STROOM Bill introduces new duties for Dutch system operators

STROOM, issue 3

Introduction

This article sets out the main proposed amendments in relation to the duties of system operators under the Dutch STROOM Bill and is the third part in a series of six [see part one and part two]. STROOM enacts new provisions for the production, transportation, trade and supply of electricity and gas and was submitted to the Dutch House of Representatives on 4 May 2015. The STROOM Bill aims to create a new, clear and simple framework for the Dutch electricity and gas market, based on European law.

Investment plans

One of STROOM’s benefits is that it proposes a clear framework for the duties of system operators. In doing so, it both modifies some existing duties and introduces a number of new duties.

One of these duties is that all system operators must adopt an investment plan to ensure that required investments are timely. This is intended to ease the burden of the energy transition, where system operators are facing the challenge of replacing and expanding the current grid to accommodate the growing supply of renewable energy and the growing share of local energy production. These investment plans will replace the current quality and capacity documents and expansion investment decisions.

In drafting their investment plans, system operators should include the necessary expansion and replacement investments and are required to consult interested parties and incorporate any responses they may receive. The Netherlands Authority for Consumers & Markets (ACM) will audit all investment plans to determine whether the system operator, in all reasonableness, could have adopted the investment plan. Investment plans for transmission systems must also be submitted to the Minister of Economic Affairs. The Minister will look at whether the transmission system operator has sufficiently taken into account the developments in the energy market. It is expected that further details may be laid down in subordinate legislation. Investment costs anticipated in an investment plan are considered necessary and may be settled in the distribution and transmission tariffs.

In relation to onshore wind, STROOM specifically provides that investment plans must include areas designated for onshore wind, pursuant to the relevant structure vision. The reason behind this is to make sure that system operators timely make the necessary preparations and discuss the grid requirements with the relevant stakeholders, such as wind park developers and the competent authorities.

In relation to offshore wind, the Minister of Economic Affairs will do the groundwork beforehand by adopting "scenario" to be worked out in detail by the Dutch TSO TenneT in an offshore wind investment plan.

Legal basis offshore grid

STROOM provides the legal basis for development of a Dutch offshore grid by Dutch TSO TenneT for the connection of offshore wind park projects. This grid is necessary to accommodate the envisaged increase of offshore wind capacity to 4,450 MW by 2023, which will require a total extra capacity of 3,450 MW to be constructed over the coming years.

The scenario to be adopted by the Minister of Economic Affairs shall deal with this target and must include details such as the envisaged capacity, the subsidy that will be made available for the realisation of the offshore wind parks, the life span of the wind parks and the technical concept of the connections.

STROOM also addresses TenneT’s liability in the case of a delay in the construction of the offshore grid in deviation of the scenario or disruptions in the transmission of electricity through the offshore grid. The liability provisions will be detailed in subordinate legislation.

Information sharing and underground cabling

STROOM also introduces the obligation for system operators to make public all information useful for the energy transition. This includes the production installation register (PIR) for local energy generation, the availability of user data at postcode level and detailed information on the installation of smart meters that can be read remotely by system operators and will replace the current energy meters in the coming years.
Finally, the Bill introduces underground cable installation in areas where high voltage cables are situated near houses. In total, approximately 135 km of high-voltage cables in the Netherlands are eligible for underground cabling.

Municipalities are responsible for instigating underground cable installation and they will bear 25% of the costs. Under STROOM, Dutch TSO TenneT will settle the remainder of the costs in the transmission tariffs.

If you would like more information on system operator’s duties under STROOM, please contact the authors.