Tariffs of GTS for gas transmission decrease by EUR 35 million

The tariffs of the Dutch transmission system operator for natural gas Gasunie Transport Services (GTS) will decrease by approximately 3 percent, which has been decided by the Netherlands Authority for Consumers and Markets (ACM). GTS’ revenues will subsequently decrease by EUR 35 million. ACM sets the tariffs because GTS does not have any competitors, and because GTS is required to charge its users reasonable tariffs.

Injection of nitrogen leads to higher tariffs

GTS is compensated for the investments made in the natural-gas network through the tariffs. For example, investments were made in a new pipeline in the southern province of Zeeland, and in the expansion of a blending station in the western province of North-Holland, which is used for nitrogen injection. The investment in the blending station is needed for making foreign natural gas suitable for Dutch households. The natural gas that Dutch consumers use for their central heating and gas stoves is low calorific, like the natural gas that comes from the Groningen field. Natural gas from abroad is high calorific. By adding nitrogen, high-calorific gas is made suitable for domestic use in the Netherlands. Investments in blending stations for nitrogen injection cost money, and GTS is compensated for these costs through the tariffs that consumers and businesses pay.

Operating more efficiently brings down the tariffs

Henk Don, Member of the Board of ACM, explains: “The tariffs for natural gas go down, despite the compensation of all of GTS’ capital costs. In total, GTS is allowed to earn EUR 35 million less in 2016. That is because an efficiency-stimulating tariff cut will be implemented. ACM believes that GTS is able to operate more efficiently.”

Effects on consumers

Consumers and businesses are not directly charged the GTS’ transmission costs. However, ACM does expect the effects of the new tariffs to be passed on to them through the gas distributors.