TenneT’s revenues to increase by EUR 40 million in 2017

In 2017, Dutch transmission system operator TenneT is allowed a maximum revenue of EUR 508 million for its tasks that include the transmission of electricity over the national grid. Compared with 2016, this is an increase of EUR 40 million. This has been announced today by the Netherlands Authority for Consumers and Markets (ACM). TenneT’s revenues are paid by large-scale users and distribution system operators (DSOs), which, in turn, pass their costs on to consumers and businesses.

One of the reasons for this increase is the large investments that TenneT has to make with regard to the expansion of the national grid. However, the increase in revenues is still limited, because TenneT uses congestion revenues from auctions of cross-border transmission capacity to lower the tariffs. For 2017, TenneT used EUR 174 million of congestion revenues.

European market integration

Expanding the national grid is necessary in order to solve bottlenecks. This concerns national grid connections such as the Randstad 380 kV Ring system, located in the densely-populated western part of the Netherlands, and cross-border connections such as the Doetinchem-Wesel connection between the Netherlands and Germany, and the COBRA-cable between the Netherlands and Denmark. The investments into these cross-border connections result in a more efficient use of the power grids in Europe. European market integration will result in more security of supply and fewer price differences between European countries.

Calculating TenneT’s revenues

In August 2016, ACM issued a method decision for TenneT’s transmission tasks and another method decision for TenneT’s system tasks. These methods decisions contain the rules that ACM has set for calculating TenneT’s maximum revenues. On the basis of these maximum revenues, TenneT in November submitted a proposal to ACM for the tariffs they intend to charge in 2017. ACM has assessed this proposal, and has subsequently determined the maximum level of the tariffs.

Efficient system operation

ACM supports the objective of realizing an affordable, secure, and sustainable supply of energy. It regulates system operators such as TenneT, which enjoys a monopoly position in the transmission of electricity. ACM’s regulatory regime ensures that tariffs are not higher than necessary, and it helps create a healthy investment climate.