks (where there are 10 or more residential customers) unless the exempt person can meet specific conditions, including a new renewable energy condition.

Persons who are undertaking sale in relation to an embedded network pursuant to an exemption under the GEO 2017 will not, however, need to comply with the renewable energy condition, as this only applies to new embedded networks as of 1 January 2023.

The GEO 2022 requires that electricity sold or supplied by an exempt person, including new embedded networks which have to meet the new renewable energy condition, must not exceed the Victorian Default Offer which is the relevant maximum price formulated by the Essential Services Commission. 

The GEO 2022 also exempts persons that sell or supply electricity for the purposes of charging an electric vehicle from having to obtain a licence.

The General Exemption Order 2022 (GEO 2022) commences on 1 January 2023.

Transitional provisions under the GEO 2022 give certainty to existing exemption holders that their exemptions under the GEO 2017 will continue to apply. However, from 1 January 2023, anyone relying on an exemption under the GEO 2022 will be responsible for ensuring they register with the commission (if applicable) and comply with any applicable conditions.

Additional information about the changes are included in this Department of Environment, Land, Water and Planning fact sheet.

New renewable energy condition

The new renewable energy condition requires that 100 per cent of electricity sold by an exempt person at a new embedded network site, with 10 or more residential customers, must come from renewable energy sources.  

The condition requires that at least five per cent of the electricity sold to residential customers must be generated using onsite renewable energy facilities and that the balance is covered by offsite renewable energy.

An exempt person at a new embedded network must keep records of the following for at least seven years and provide a summary of this information to the commission annually:

• the amount of electricity supplied to that new embedded network from a licensed distribution company’s distribution system;
• the amount of electricity supplied to that new embedded network that is generated by means of that new embedded network’s onsite renewable energy facilities;
• the amount of electricity the exempt person sells to residential customers in that new embedded network including the amount of that electricity that is generated by means of that new embedded network’s onsite renewable energy facilities;
• any qualifying LGCs voluntarily surrendered by the exempt person;
• any voluntary surrender arrangement; and
• any GreenPower arrangement.

Electric vehicle (EV) charging stations

The sale or supply of electricity from EV charging stations now have their own deemed exemption categories in the GEO 2022.

Each year on or before 1 February, such deemed exempt persons must provide information to the commission, in the form required by the commission, with details of:

• the number of customers ​to whom they have sold electricity and
• the number of electric vehicles that have been charged with that electricity.

What are my obligations as an exempt person? 

Even if you are exempt from holding an electricity licence, you must still comply with obligations that are applicable to your category of exemption/s. This ensures customers of exempt electricity sellers and suppliers have similar protections to other Victorian electricity customers.

Some and distribution activities covered by the General Exemption Order 2022 may require exempt persons to comply with either the provisions of the Energy Retail Code of Practice or the Electricity Distribution Code of Practice that are specified by the commission. In addition, all persons eligible for the general exemptions must comply with other conditions specified in the General Exemption Order.

The commission has produced the Registration Guideline for Exempt Persons, which has been updated to reflect the GEO 2022, to assist you to understand your obligations on matters such as:

• registering your exemption with the commission
• joining the commission's approved customer dispute resolution scheme - Energy and Water Ombudsman Victoria
• maximum pricing
• provision of information requirements
• disconnection.

We have also developed a range of documents to assist in the operation of your embedded network including sample bill, disconnection, and service agreement templates.

What do I do if I fall into the 'registration exemption' category?

You must become a member of an approved dispute resolution body. We have approved the Energy and Water Ombudsman (Victoria) as a dispute resolution scheme for electricity licensing exemptions. Note, this does not apply to solar power purchase agreement providers, community energy projects or generators that are exempt under the General Exemption Order 2022.

Also ensure you register with us for a licensing exemption (if you are eligible to register).

If you are exempt electricity seller, you must comply with the relevant clauses of the Energy Retail Code of Practice.

If you are an exempt electricity supplier, you must also comply with the relevant clauses of the Electricity Distribution Code of Practice.

Some embedded networks may not need to be registered

If there are less than 10 residences/tenants, you may still be sold and supplied electricity via an embedded network. However, the seller and supplier are not required to register with us. Even if they are not on the register, they still need to abide by rules that protect your consumer rights.

Deemed exemption

If you fall into this category, you don't need to register with us for a licensing exemption. However, you still need to comply with the General Exemption Order.

You may fall into the deemed exemption category if you are a business or person that:

• sells or supplies metered electricity to fewer than 10 small commercial/retail customers
• sells or supplies metered electricity to fewer than 10 residential customers, or to occupants of holiday accommodation on a short-term basis (this excludes retirement villages, caravan parks, holiday parks, residential land lease parks, and manufactured home estates. If you fall into one of these excluded areas, read our Registration Guideline for Exempt Persons for more information)
• temporarily sells or supplies electricity on construction sites
• sells or supplies electricity to a related company (for example, a parent company selling electricity to a subsidiary company)
• sells or supplies electricity ancillary to telecommunication services, such as data centres
• sells or supplies electricity that is used to charge an electric vehicle.

You may also fall into the ‘deemed exemption’ category if you are a government agency selling or supplying metered electricity to non-residential customers for purposes that are ancillary to their primary functions or objectives under the laws under which they are established.

What you need to do if you fall into the 'deemed exemption' category

Most exempt persons which are eligible for a ‘deemed exemption’ are required to become a member of the commission's approved dispute resolution body. We have approved the Energy and Water Ombudsman (Victoria) as a dispute resolution scheme for electricity licensing exemptions. The General Exemption Order specifies which exemption categories must comply with this condition. You are not required to be a member of the Energy and Water Ombudsman (Victoria) if you are selling or supplying electricity at an electric vehicle charging station.

You must become a member of an approved dispute resolution body. We have approved the Energy and Water Ombudsman (Victoria) as a dispute resolution scheme for electricity licensing exemptions. 

If the condition applies to you as an exempt electricity seller, you must comply with the relevant clauses of the Energy Retail Code of Practice.

If the condition applies to you as an exempt electricity supplier, you must also comply with the relevant clauses the Electricity Distribution Code of Practice. 

Multiple activity exemption

You may fall into this category if you generate or distribute electricity on:

• a site you don't own or occupy
• a portion of a site that you occupy (but don't own) for the purpose of generating and distributing electricity.

 You may also fall into this category if you supply or sell electricity: 

• to the owner or occupier of the premises on which the generation occurs
• to a licensed retailer.

What you need to do if you fall into the 'multiple activity exemption' category

You must register with us for a licensing exemption and comply with the conditions of your exemption as shown in the General Exemption Order.

Contact us if you have questions

If you're not sure if you qualify for an exemption, email us at exemptionregister@esc.vic.gov.au.