DTe Makes Dutch Electricity Markets More Transparent
In the short term, DTe will initiate a procedure aimed at amending the Grid and Measurement Codes, which contain the conditions for access to the electricity grid. The amendments are aimed at increasing the transparency of the electricity markets in the Netherlands. The regulator will consult market players, including TenneT (the national grid manager).
NMa and DTe are responsible for the proper functioning of the energy markets in the Netherlands. Sharp fluctuations in price trends on the electricity markets in June and July gave NMa and DTe cause to request the advice of the Market Surveillance Committee (MSC) with regard to the way the electricity market in the Netherlands functions. In its recommendations of 27 October, the MSC stated that the transparency of the electricity market in the Netherlands should be promoted vigorously.
The MSC noted that market players in the Netherlands have unequal access to market information on the basis of which they can take decisions to buy and sell. This impedes the proper functioning of the electricity market. The MSC included in its recommendations, for instance, the experience of other countries in relation to rules governing transparency.
In its recommendations, the MSC made concrete proposals to make more data available to all market participants. This includes, for instance, key data on system load (the input of electricity into the grid), export and import flows, the utilisation of capacity on the interconnectors, and planned and unplanned interruptions to production. Making this information available is meant to stimulate the proper functioning of the electricity markets. The form in which this data is made available must be such that it can be processed and analysed by market players with a view to supporting their market decisions, according to the MSC.
Parallel to the MSC's research, TenneT commissioned 'The Brattle GroupÂ’ (a research bureau) to carry out research into the strong fluctuations in prices in June and July and has presented the conclusions to DTe. In general, the conclusions correspond to the conclusions of the MSC with regard to transparency. On the basis of TenneT's research, further research will be carried out into the way fuel contracts affect the availability of production plant. The conditions subject to which interconnection capacity can be obtained may also be amended.
The MSC is an advisory committee under the leadership of Prof. David Newbery. The Committee was set up in mid-2001 by DTe and NMa. It analyses the way in which the liberalised electricity market functions in the Netherlands and gives DTe and NMa (solicited and unsolicited) advice on improving the operation of market forces.
*The MSC's recommendations can be obtained from the website.
TenneT's website ( www.tennet.nl) should be consulted for TenneT's report.