European Union: e-Newsletter Energy & Utilities Belgium And The Netherlands

Last Updated: 11 February 2013
Article by Harm Kerstholt, Marinke Israëls, Patrick Peeters and François Tulkens

Act implementing EU directives and regulations relating to electricity and gas (NL)

This Act of 12 July 2012 implements two EU directives which are part of the EU Third Energy Package: the Electricity Directive (2009/72/EC) and the Gas Directive (2009/73/EC), both adopted on 13 July 2009. The Act also introduces changes necessitated by the three EU regulations which are also part of the Package. The Act entered into force on 13 July 2012 (Bulletin of Acts and Degrees 2012, 334).

Sustainable Energy Surcharge Act (Wet opslag duurzame energie) (NL)

The Sustainable Energy Surcharge Act was published on 20 December 2012 and entered into force on 1 January 2013. The Act introduces a surcharge on the consumption of natural gas and electricity, to be levied and collected in the same way as the energy tax. The surcharge will be used to finance the SDE+ programme, a scheme which provides subsidies for projects promoting the development of sustainable energy (Bulletin of Acts and Degrees 2012, 335).

Congestion Management (Electricity) Decree (Besluit congestiemanagement elektriciteit) (NL)

This decree expands upon section 24a of the Electricity Act 1998. In the event of congestion, a grid manager is required to give priority to the transport of electricity produced from renewable sources within the area of congestion.

The degree gives further rules with regard to determining the congestion area, the methodology of congestion management, and the priority rules for renewable energy.

The decree does not expand upon the statutory provision under which the costs of congestion management may be allocated among the producers in the congestion area, because of objections by the European Commission to such an allocation. This means that for the time being, when a grid manager incurs costs in carrying out its statutory duties, these costs will be socialized and allocated among the end users.

The decree will enter into force at the same time as section 24a of the Electricity Act 1998, thereby deviating from the government's policy favouring fixed commencement dates. Neither the decree nor section 24a have yet entered into force. (Bulletin of Acts and Degrees 2012, 502)

Reduction in renewable energy subsidies (BE)

The governments, at all levels, have decided to reduce the subsidies for certain renewable energy sources.

The federal energy minister has announced in the press that the subsidies (through a guaranteed price for green certificates) for offshore wind farms will be lowered. On 13 July 2012, the Flemish Region had already resolved to gear incentives for green energy production to the "unprofitable component" of the technology at issue and the life of the installation (M.B./B.S. 20/07/2012). This effectively boils down to a reduction in subsidies. The new rules were implemented by the Flemish governmental decree of 21 December 2012 amending the Energy Decree of 19 November 2010 (M.B./B.S. 31/12/2012).

With regard to the Walloon Region, in November 2012 CWaPE (the Walloon energy regulator) proposed restricting support for small-scale solar panels to the period necessary to recover the investment (i.e., 7 years) (http://www.cwape.be/).

Bill to amend the Electricity Act 1998, the Gas Act and the Heating Supply Act (NL)

This bill largely consists of measures which were announced in the 2011 Energy Report and are together intended to remove certain concrete bottlenecks identified in the Report and is the first legislative proposal under the legislative package known as STROOM (which in Dutch means 'electricity'). The bill deals with the following subjects: gas quality, self-suppliers, pricing regulation, protection against external influences, the definition of "connection", the issuance and cancellation of guarantees of origin, and the definitions of "direct lines". We will soon be publishing a newsletter about this bill.

Not all of the action points set out in the Report and requiring a legislative amendment are covered in the bill: for example, the bill does not contain provisions facilitating the privatisation of minority interests in the national transmission system operators or requiring electricity suppliers to include a certain percentage of renewable energy in the energy they supply to their customers. If it is decided to implement these action points, that will be done through separate bills forming part of the legislative package known as STROOM. 

New rules with respect to indexation parameters for suppliers and other energy-related statutory changes (BE)

At the end of the energy price freeze (from 1 April through 31 December 2012), the federal energy minister announced that an agreement in principle had been reached on the determination of the parameters employed by suppliers on the Belgian market for the indexation of electricity and gas prices. Suppliers will henceforth only be allowed to change their parameters based on fluctuations in their actual supply costs. It is no longer allowed to vary parameters based on personnel costs, write-downs or operating costs. Parameters will be calculated solely on the basis of stock market quotation on the Central West European (CWE) market. For gas, however, unlike electricity, suppliers are allowed to take into account the oil index for a two-year transition period, provided the supplier can demonstrate that its actual supply includes gas whose price is determined, at least in part, on the basis of the oil index. Effective 2015, the coupling of gas prices and oil prices will be forbidden. This agreement has been laid down in the Royal Decrees of 21 December 2012, effective 1 April 2013 (M.B./B.S. 15/01/2013).

Effective 1 January 2013, end consumers of green power no longer benefit from the exemption from the federal contribution to the Kyoto Fund and the denuclearisation fund. Indeed, due to the purchase of guarantees of origin in foreign countries, the financing of these funds had been circumvented and the exemption had thus become untenable (M.B./B.S. 28/12/2012).

Policy letter by the Flemish energy minister (2012-2013 Policy Priorities) (23 October 2012) (BE)

This policy letter outlines the headway to be made in current and planned energy policy in the coming political year. The minister will focus on increasing the energy efficiency of buildings in the long term and on energy-intensive industry with which new energy policy agreements will be concluded. Attention will also be paid to implementing the new European directive on energy efficiency. Further, the minister will strive to ensure a more sustainable energy supply through a new policy to support the production of green power and green heat. Finally, improvements will be made to the energy infrastructure (smart meters, reliability of the grid, congestion management) (Vl. Parl. Stukken 1779).

EUROPE

Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme (EU)

On 22 May 2012, the European Commission adopted the abovementioned guidelines (published in the EU's official journal on 5 June 2012). The guidelines set out a framework under which EU Member States can compensate electro-intensive industries for part of the higher electricity costs expected to result from the stricter EU Emissions Trading Scheme (ETS) rules that will apply as from 2013. The Commission expects compliance with those rules to lead to higher electricity costs for companies such as steel and aluminium producers, and hence a risk that, due to the higher costs, such companies will suffer a loss of market share or shift production to countries outside the EU with less environmental regulation. The guidelines are intended to facilitate state aid measures to minimise that risk and enable EU targets for the reduction of greenhouse gas emissions to be met.

Entry into force of Energy Efficiency Directive on 4 December 2012 (EU)

The Energy Efficiency Directive (2012/27/EU) sets out measures intended to achieve the target of a 20% reduction in energy consumption within the EU by 2020, compared to 1990 levels. These measures include the following:

  • Each EU Member State must renovate 3% of the total floor area of heated and/or cooled buildings owned and occupied by its central government each year to meet certain minimum energy performance requirements.
  • Energy companies that are designated pursuant to the directive must set a cumulative end-use energy savings target, to be achieved by the end of 2020. That target must – in brief – be at least equivalent to achieving new savings each year of 1.5% of the annual energy sales to final customers.
  • All businesses (other than those classified as small or medium-sized enterprises) must be subject to an energy audit carried out once every four years by a qualified and/or accredited expert.
  • The directive must be implemented in the national laws of Member States by 5 June 2014.

CASE LAW

Judgments by Trade and Industry Appeals Tribunal on system services tariff (NL)

In two cases decided by the Trade and Industry Appeals Tribunal (College van Beroep voor het Bedrijfsleven) in the second half of 2012, the issue was whether a company with an indirect connection to TenneT's public electricity grid could be required to pay the system services tariff. In both cases the Tribunal ruled in favour of the company contesting the tariff, respectively Dow Benelux and Salinco.

Dow Benelux is connected to Dow Netwerk B.V.'s private electricity network which in turn is connected to Elsta's private network, which in turn is connected to the TenneT public grid. Dow argued that the obligation to pay the system services tariff did not apply in the case of an indirect connection to TenneT's public grid; the Dutch Competition Authority ("NMa") took the position that it did and ordered Dow to pay the tariff. Based on a literal interpretation of section 30 of the Electricity Act as in effect until July 2011, the Tribunal ruled, on appeal, that parties with an indirect connection to a public grid did not have to pay the system services tariff. For the period after July 2011, however, due to a change in the law, the Tribunal ruled that payment of the tariff was required. TenneT is currently working on proposed amendments to the NMa's (Electricity) Tariff Code regarding the rates to be applied to parties with an indirect connection.

The second case, between the NMa and Salinco, also involved an additional issue: the identity of the connected party. As from March 2009, did Salinco and the Akzo companies constitute one customer with one installation within the meaning of the Electricity Act (because Akzo Nobel as from that date had 100% control over Salinco's general partners)? The Tribunal held that where multiple separate legal entities and/or partnerships are connected as producer or customer to a system of connections, the system must be regarded as a network within the meaning of the Electricity Act. In the Tribunal's opinion, this is not otherwise where the legal entities and/or partnerships are part of one and the same corporate group and are integrated in terms of ownership. 

Judgments by Trade and Industry Appeals Tribunal on gas transport tariffs charged by Gas Transport Services B.V. (NL)

On 8 November 2012 the Trade and Industry Appeals Tribunal issued a series of judgments in appeals lodged by Energie-Nederland and the Association of Energy Producers (Vereniging van Energie producenten) against NMa decisions on gas transport tariffs charged by Gas Transport Services ("GTS"). The dispute concerned the "methodology decisions" for the years 2006-2009 and 2010-2013 which had been reissued by the NMa pursuant to an order by the Tribunal. The main points of dispute were the value of GTS and the amount of the tariffs. The Tribunal ruled in favour of the NMa on all points, upholding the latter's valuation of GTS's network in 2005 at EUR 4.8 billion. The existing tariffs remain in effect.

Judgment 135/2012 of the Constitutional Court of 30 October 2012 on the injection of green power onto the transmission grid (BE)

The Constitutional Court was requested to review the Flemish rules pursuant to which renewable energy producers that inject power onto the transmission grid, as opposed to producers that feed the distribution grid, are not entitled to an income guarantee through an obligation incumbent on the grid operators to purchase green power certificates at a minimum price, at the producers' request.

The Court held that this scheme is discriminatory and invalidated it "insofar as the obligations set out therein are not similarly applicable to the transmission grid operator". However, the Court maintained the effects of the invalidated provisions until such time as new rules enter into force or 1 July 2013, at the latest. By that time, the legislature must provide for a scheme which allows renewable energy producers injecting power onto the transmission grid to benefit from a minimum level of support as well. It follows from this judgment that this minimum support can be lower than that afforded to producers feeding the distribution grid (C.C. 2012 nr 135).

Judgment 89/2012 of the Constitutional Court of 12 July 2012 on the exemption from injection tariffs for renewable electricity. Charging of a grid fee to small-scale or decentralised power plants (BE)

The Constitutional Court, further to a petition filed by CREG, the federal energy regulator, invalidated the Flemish rules exempting from injection tariffs the electricity produced by means of renewable energy sources. The Court held that rules in relation to injection tariffs fall under the exclusive authority of the federal government (C.C. 2012 nr 89).

Meanwhile, in December 2012, CREG approved the tariffs of the distribution grid operators, pursuant to which a grid fee (for injection and draw-off) is charged to small-scale or decentralised power plants, such as those relying on solar panels (see the approval decisions, at http://www.creg.be/).

NMA – DUTCH COMPETITION AUTHORITY

Binding instruction to TenneT regarding maintenance of single-failure reserve (NL)

At the beginning of 2012, Yara Sluiskil B.V. filed an objection against the earlier refusal of the company's application for the imposition of a binding instruction (bindende aanwijzing) on the transmission system operator TenneT. By a decision rendered on 3 October 2012, the NMa's board (Raad van Bestuur) ruled that Yara Sluiskil's objection was well-founded and imposed a binding instruction on TenneT, requiring it to maintain a single-failure reserve (enkelvoudige storingsreserve) for TenneT-operated grids with a voltage level of 110kV or more. This obligation also applies in the event that activities such as testing or other maintenance activities are being carried out. TenneT must therefore organise its procedures and operations in such a way that the reserve is maintained in such cases.

Decision in dispute between Sapa Profiles and Liander: periodic connection tariffs (NL)

The subject of the dispute was which periodic connection tariff(s) Liander was entitled to charge Sapa Profiles. The NMa's board stated that, in order to answer this question, it was necessary to determine whether certain cables constitute part of Sapa's connection or part of Liander's grid. In its decision dated 24 July 2012 the board ruled that because, from a technical point of view, the cables can serve not only Sapa but also third parties, they should be classified as part of a grid managed by Liander. Therefore, Liander is not entitled to charge Sapa a periodic additional-length tariff in respect of those cables.

NMa upholds decision that it is not competent to rule on Dobbestroom/Enexis dispute (NL)

On 15 November 2012, the NMa's board rendered a decision confirming that it was not competent to rule on a dispute between Dobbestroom and Enexis about the transport of electricity to Dobbestroom and the tariffs that Enexis is entitled to charge in this regard. Dobbestroom had filed an objection against an earlier such decision. The board ruled that the connection between the Enexis grid and Dobbestroom's private network does not constitute a "connection" as defined under the Electricity Act. Consequently, neither the transport of electricity via that connection nor the related tariffs are regulated under the Act and therefore the NMa is not competent to rule on the dispute.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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