Dutch households pay EUR 12 more for energy transmission in 2018

In 2018, the tariffs for the transmission of energy will increase on average by EUR 12 per Dutch household. This was revealed by the tariff decisions for the distribution system operators (DSOs) and Dutch transmission system operator (TSO) TenneT, which were released by the Netherlands Authority for Consumers and Markets (ACM). Due to the tariff increase for the transmission costs, the average total energy bill will increase by 1 percent. Transport costs take up about a fifth of the energy bills of households. 

Municipal tax is main cause of the increase in tariffs of DSOs

The increase of tariffs of DSOs is largely caused by a specific type of municipal tax. Municipalities levy this tax as a fee for the use of public land for, for example, cables and pipelines. DSOs include this tax in their tariffs.

Investments are cause of the increase of TenneT’s tariffs

One of the reasons for the increase of TenneT’s tariffs is the large investments that TenneT has to make for the expansion of the national grid, for example because of the energy transition. The grids need to be strengthened in order to be able to transport large quantities of electricity from the offshore wind farms, and to integrate the energy markets in Europe further. Because of that and for other reasons, the revenues that TenneT is allowed to earn in 2018 increase by EUR 15 million compared with 2017. In the next few years, too, many investments are needed, the costs of which TenneT is allowed to include in its tariffs. As a result, ACM expects that the tariffs will increase further.

Capacity auction revenues are included in the tariffs

The increase in tariffs is tempered by the inclusion of the so-called congestion revenues in the tariffs. These are revenues from auctions of capacity on cross-border connections which TenneT does not use to finance investments with. For 2018, this concerns an amount of EUR 145 million. In 2017, it was still EUR 174 million. This difference also partially explains the tariff increase compared with 2017.

Efficient system operation

ACM supports the objective of realizing an affordable, secure, and sustainable supply of energy. It regulates system operators, which enjoy a monopoly on the transmission of electricity. ACM’s regulation ensures that tariffs are not higher than necessary, and it helps create a healthy investment climate.