5 things to Consider When Budgeting for Your Embedded Network

As we slip into 2026 many strata schemes are already beginning to plan or review their budgets for 2026/27. For those operating an embedded network it’s important to factor in several emerging cost drivers and operational considerations. Here are five key areas to keep in mind:

1. Rising Energy Costs

Wholesale electricity prices have risen significantly in recent years. Since 2020, prices have tripled, peaking at just under $140/MWh in 2023, and although they have stabilised, they remain well above pre-2023 levels.

One major advantage of an embedded network is the ability to bulk purchase electricity. Schemes consuming more than 50 MWh per year can choose their retailer and negotiate competitive contract rates.

Working with a trusted partner like EnergyTec can help you source suitable retailers, compare offers, and secure favourable terms. If your current energy contract is approaching renewal, allocating budget to a professional procurement service can deliver measurable value through more competitive pricing and improved contract terms.

2. Upcoming Compliance Obligations

The Alternative Electricity Services (AES) regulations are anticipated to come into effect during the 2026/27 financial year. These will introduce new obligations, including registration requirements and ongoing administrative tasks.

Whether these activities are managed internally by the strata manager

or delivered by a service provider such as EnergyTec, additional costs are expected. Energy Policy WA has previously indicated potential compliance costs of $10–$37 per lot, per year, although some industry forecasts suggest this could be higher. Non-compliance with registration requirements under the regulation may result in penalties of up to $100,000.

To stay ahead, EnergyTec is advising schemes to plan for a significant increase (over and above CPI) in embedded network operational charges to accommodate the new regulatory requirements for example a government registration fee.

3. Infrastructure upgrades

Ageing metering infrastructure poses risks for strata schemes, from inaccurate readings to meter failures, which ultimately affect billing accuracy and fairness for lot owners.

When setting budgets, consider allocating funds for:

• Individual meter replacements

• Whole-of-site metering upgrades, where required

Advanced metering infrastructure (AMI) allows for remote meter reads, improved billing accuracy, faster fault detection and resolution and reduced onsite access requirements. Adequate metering is also required for measurement of renewable generation and usage and billing integration. Schemes with antiquated metering assets may benefit from planning ahead for these upgrades.

4. Renewable Energy Investments

If your scheme is exploring renewables, including solar PV, batteries (BESS), or EV charging infrastructure, it’s important to provision for the early-stage work as well as implementation.

Budget considerations may include:

• Feasibility studies and modelling

• Implementation of advanced metering infrastructure

• Integration works

• Maintenance planning

Renewable generation can reduce grid energy purchases and may even create revenue opportunities through storage and grid export, making this a long-term investment worth evaluating properly.

5. Cost Recovery Models

Finally, review how your scheme recovers electricity costs. Are common-area loads being allocated appropriately across lot owners?

With the right model, many strata communities can:

• Offer residents lower energy prices than standard tarifis

• Generate a surplus, helping reduce other strata expenses or generating funds to support your 10-year maintenance plan

• Optimising your cost-recovery approach ensures your embedded network continues to support the financial health of the scheme.

Preparing an accurate embedded network budget requires a combination of operational insight, regulatory awareness, and forward planning. By taking these factors into account, strata schemes can manage risk, reduce cost pressures, and position themselves for long-term sustainability.

If you would like support identifying the full range of costs to include in your embedded network budget, EnergyTec can assist with modelling, compliance advice, and procurement strategy.

Please get in touch to discuss your requirements.

This article is bought to you by SCA (WA) sponsor EnerguTec.