ACM: tariffs of system operators expected to rise due to high energy prices and investments for the energy transition

Households must take into account that, in 2024, they will pay approximately 8 euros per month extra for the transportation of natural gas and electricity to their homes. The Netherlands Authority for Consumers and Markets (ACM) still needs to set the annual tariffs for system operators. In that context, system operators must submit their tariff proposals to ACM soon. ACM will publish these proposals in early October on its website, and will make a decision about the tariffs in late November.

As a result of the transition from fossil fuels to renewable energy, less and less natural gas is consumed, and more and more electricity (sustainable or otherwise) needs to be transported. In order to make this possible, system operators over the next few years need to invest billions of euros in grid expansions and adjustments. These costs for the energy transition must be paid collectively by all grid users (households and businesses) through the transport tariffs. ACM must give system operators sufficient financial leeway to make all necessary investments. In that context, it is ACM’s duty to strike, at all times, a balance between the three interests of affordability, reliability, and sustainability, now and in the future.

In 2023, all users of the distribution grids and natural-gas networks paid a total of approximately 6 billion euros in transport costs. This is expected to rise to approximately 7 billion euros in 2024. Users of Dutch transmission system operator TenneT’s high-voltage grid (HS grid) and extra-high-voltage grid (EHS grid) paid approximately 1.3 billion euros in transport costs in 2023. This is expected to rise to approximately 2.6 billion euros in 2024.

Tariff increases in 2024

The expected tariff increases in 2024 are largely caused by the higher energy prices. Energy losses occur when transmitting electricity and when converting, for example, high-voltage electricity to low-voltage electricity. Energy losses also occur when transporting natural gas. System operators are responsible for these costs, and pass these on to end-users in the transmission tariffs. In June 2023, TenneT already announced that the tariffs will go up considerably as a result of the higher energy prices. Distribution system operators (DSOs) and businesses that are connected to TenneT’s HS or EHS grids pay the transportation costs directly to TenneT. Other businesses and households that are connected to the low-voltage grids of the DSOs pay these costs through their own system operators.

A second reason for the tariff increases is a July 2023 ruling of the Dutch Trade and Industry Appeals Tribunal (CBb). In it, the CBb ruled that DSOs must have additional financial leeway for investments in connection with the energy transition. ACM has decided to spread out these extra revenues (a total of approximately 2 billion euros) for DSOs over the next three years. For 2024, an amount of approximately 500 million euros is concerned. For TenneT, this extra leeway (in total approximately 200 million euros) will be included in the tariffs after 2024.

In October 2023, ACM will publish the tariff proposals of the DSOs and TenneT, and will set the definitive tariff decisions in November 2023, at which point it will be clear what the tariffs for households and businesses in 2024 will be.

More information:

04-07-2023 Ruling of CBb: ACM must adjust parts of its method decisions (in Dutch)
26-04-2023 TenneT expects further increase in transmission tariffs in 2024