ACM launches preparations for introduction of feed-in tariff for large energy producers
The Netherlands Authority for Consumers and Markets (ACM) finds it important that large electricity producers that feed power into the grid pay their fair share in the rising costs for grid expansions and upgrades. That is why ACM has started preparations for the introduction of a feed-in tariff. Grid costs are currently paid by Dutch users.
Manon Leijten, Member of the Board of ACM, explains: “The costs for upgrading and expanding the grid will go up considerably in the upcoming years. It is important that these costs are distributed fairly among all users of the grid, and that feeders and foreign buyers of electricity also share in the costs of the Dutch infrastructure.”
System operators need to make major investments in their grids in order to realize the energy transition. ACM has projected that, over the next 25 years, the costs for all users of the grid will go up from approximately 7 billion euros to 18 to 25 billion euros. Due to this enormous increase, a fair distribution of these costs has become ever more important. That is why ACM examines how feeders such as power plants, solar parks, storage facilities, and wind parks are able to help mitigate the rising grid costs through a feed-in tariff. A feed-in tariff also ensures that buyers in other countries help pay for the transport of electricity over the Dutch grid.
In connection with the National Action Program for Grid Congestion (LAN), ACM in 2023 launched a study into the introduction of a feed-in tariff for electricity. As part of that study, ACM sat down with both Dutch stakeholders and regulators in neighboring countries. On the basis of this study, ACM launched an exploratory study into the options for a feed-in tariff for feeders in the Netherlands.
ACM is considering several different tariff structures. ACM has asked consultancy CE Delft to carry out a study into these. In its study, CE Delft looked at the effects of introducing different feed-in tariffs on the future energy mix and competitive positions of feeders, the burden on the grid, and the energy bills of buyers. In addition, CE Delft benchmarked the tariff structures against several social criteria, such as cost reflectivity (tariffs match as much as possible the costs that a grid user causes), system efficiency (or the promotion thereof), transparency, and non-discrimination. According to CE Delft, the feed-in tariff represents an improvement on the aspects of cost reflectivity and, to a lesser extent, burden on the grid.
ACM has discussed the study results with market participants. System operators have indicated that they do expect that the introduction of a feed-in tariff will result in a more efficient utilization of existing grids. Energy producers and suppliers have indicated that they have concerns about the business models of producers of sustainable energy. ACM will take into consideration the market participants’ comments when working out the phased introduction of a feed-in tariff. ACM aims to publish a draft decision regarding a feed-in tariff in 2025.