NMa: 10 years of tariff regulation has generated at least EUR 7 billion
A study commissioned by the Netherlands Competition Authority (NMa) has revealed that, thanks to tariff regulation, energy consumers (individuals and businesses) from 2000 until 2011 paid more than EUR 7 billion less than they would have without regulation. At the same time, grid security has been maintained at a high level. The network operators are in good financial shape, and have enough room for investments, despite declining profits. The Netherlands is the international leader in terms of minutes of outages per year, which is 21 minutes on average.
The study looked at the regional network operators, as well as at Dutch transmission system operator TenneT. Its findings have been based on existing sources and analyses as much as possible. The figures do not include the realized effects of GTS’ regulation.
The researchers also looked at developments in the energy industry that could affect tariffs in the next three to seven years. They named distributed generation as the most important issue. Energy consumers are more and more often also energy producers with their solar panels, wind turbines or cogeneration systems. This two-way power flow is expected to expand, thereby affecting the grids, which thus need to be modified in order to accommodate for this change. A second key development is the rise of smart grids with smart meters. The information that smart meters produce enable consumers to organize their energy consumption more efficiently, for example, by using certain appliances more often during off-peak hours. Using these smart meters, network operators are able to monitor grid quality better, and to match supply and demand better. The third development is European integration. The European Commission recently noted that many European countries are still lagging behind in opening up their energy markets. There is still a long way to go before the goal of creating a single European market in 2014 is realized. In a single European market, consumers can, for example, select a provider from another country, and the European grid will no longer have any physical limitations.
Chairman of the Board of the NMa Chris Fonteijn reacts: ‘As the NMa, and soon as the Netherlands Authority for Consumers and Markets, we believe it is important that network operators have enough freedom in the transition towards a more sustainable energy production. The studies show that our tariff regulation does not stand in the way of that objective. We make sure that the transition takes place in such a way that the entire energy market continues to function effectively and efficiently. That is in the interests of consumers and businesses alike.’