The Energy
Regulation
and Markets
Review
Editor
David L Schwartz
Law Business Research
The Energy Regulation
and Markets Review
Reproduced with permission from Law Business Research Ltd.
This article was first published in The Energy Regulation and Markets Review,
1st edition (published in June 2012 – editor David L Schwartz).
For further information please email
[email protected]
2
The Energy
Regulation
and Markets
Review
Editor
David L Schwartz
Law Business Research Ltd
Contents
The Law Reviews
The Mergers and Acquisitions Review
The Restructuring Review
The Private Competition Enforcement Review
The Dispute Resolution Review
The Employment Law Review
The Public Competition Enforcement Review
The Banking Regulation Review
The International Arbitration Review
The Merger Control Review
The Technology, Media and
Telecommunications Review
The Inward Investment and
International Taxation Review
The Corporate Governance Review
The Corporate Immigration Review
The International Investigations Review
The Projects and Construction Review
The International Capital Markets Review
The Real Estate Law Review
The Private Equity Review
The Energy Regulation and Markets Review
www.TheLawReviews.co.uk
4
Contents
Publisher
Gideon Roberton
business development manager
Adam Sargent
marketing managerS
Nick Barette, Katherine Jablonowska
marketing assistant
Robin Andrews
editorial assistant
Lydia Gerges
production manager
Adam Myers
production editor
Joanne Morley
subeditor
Anna Andreoli
editor-in-chief
Callum Campbell
managing director
Richard Davey
Published in the United Kingdom
by Law Business Research Ltd, London
87 Lancaster Road, London, W11 1QQ, UK
© 2012 Law Business Research Ltd
No photocopying: copyright licences do not apply.
The information provided in this publication is general and may not apply in a specific
situation. Legal advice should always be sought before taking any legal action based
on the information provided. The publishers accept no responsibility for any acts or
omissions contained herein. Although the information provided is accurate as of
June 2012, be advised that this is a developing area.
Enquiries concerning reproduction should be sent to Law Business Research, at the
address above. Enquiries concerning editorial content should be directed
to the Publisher – [email protected]
ISBN 978-1-907606-35-9
Printed in Great Britain by
Encompass Print Solutions, Derbyshire
Tel: 0844 2480 112
5
acknowledgements
Afridi & Angell
Anderson Mōri & Tomotsune
Banwo & Ighodalo
D’Empaire Reyna Abogados
Djingov, Gouginski, Kyutchukov & Velichkov,
attorneys and counsellors at law
Goltsblat BLP
Gómez-Pinzón Zuleta
GonzÁlez Calvillo, SC
Hengeler Mueller
Hogan Lovells
Kvale Advokatfirma DA
L O Baptista Schmidt Valois Miranda Ferreira Agel
LALIVE
Latham & Watkins AARPI
Latham & Watkins LLP
Makarim & Taira S
Mannheimer Swartling
i
Acknowledgements
Minter Ellison
Paksoy Attorneys at Law
PotamitisVekris Law Partnership
Schoenherr Attorneys at Law
Stek
Stikeman Elliott LLP
Trilegal
White & Case LLP (South Africa)
Zul Rafique & Partners
ii
contents
Editor’s Preface
���������������������������������������������������������������������������������������������������ix
David L Schwartz
Chapter 1
Australia������������������������������������������������������������������������������ 1
Mitzi Gilligan, Eliza Bartlett, Carolyn Vigar, Darshini
Nanthakumar, Rudi Kruse, Genevieve Watt and Nicholas Liau Chapter 2
Austria�������������������������������������������������������������������������������� 23
Bernd Rajal and Guenther Grassl
Chapter 3
brazil����������������������������������������������������������������������������������� 34
Guilherme Guerra D’Arriaga Schmidt
Chapter 4
Bulgaria����������������������������������������������������������������������������� 45
Yassen Spassov Chapter 5
Canada�������������������������������������������������������������������������������� 62
Patrick Duffy, Brad Grant, Erik Richer La Flèche
and Glenn Zacher Chapter 6
Colombia��������������������������������������������������������������������������� 76
Patricia Arrázola-Bustillo and Fabio Ardila Chapter 7
France��������������������������������������������������������������������������������� 86
Fabrice Fages and Myria Saarinen Chapter 8
Germany����������������������������������������������������������������������������� 97
Dirk Uwer Chapter 9
Greece������������������������������������������������������������������������������� 108
Euripides Ioannou and Dimitra Rachouti Chapter 10
India����������������������������������������������������������������������������������� 120
Akshay Jaitly, Sitesh Mukherjee, Neeraj Menon
and Vibhu Sharma iii
Contents
Chapter 11
Indonesia������������������������������������������������������������������������� 132
Pudji W Purbo
Chapter 12
Italy������������������������������������������������������������������������������������ 146
Simone Monesi Chapter 13
Japan����������������������������������������������������������������������������������� 159
Reiji Takahashi, Atsutoshi Maeda, Shun Hirota
and Yuko Suzuki Chapter 14
Malaysia���������������������������������������������������������������������������� 171
Lukman Sheriff Alias Chapter 15
Mexico������������������������������������������������������������������������������� 179
Gonzalo A Vargas Chapter 16
Netherlands����������������������������������������������������������������� 190
Jan Erik Janssen and Martha Brinkman Chapter 17
Nigeria������������������������������������������������������������������������������� 199
Ken Etim and Ayodele Oni Chapter 18
Norway������������������������������������������������������������������������������ 210
Per Conradi Andersen and Christian Poulsson Chapter 19
Russia���������������������������������������������������������������������������������� 219
Evgeny Danilov Chapter 20
South Africa������������������������������������������������������������������ 237
Shamilah Grimwood and Zahra Omar Chapter 21
Spain������������������������������������������������������������������������������������ 257
Antonio Morales
Chapter 22
Sweden������������������������������������������������������������������������������ 266
Hans Andréasson, Martin Gynnerstedt and Malin Håkansson Chapter 23
Switzerland������������������������������������������������������������������ 278
Georges P Racine Chapter 24
Turkey������������������������������������������������������������������������������� 290
Zeynel Tunç iv
Contents
Chapter 25
United Arab Emirates������������������������������������������������ 302
Masood Afridi and Haroon Baryalay Chapter 26
United Kingdom���������������������������������������������������������� 319
Elisabeth Blunsdon Chapter 27
United States���������������������������������������������������������������� 334
Michael J Gergen, Natasha Gianvecchio and David L Schwartz Chapter 28
Venezuela����������������������������������������������������������������������� 344
Arnoldo Troconis Appendix 1
About the authors���������������������������������������������������� 357
Appendix 2
Contributing Law Firms’ contact details����� 374
v
Editor’s Preface
Safe and reliable delivery of electricity and natural gas has been the hallmark of energy
policy and regulation in the industrialised world for the past 75 years. More recently,
regulators, policymakers and the industry began to focus their attention on ways to
improve economic efficiency, increase productivity and reduce costs through a seemingly
endless series of reforms.
In some countries, utilities were encouraged to enhance transmission and
interconnection facilities with neighbouring systems in order to pool energy resources.
More recently, utilities have been encouraged to participate in regional organisations to
buy and sell power, and to administer transmission, dispatch and scheduling of a variety
of energy products. Certain countries have encouraged utility efficiency through a variety
of performance-based incentives.
Policymakers have tried to reduce the barriers to entry by requiring
non‑discriminatory treatment among transmission users, and prohibiting affiliate abuse.
Utilities were encouraged to unbundle certain utility services; in some cases, regulators
required the divestiture of generation or transmission facilities. Utilities have even been
encouraged to provide retail wheeling services to facilitate competition for delivery
service customers.
Many markets have developed competitive bid-based electricity auctions to set
energy and capacity prices, which often take into consideration the cost of transmission
congestion. These markets tend to be administered by independent or governmental
entities that do not have a market position bias. Clearing prices set in these markets are
intended to send price signals to maximise short-term efficiency (scheduling, dispatching
and selling energy), as well as long-term efficiency (building new or retiring old generation
and transmission facilities).
In certain countries, lawmakers and policymakers have encouraged developers
to build and finance new renewable resources and to develop more effective means
of conserving energy, through a variety of ‘carrots’ and ‘sticks’. These measures have
included subsidies such as feed-in tariffs and renewable energy credits, as well as utility
ix
Editor’s Preface
requirements through renewable portfolio standards. In certain competitive markets,
conserving electricity has been converted into a demand-side product (‘negawatts’) with
near or equal value to supply-side generation (megawatts). New ‘smartgrid’ technologies
have been created to increase the efficiency of transmission, generation, distribution and
individual consumers’ energy use.
Now, however, the myriad of efficiency mechanisms faces new and unprecedented
challenges. Transmission and distribution systems are ageing and desperately need
upgrading. Severe new environmental requirements are leading to mass retirements of
baseload coal-generation resources. Fuel prices are volatile, adding long-term uncertainty
to energy prices. Spikes in the price of raw materials are making the development of
new infrastructure all the more expensive. Cyber-security threats are exposing the
vulnerabilities of our energy networks. And the global economy continues to threaten
our ability to obtain the necessary credit to build and finance energy infrastructure.
This is the sobering backdrop for this inaugural edition of The Energy Regulation
and Markets Review. I would like to thank all of the authors for their thoughtful
consideration of these difficult challenges. As can be seen in these chapters, we have
much to consider and resolve before we can achieve the kinds of energy security and
efficiency that we have been pursuing.
David L Schwartz
Latham & Watkins LLP
Washington, DC
June 2012
x
Chapter 16
Netherlands
Jan Erik Janssen and Martha Brinkman 1
IOVERVIEW
The Netherlands has an energy industry with an annual output of between €35 and €40
billion. Specifically, the Netherlands is the largest producer and exporter of gas in the
European Union. Although gas reserves are diminishing, the Netherlands is expected to
maintain its position as a net exporter until around 2025. A contractual arrangement
between the state, Shell and ExxonMobil – often referred to as the ‘gas building’ –
determines that NAM (the Dutch national gas company) is the producer of the vast
Groningen balancing field and that GasTerra is responsible for the sale of that output.
NAM is a 50/50 joint venture between Shell and ExxonMobil and GasTerra a 50/50
joint venture between NAM and the state.
In 2010, 126.6 billion kWh of electricity and 83.9 billion cubic metres of natural
gas were produced in the Netherlands. Due to its natural gas reserves, the Netherlands can
provide for most of its domestic demand for energy and a large portion of its electricity
is produced in gas-fired plants.
The energy markets in the Netherlands have been completely liberalised. Former
regional energy monopolies have been broken up and the largest production and supply
companies are now part of multinationals such as GDF Suez, RWE and Vattenfall. The
bulk of the energy regulation in the Netherlands relates to transmission and distribution
networks.
i
Legislative framework
The legislative framework for the energy sector in the Netherlands is largely based on
the European electricity and gas directives. These directives have been implemented in
the Electricity Act 1998 (‘the Electricity Act’) and the Gas Act (together, ‘the Acts’). At
1
Jan Erik Janssen is a partner and Martha Brinkman is a senior associate at Stek.
190
Netherlands
the time of writing a bill for the implementation of the European 3rd Energy Package
in the Acts is pending before the Senate. Implementing rules relating primarily to tariffs,
conditions and processes relating to the networks have been laid down in secondary
legislation based on the Acts, such as codes adopted by the Netherlands Competition
Authority (‘the NCA’).
The legal framework for exploration and production activities in the Netherlands
(including the Dutch part of the continental shelf ) is laid down in the Mining Act and
secondary legislation – the Mining Decree and Mining Regulation – based thereon.
In addition a Heat Act is expected to enter into force in the foreseeable future that
will give consumers security of supply and will prescribe that the price for the supply of
heat to small-scale users will be set on the basis of the principle that they will not pay
more than consumers connected to the gas network.
IIREGULATION
i
The regulators
In the Netherlands there is no separate energy regulator. The regulation of the electricity
and gas markets has been entrusted to the Minister of Economic Affairs, Agriculture
and Innovation (‘the Minister’) and the NCA. The NCA is divided into a number of
departments, including the Office of Energy and Transportation Regulation.
With respect to Dutch energy policy the Minister, by law, must publish an ‘energy
report’ at least every four years, giving guidance on decisions to be taken by the Dutch
government relating to a reliable, sustainable and efficient energy supply. The Minister is
responsible for most of the regulation in the energy sector, including the Acts.
The NCA is responsible for the enforcement of general competition law on the
basis of the Netherlands Competition Act.2 In its capacity as energy regulator under
the Acts, the NCA adopts the tariff and technical codes governing the transmission and
distribution of electricity and gas. It also sets the regulated tariffs for each distribution
company. The NCA enjoys considerable powers to sanction infringements or violations
of the Acts, including the power to impose administrative fines, a binding order or an
order sanctioned by periodic penalty payments. The NCA is also engaged in handling
complaints about distribution companies and the monitoring of the obligations of
suppliers to so-called small-scale users (consumers and small businesses). From 1 January
2013 the NCA, the Independent Post and Telecommunications Authority and the
Consumer Authority will merge per into one authority: the Netherlands Authority for
Consumers and Markets.
ii
Regulated activities
In the Netherlands, network services performed by distribution companies (network
operators) are regulated, whereas other activities have been liberalised.
Pursuant to the Acts, the owner of a transmission or distribution network must
appoint an independent network operator to operate its networks. This operator must
2
See the Netherlands chapter of The Public Competition Enforcement Review (Fourth edition).
191
Netherlands
perform its tasks on the basis of regulated tariffs and conditions set by the NCA. TenneT
has been appointed as the operator of the national high-voltage grid (i.e., all grids with a
voltage level of 110kV or more) and GTS (Gas Transport Services) has been appointed as
the operator of the national high-pressure gas network. There are fewer than 10 operators
of regional distribution networks. TenneT and GTS are currently wholly owned by the
Dutch state and the distribution companies are owned by local authorities (provinces and
municipalities). Under strict conditions, an exemption to appoint a network operator for
closed distribution systems may be obtained from the NCA.
Under the Acts, network operators have exclusive powers to construct, maintain,
renew and operate their networks, to provide for connections to their networks and to
provide metering services to small-scale users. The latter is the corollary of the obligation
to roll out ‘smart’ meters to all small-scale users. Small-scale users are defined in the Acts
as users with a connection with a capacity of no more than 3 × 80 amperes (Electricity
Act) or 40 cubic metres of gas per hour (Gas Act). Closed distribution systems, electricity
connections with a capacity of more than 10MVA and gas connections with a capacity
of more than 40 cubic metres gas per hour (with the exception of the connecting
point to the network) may be constructed by third parties. The exclusive activities of
the network operators are strictly regulated. The Acts contain various provisions that
ensure the financial and operational independence of the network operators. The Acts
also strictly regulate which activities may or may not be performed by affiliate companies
of the network operator. Pursuant to the Gas Act, an operator must also be appointed
for liquefied natural gas (‘LNG’) and gas storage facilities. These operators enjoy much
lighter regulation.
The supply of electricity and gas in the Netherlands has been fully liberalised
since 2004. Customers are free to chose their supplier and to negotiate the prices for
the supply of electricity and gas. For the supply of electricity and gas to small-scale users
a supply licence from the NCA is, however, required. A licensed supplier is obliged to
supply small-scale users under reasonable conditions. The NCA monitors the small-scale
user supply tariffs and may set a maximum supply tariff when it deems the tariffs too
high, although this has never happened. For the physical trading in electricity and gas
certain requirements of TenneT and GTS must be met.
The Acts do not impose licence requirements on the production of electricity
or gas. The customary permits from local or national governmental authorities under
the applicable planning and environmental legislation are required. For large-scale
investments a coordination mechanism may apply that shortens the overall length of
the procedures. For the exploration and production of oil and gas in the Netherlands
(including the Dutch part of the continental shelf ) a licence from the Minister is required
pursuant to the Mining Act. Such a licence will only be granted if the Minister deems
production economically feasible.
For the trade of electricity or gas no licences from the Minister or the NCA are
required. Traders must, however, register with and obtain certain licences from TenneT
or GTS.
192
Netherlands
iii
Ownership and market access restrictions
The Acts stipulate that a network or shares in a network operator can only be held by
the state or local authorities (‘the privatisation prohibition’). As previously mentioned,
TenneT and GTS are currently wholly owned by the Dutch state. The Minister has,
however, announced an amendment to the Acts that would allow for a partial privatisation
of TenneT and GTS. The operators of the regional networks must have the economic
ownership of the networks operated by them (and, following an amendment to the
Acts, ownership of the national networks must be with TenneT and GTS or a group
company). In addition, the Acts prescribe that Dutch network operators cannot belong
to a group that produces, supplies or trades energy (‘the group prohibition’; see also
Section III.i, infra).
Except for this group prohibition, the ownership of production, sale and supply
companies is currently not regulated or restricted. The pending implementation of
the European 3rd Energy Package will, however, introduce certain ‘level playing field’
provisions in the Acts. These provisions will entail an obligation to report to the Minister
any change of control over an electricity plant with a nominal capacity of more than
250MW or over an LNG plant. The Minister may then attach conditions to such change
of control if this is deemed necessary for reasons of public safety or security of supply.
Pursuant to the Mining Act, all minerals and gas in or under the Dutch soil
(including the Dutch part of the Continental Shelf ) are owned by the Dutch state.
Ownership is transferred to the licensee at the moment of production. The Mining Act
prescribes state participation of 40 per cent via its 100 per cent state-owned participation
vehicle EBN (Energie Beheer Nederland). Licensees must enter into a cooperation
agreement with EBN stipulating the rights, obligations and division of costs in accordance
with the respective interests of the parties.
iv
Transfers of control and assignments
Except for the aforementioned ‘privatisation prohibition’, ‘group prohibition’ and ‘level
playing field’ provisions, changes of control over energy companies are not restricted
under the Acts. The NCA has the authority to approve or prohibit mergers or other
changes of control over businesses in the Netherlands under the merger control rules in
the Competition Act (which mirror European merger control rules).
III
TRANSMISSION/TRANSPORTATION and DISTRIBUTION
SERVICES
i
Vertical integration and unbundling
The Acts provide for ownership unbundling of network activities. Network operators
may not be part of a group, national or foreign, that produces, supplies or trades
energy. This ‘group prohibition’ is more restrictive than the unbundling requirements
for transmission in the European directives and, moreover, applies to transmission as
well as distribution. The group prohibition has been challenged before the courts. The
largest previously vertically integrated distribution and supply companies, Essent and
Nuon, have not awaited the outcome of this procedure and have sold their production
and supply business to RWE and Vattenfall respectively. The Dutch Supreme Court is
193
Netherlands
awaiting the outcome of its recent request for a preliminary ruling to the Court of Justice
of the European Union on the compatibility of the group prohibition with European
law, in particular the principle of the free movement of capital.
The Acts also contain restrictions on network operators that are unbundled from
production and supply companies. These restrictions seek to ensure the organisational
and financial independence of the network operator and to prevent cross-subsidisation
and the dissemination of strategic information. Moreover, the Acts stipulate that the
network operators may only perform their statutory tasks, minimise the outsourcing of
activities by the network operator and restrict the activities that may be performed by the
group to which the network operator belongs to infrastructural activities.
ii
Transmission/transportation and distribution access
The Acts provide for a system of regulated third-party access to the transmission and
distribution networks. The network operator must, on request, provide third parties with
a connection to its network (with an exception for large-scale gas users), and, except in
cases of lack of capacity, carry out the transport of electricity or gas against tariffs and
conditions set by the NCA. Oil and gas production pipelines are not subject to thirdparty access provisions and for LNG and gas storage facilities a lighter regime applies.
Amendments to the Acts that will provide for preferential transportation for
renewable electricity in case of congestion, are expected to enter into force soon.
iii
Rates and tariffs
Pursuant to the Acts, the maximum tariffs for the transmission and distribution of
electricity and gas are set by the NCA on the basis of CPI-X pricing. The tariffs are set
annually by the NCA for each individual network operator, based on the previous year’s
tariffs and taking into account changes in the consumer price index and an efficiency
discount (and in the case of the network operators of regional grids, by a factor reflecting
the quality of the grid in terms of outages). The efficiency factor is based on benchmarking
and is set for a period of between three and five years for electricity network operators,
gas network operators as well as the electricity and gas transmission system operators
TenneT and GTS. The regulated rates for metering services to small-scale users are set
separately. The applicable rates for network users are largely determined by the capacity
of their connection.
iv
Security and technology restrictions
The Acts currently do not include provisions aimed at protecting homeland security or
the safety of critical infrastructure or systems other than a general obligation for network
operators to operate their networks in a safe and reliable manner. An amendment to
the Acts has been proposed that would give network operators, gas storage companies
and LNG companies a more specific obligation to protect their infrastructure against
terrorism and cyber crime. The details of this obligation will be laid down in secondary
legislation. The Minister will be given the power to give binding instructions in this area.
194
Netherlands
IV
ENERGY MARKETS
i
Development of energy markets
The trade and sale of power in the Netherlands takes place on three markets: the overthe-counter market; the APX-ENDEX physical and futures exchange; and the imbalance
market operated by TenneT. Currently, there are seven electricity interconnectors on
the Dutch border: one with Norway (NorNed), one with the UK (BritNed), three with
Germany and two with Belgium. In addition to the roles of producer, trader or supplier,
a participant on the Dutch electricity market can also be a ‘programme responsible
party’. In that capacity a party must inform TenneT, who balances the system, on a
daily basis of all transactions with other parties which they have planned for the next
day. The difference between the programme and the actual amount of electricity that
has been consumed or supplied is the imbalance for which an imbalance tariff must be
paid to TenneT. Under the Electricity Act, all parties connected to the grid, excluding
small-scale users whose programme responsibility is by law assumed by their suppliers,
bear their own programme responsibility unless they have assigned this responsibility to
a programme responsible party (normally also their supplier).
With respect to gas, GTS offers the title transfer facility (‘TTF’), a virtual trading
place where market parties can transfer gas to another party. GTS registers the title
transfers of gas via the TTF by means of an electronic message that lists the volumes
of gas transferred, the period, and the purchasing and selling parties involved. Delivery
for trades on the physical and futures exchange APX-ENDEX also take place on the
TTF. The high-pressure gas transmission system is connected to Belgium, Germany and
England (BBL). Programme responsible parties (formally knows as ‘shippers’) arrange
for the gas to be transported within the national gas transmission system by contracting
transport capacity with GTS on the basis of the GTS Transmission Service Conditions.
GTS operates the market-based imbalance system.
ii
Energy market rules and regulation
There is little red tape involved when it comes to operating on the electricity and gas markets
in the Netherlands. For both electricity and gas, suppliers who supply to small-scale users
must obtain a licence from the NCA and trading on the APX-ENDEX exchange requires
membership thereof. Moreover, programme responsible parties for electricity and gas
must meet the relevant requirements of TenneT and GTS respectively and in order to
participate on the TTF, a party must apply with GTS for a TTF subscription. Following
the entry into force of the Regulation on Energy Market Integrity and Transparency
(REMIT), parties who are active on the wholesale markets for electricity and gas are also
subject to certain information obligations aimed at preventing insider trading.
iii
Contracts for sale of energy
Although the retail markets have been liberalised, a licence is required for the supply of
energy to small-scale users. Licensed suppliers are obliged to supply electricity and gas
in a reliable manner and on the basis of reasonable terms and conditions. In practice
all licensed suppliers in the Netherlands use the same general terms and conditions,
which were drafted in cooperation with the Dutch Consumer Union and the NCA.
195
Netherlands
In addition, a model contract for the supply of electricity and gas to small-scale users
will be introduced as of 1 July 2012, which all licensed suppliers will be required to
offer in addition to any other type of contract. As of 1 April 2013 the provisions in the
Acts dealing with the ‘supplier model’ for small-scale users will enter into force. Under
this model the licensed supplier will be the primary point of contact for small-scale
users, invoicing for both distribution and supply (the network operator will invoice the
supplier).
Other than for small-scale users, the Acts do not regulate the sale of electricity or
gas. Depending on the type of contract, the Markets in Financial Instruments Directive
(MiFID) as implemented in the Dutch Act on Financial Supervision (‘the Wft’) may be
relevant. Certain types of contracts that qualify as derivatives may qualify as ‘financial
instruments’ under the Wft. If a party executes or receives and passes on orders for such
financial instruments on a regular basis, it could be construed as an ‘investment firm’ that
performs ‘investment services’ as meant in the Wft, for which activity a licence from the
Dutch Financial Markets Authority is required unless one of the Wft exemptions applies.
iv
Market developments
With respect to electricity, the Netherlands has moved from an electricity importing
country to an electricity exporter. There are plans to take a total of over 14GW of
new production into operation before 2018, an increase of approximately 50 per cent
compared to the current Dutch production capacity. In the development of the northwest European electricity market, the attractiveness of the Netherlands as a location is
increasingly emerging as a prominent factor in producers’ investment plans. Plans for a
second nuclear power plant in the Netherlands have, however, been put on hold and are
unlikely to be revived anytime soon.
With respect to gas, the Dutch policy has been to build on the Netherlands’
gas position to become a gas hub (‘gas roundabout’) for north-west Europe, inter alia
by facilitating onshore gas storage and improving cross-border transport capacity. In
addition, in 2011 the first LNG terminal in the Netherlands (Gate) came into operation.
Most gas users in the Netherlands, including all households, use low calorific gas. This
can be gas from the Groningen field or converted high calorific gas from the small
fields. The declining production from the small fields means that increasing quantities
of foreign gas are needed for the supply of low calorific gas. This will mean that the
composition of low calorific gas will change. The Minister has reached an agreement
with GTS that allows the composition of low calorific gas to remain unchanged for at
least the next 10 years to that end-users do not have to replace installations. In addition,
there are approximately 60 large-scale users that are connected to a separate network of
GTS for high calorific gas. They do have to take measures to adapt to the changing gas
composition for high calorific gas.
V
RENEWABLE ENERGY AND CONSERVATION
i
Development of renewable energy
Current government policy is based on collaboration and harmonisation of renewable
energy incentives at a European level. For the short term the Dutch government is
196
Netherlands
committed to working towards achieving the European target of a 14 per cent share
of renewable energy by 2020. For the long term, the government’s approach is geared
towards the promotion of innovation in order to make renewable energy production
competitive. The government intends to achieve these aims by various means.
One is the so-called SDE+ scheme, whereby subsidies are granted to sustainable
energy projects. The SDE+ will be financed by a surcharge on the energy bills of consumers
and companies. The relevant legislation for the surcharge, which will be imposed as of
2013, is currently being drafted. The main options for achieving the renewable energy
target are onshore and offshore wind energy. Discussions are taking place regarding a more
coordinated planning approach to realise the ambition for 6,000MW onshore windpowered generation capacity and various projects for offshore wind energy. Discussions
are also taking place on mandatory co-firing of biomass in coal-fired plants as well as on
obligation on suppliers to supply a minimum percentage of renewable energy. Finally,
a recent amendment provides for a possibility to deviate from the Acts for sustainable
local initiatives.
ii
Energy efficiency and conservation
The 2006 European Energy Efficiency Directive has been implemented in the Netherlands
in the form of the Energy Efficiency Act as well as in the Acts. This implementation
covers a large number of aspects relating to energy efficiency, such as energy-saving
requirements for appliances and the rollout of smart energy meters. In addition, an
action plan for energy savings has been introduced to increase awareness for the potential
of energy savings in buildings.
The current government has also introduced the ‘Green Deal’ between the
government and society as a whole. The Green Deal aims to resolve any difficulties with
regard to energy saving and the generation of local sustainable energy and to show that
‘green’ and ‘growth’ can go hand in hand without large-scale subsidies.
When it comes to reducing carbon emissions there are two main projects. The first
is the European Energy Trading System in which the energy sector and major industrial
companies are the main participants. The emission rights are partly auctioned by the
government and partly allocated on the basis of European benchmarks. The second
project is carbon capture and storage (‘CCS’). A joint venture (Road) between E.On and
GDF SUEZ is currently developing a large-scale CCS demonstration project, whereby
CO2 of a new coal-fired power plant is stored underneath the North Sea.
iii
Technological developments
The Netherlands has specific strengths in the area of sustainable energy technology,
albeit that the solar sector has suffered recently. To further strengthen the innovative
capacity and competitiveness of the Dutch energy sector, energy has been designated
by the government as an economic ‘top sector’ that should benefit from a modern form
of industrial policy, including a joint innovation agenda for business, research institutes
and government and active energy diplomacy. The government has also set aside funds
for the promotion of trial projects for the development of smart grids. To enhance
infrastructure investments, a new procedure has been introduced in the Acts that offers
197
Netherlands
network operators more certainty in advance on whether and how certain investments
can be recouped in the tariffs.
VI
THE YEAR IN REVIEW
The year 2011/2012 has been a transition year. The government that presided over the
Netherlands in this period has recently fallen and new elections are due in September.
The current caretaker government has emphasised that the transition to a cleaner supply
of energy must be beneficial to the Dutch economy.
The Minister has recently initiated a large-scale legislative review in order
to streamline and modernise the Acts. Part thereof will also be allowing for a partial
privatisation of TenneT and GTS. The ownership unbundling saga in the Dutch energy
sector, which has already demanded so much management time, is set to continue with
the recent request of the Dutch Supreme Court for a preliminary ruling to the Court
of Justice of the European Union on the compatibility of the group prohibition with
European law.
VII
CONCLUSIONS and OUTLOOK
Energy policy in the Netherlands has not always been very consistent, either in time
(in particular with respect to renewables) or in comparison with European policy (in
particular with respect to ownership unbundling). By 2025 it is expected that the
Netherlands will have become a net importer of gas. It remains to be seen to what
extent the next government is able to accelerate its ambitions with respect to making the
Netherlands a gas hub and achieving a low carbon-emission economy by 2050.
In the near future there will be wholesale revisions to the Acts, the entry into
force of the Heat Act, including secondary regulations, and – most likely – partial
privatisations of TenneT and GTS.
198
Appendix 1
About the authors
Jan Erik Janssen
Stek
Jan Erik Janssen is a competition and regulatory expert. He represents companies in
administrative and civil litigation and in front of competition authorities, regulators
and policy makers. He has been consistently recommended as one of the leading energy
and competition lawyers in the Netherlands. Mr Janssen is a founding editor of the
Netherlands Journal for Energy Law. In 2008 his peers voted him the best energy lawyer
in the Netherlands.
Martha Brinkman
Stek
Martha Brinkman is a senior competition and regulatory attorney. She litigates and
advises on European and Dutch competition law issues, public procurement law and
sector-specific regulation. Ms Brinkman is co-author of the section on energy regulatory
developments in the Netherlands Journal for Energy Law. The Legal 500, 2012 edition,
recommends her as a leading energy lawyer.
Stek
Herengracht 551
1017 BW Amsterdam
Netherlands
Tel: +31 20 530 52 00
Fax: +31 20 530 52 99
[email protected]
[email protected]
www.steklaw.com
357