ACM releases method decision for offshore-grid operator TenneT
The Netherlands Authority for Consumers and Markets (ACM) has set rules for determining the maximum revenues of the operator of the future offshore grid for the period of 2017 through 2021. This will be transmission system operator TenneT. On the basis of this set of rules, also called the ‘method decision for the offshore grid’, ACM will each year determine the reasonable revenues of the grid operator: in late-2016 for 2017, in late-2017 for 2018, and so on. The grid operator should be able to recoup its investments in the construction of the offshore grid, insofar such investments are efficient. As soon as the offshore grid becomes operational, ACM will assess the efficiency of the costs incurred by the grid operator.
ACM was able to finalize the method decision two weeks after the Dutch Minister of Economic Affairs had designated TenneT as the operator of the offshore grid. TenneT thus received as soon as possible the certainty it needed for continuing the construction of the grid. The offshore grid will connect the new offshore wind farms in the North Sea to the onshore grid. A timely completion of the grid is important for achieving the goals set out in the Dutch Energy Agreement.
Method decision for the onshore grid is largely applicable to the offshore grid
The method decision for TenneT’s onshore tasks can largely be applied to its offshore tasks as well. ACM has chosen a regulatory period of five years for the offshore grid as well. ACM has also chosen the same reasonable return as well as a compensation for the operating costs without a financial settlement afterwards. In the consultation of the decision, TenneT did suggest to have the operating costs settled afterwards. However, ACM rejected this suggestion, as it would remove the incentive for TenneT to keep the costs efficient.
Sustainable energy supply that is also affordable and secure
The current Dutch administration aims to have an additional 3,500 MW of wind capacity built offshore. This will help realize the government’s plans to have 16 percent of its energy mix come from renewable sources by 2023. The transition towards a sustainable energy supply should also be affordable and secure. ACM regulates the operator of the offshore grid because the operator enjoys a monopoly position.