ACM issues recommendations regarding conditions for network companies on the Dutch heat market
The Netherlands Authority for Consumers and Markets (ACM) has issued additional recommendations regarding the conditions under which network companies could play a bigger role on the heat market than they do now. ACM has drawn up these recommendations at the request of the Dutch Ministry of Economic Affairs and Climate Policy (EZK), as a follow-up to its previous recommendations to EZK in March 2020 regarding the new Heat Act.
The installation and commercial exploitation of a heat network carries costs and risks. Therefore, additional safeguards are needed to ensure the independence of network management as well as the security of supply of electricity and natural gas, to minimize any additional financial risks for network management, and to prevent cross-subsidization to and preferential treatment for other parts of the network company.
One safeguard, for example, is that the executives of the system operator should be able to operate fully independently. System operators should have their own staff and funding, and should have limited options to grant, for example, rights of mortgage on the debts of sister companies. In addition, system operators must act in a transparent manner, and must act in a non-discriminatory manner vis-à-vis their suppliers and buyers.
Furthermore, the production of heat often goes hand in hand with production, trade, and supply of electricity and/or natural gas. In the Dutch Electricity Act and in the Dutch Gas Act, it has been stipulated that network companies cannot perform any production activities. It may thus be necessary to amend those rules in order to give network companies a role in the production of heat.