When setting the 2023 tariffs, ACM takes into account the high costs connected to grid losses due to the higher energy prices

Due to the high energy prices, distribution system operators (DSOs) as well as TenneT, the transmission system operator (TSO) for electricity, are forced to incur additional costs when purchasing electricity to cover grid losses. The Netherlands Authority for Consumers and Markets (ACM) wishes to prevent system operators from subsequently having less room for investment in projects that are important to the energy transition. That is why, when setting the tariffs for 2023, ACM wishes to give the DSOs an advance for the high costs connected to grid losses. After consulting with TenneT, ACM has come to the conclusion that, with an eye to a stable tariff development next year, an advance for TenneT is not a desirable solution. However, ACM will look for a more suitable solution.

Energy losses occur when transmitting electricity and when converting, for example, high-voltage electricity to low-voltage electricity. System operators are responsible for the purchase of electricity that is lost during transmission, which are called grid losses. Costs that are incurred for these grid losses are passed on to end-users in the transmission tariffs. The unexpectedly sharp increase in grid-loss costs as a result of the high energy prices in 2022 is reason for ACM to make a subsequent calculation of these 2022 costs for the DSOs for electricity. System operators are usually compensated for costs two years after a subsequent calculation. With the advance on the subsequent calculation, ACM settles part of the costs that system operators incur in 2022 already in the 2023 tariffs.

Investments in the energy transition

Over the next few years, system operators need to make major investments for upgrading the grid. Many industries are becoming more sustainable, which means more and more electricity is consumed, and in residential areas too, more and more people own solar panels, heat pumps, and electric cars.  ACM finds it important that system operators have sufficient financial resources to make the investments that are needed for the energy transition.

That is why, when setting the 2023 tariffs for the DSOs for electricity, ACM will already take into account the high costs connected to grid losses. With regard to the DSOs for natural gas, ACM does not see any reason yet to announce either a subsequent calculation or an advance thereon connected to grid losses. That is because, with regard to natural gas, grid losses make up a smaller part of the total costs of DSOs. ACM will further examine this issue in the run-up to the 2024 tariffs.

Solution for TenneT

With regard to the additional costs that TenneT incurs because of the high energy prices, ACM wishes to find a suitable solution that helps towards a stable tariff development. That is why ACM will examine how, from 2024 onwards, it can incorporate the costs that TenneT incurs in connection with the purchase of electricity and power (including the grid losses) into the tariffs sooner.

In October 2022, ACM will publish the tariff proposals of the DSOs and TenneT. ACM will announce the 2023 tariffs by late November.