NMa advice: improve regulation on source of electricity

The practicability of two Government Regulations (Minsteriële regelingen) on the source of (green) electricity, involving so-called electricity labels, is falling short. Also, administrative burdens imposed on the energy companies concerned may be lowered. These are the most important conclusions set out in an advisory report to the Minister of Economic Affairs as drafted by the Netherlands Competition Authority (NMa).

In 2006 the level of adherence to regulation among energy companies ranged from sufficient to good, resulting in a reliable, comprehensible and uniform electricity label for each supplier. In order to improve the practicability of regulation, the NMa advises to postpone the deadline for customer dispatch of the labels, as the date currently set (1 April) is unfeasible for many parties. Furthermore, improvement would entail changing the mandatory monthly entry of guarantees of origin into a quarterly entry. Mandatory entry procedures ensure that green electricity is in fact green. The advisory report also makes suggestions for the use of consumer-friendly language. By adjusting labels in compliance with consumer wishes, for instance through the use of simplified terminology, the added value of electricity labels may be increased.

The Office of Energy Regulation (DTe), which is part of the NMa and regulates energy markets, annually assesses the reliability, comprehensibility and uniformity of electricity labels. It is compulsory for energy companies to provide their clients with an electricity label once a year. This is laid down in the Government Regulations on Suppliers and Guarantees of origin. The electricity label outlines the origin of electricity supplies, allowing consumers to take into account environmental quality, for instance when switching to another supplier. The Government Regulation on Guarantees of origin stipulates that suppliers shall make an entry for guarantees of origin in their accounts with a view to confirming customer supplies of sustainable electricity.

The report 'Enforcing compliance with regulation on electricity labels and guarantees of origin in 2006' is available on www.acm.nl (Dutch version only). The response of the Minister of Economic Affairs may be found on ww.ez.nl under the subject heading of 'sustainable energy'.