ACM watches over the allocation of transmission capacity on the gas network

In order to guarantee an efficient allocation of transmission capacity on the gas network, capacity that has been booked for transmission purposes but that is not used can now be withdrawn. Henk Don, Member of the Board of the Netherlands Authority for Consumers and Markets (ACM), explains: “European rules apply to long-term contracts, which are called ‘Use it, or lose it.’ Together with our fellow regulators in Belgium and the United Kingdom, ACM has fleshed out these rules further. This joint interpretation ensures that we apply the rules uniformly on both sides of the border. Businesses can anticipate these rules by offering their unused transmission capacity to the market themselves.”

Belgium

Last year, transmission capacity with Belgium was very limited during a certain period, as a result of which several gas providers had insufficient access to the Belgian market for natural gas. Nevertheless, the average utilization rate of transmission capacity in that period (April – October 2014) was just 51 percent. The rest had been booked, but remained unused. After consulting with ACM, Dutch transmission system operator for natural gas GTS made additional capacity available by ‘overbooking’. From now on, ACM is able to step in in such situations under the ‘Use it or lose it’ rules.

Secure and affordable energy

ACM watches over security of supply of natural gas at the lowest possible costs. This can only succeed if there is sufficient capacity in order to be able to transport all the required natural gas to customers. The trade in natural gas is of tremendous importance to the Dutch economy. Last year, roughly EUR 5 billion worth of natural gas was transported to Belgium and the United Kingdom. The ‘Use it or lose it’ rules are supposed to prevent scarcity from occurring in times of high demand for natural gas from these countries. Scarcity leads to higher gas prices. Furthermore, the security of supply could come under pressure. Mr. Don adds: “Sufficiently available border capacity is necessary to come to a single European market in which energy can flow easily from one country to another. That leads to secure and affordable energy.”