Average returns of heat suppliers decreased in 2019 and 2020
Over the past few years, the average financial returns of licensed heat suppliers have declined. This has been revealed by the Financial-returns Monitor over 2019 and 2020, which has been published by the Netherlands Authority for Consumers and Markets (ACM). The decrease is predominantly caused by the fact that, over the past few years, heat suppliers have made more investments in the creation and expansion of heat networks.
The number of heat networks has increased from 175 in 2018 to 232 in 2020. The thereto-associated investments also increased in 2020, by 27% compared with 2018. Investments are one factor affecting the returns of heat suppliers, but these are also affected by the purchase prices of natural gas and electricity, the weather, energy taxes and the Sustainable Energy Surcharge (ODE), the number of realized connections, and the ages of the heat networks.
Since returns are affected by multiple factors, higher heat tariffs do not automatically result in higher returns too. This can be observed in, for example, the trend of the average returns in relation to turnovers. In 2019, the heat supply tariff increased, and, so did turnovers (in part because of that tariff increase), but the average returns decreased compared with 2018. In the Financial-returns Monitor, ACM takes a closer look at the effects of different factors on returns.
The trend of the average returns of licensed heat suppliers over the past few years is as follows:
2015: 2.2%
2016: 4.8%
2017: 5.5%
2018: 6.4%
2019: 5.5%
2020: 4.2%
Under the Dutch Heat Act, ACM examines the financial returns of heat suppliers, and reports its findings to the Dutch Minister of Economic Affairs and Climate Policy (EZK). ACM publishes the Financial-returns Monitor once every two years.
On 8 October 2021, ACM was granted additional powers to determine a reasonable return for heat suppliers. As a result thereof, ACM expects to be able to test the returns of heat suppliers against a standard determined by ACM in time for the next Financial-returns Monitor. In 2021, ACM started the development of a method for determining reasonable returns, and, in that process, has also invited representatives of the heat sector and of energy users.
More information
- How does ACM set the heat tariffs? (in Dutch)
See also
- 2019 and 2020 Financial-returns Monitor (in Dutch)