The Netherlands Authority for Consumers & Markets (ACM) is preparing a feed-in tariff for large electricity producers . This tariff should ensure that the costs for expansion and reinforcement of the electricity grid are distributed differently, whereby producers and foreign customers also pay their share. This is NedZero's view on this.
NedZero's point of view
The Netherlands Authority for Consumers and Markets (ACM) is preparing a feed-in tariff for large electricity producers. This tariff should ensure that the costs for expanding and strengthening the electricity grid are distributed differently, with producers and foreign customers also paying their share.
We remain curious about the underlying purpose of a possible feed-in tariff. The study examines various aspects such as the energy bill for consumers and the impact on the grid, but it remains unclear which considerations actually underlie these choices. A feed-in tariff will have to be passed on by producers to consumers. There is therefore a risk of simply pumping money around: extra administrative burdens and less efficient incentives.
In politics, there is a lot of attention for the rising grid tariffs. That is understandable. What is often forgotten is that the current extreme costs for grid reinforcement are mainly a result of years of underinvestment by grid operators, they are therefore 'inefficient costs' and they should not be included in the tariffs. These costs should be borne by the shareholders (the state and the municipalities/provinces). By financing part of the grid costs from general resources, these costs can be distributed more fairly across society, which would lead to lower costs for consumers.
The feed-in tariff is negotiable as far as we are concerned, but only in the context of a complete system change to a renewable energy supply, specifically for new projects and based on efficient costs. New projects are those for which the bidding and/or FID (final investment decision) takes place after the determination of a possible feed-in tariff. It is undesirable to introduce a feed-in tariff for existing projects, since these existing assets have not been able to take such costs into account.
In the transition to a renewable electricity supply, the method decisions must also be reconsidered, as well as the roles and interaction between the ACM, the ministry and the grid operators. An adjustment of the method decisions could mean that the current huge investments in grid reinforcement can be pre-financed by the shareholders, with a repayment via the grid tariffs spread over the period needed to make the grid ready for a fully renewable electricity system.
Finally, we would like to emphasize that location incentives in a feed-in tariff will have a very limited influence. The decision on locations lies largely with provinces and municipalities, and entrepreneurs are dependent on this. Offshore power sockets and locations for offshore wind are completely outside the influence of the tender winner in question and should therefore be exempted from a feed-in tariff.
ACM tariff decisions
ACM has published the tariff proposals of the regional grid operators and TenneT (the operator of the national high-voltage grid) on its website . The costs of grid operators must be paid jointly by all grid users (households and businesses) from the transport tariffs. ACM will assess the tariff proposals of the grid operators and is expected to publish the tariff decisions at the end of November 2024. At the same time as the entry into force of the 2025 tariffs, the new tariff structure will come into effect from 1 January 2025, which will stimulate efficient use of the grid.
In TennT's proposal, the transport costs for the average extra high voltage (EHS) connected parties to TenneT will decrease by 8% and these costs will increase by at least 0.4% for high voltage (HS) connected parties.
The ACM already announced in September 2024 that the transport tariffs for households and companies will increase by approximately 11% in 2025. The tariff developments differ per type of customer and per grid operator. For an average household, the tariffs will increase by approximately €60 per year (including VAT). Customers of TenneT's (extra) high-voltage grid will pay approximately €2.6 billion in transport costs in 2025, just like last year.
"We remain curious about the underlying purpose of a possible feed-in tariff. The study examines various aspects such as the energy bill for consumers and the impact on the grid, but it remains unclear which considerations actually underlie these choices. A feed-in tariff will have to be passed on by producers to consumers. There is therefore a risk of simply pumping money around: extra administrative burdens and less efficient incentives."Bekijk al het nieuws
