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Impact of the Energy Transition Act (wet VET) on the activities of system operators and energy suppliers

Impact of the Energy Transition Act (wet VET) on the activities of sy

Impact of the Energy Transition Act (wet VET) on the activities of system operators and energy suppliers

20.04.2018

Legislative background

On 22 December 2015, the Dutch Senate rejected the legislative proposal "STROOM", which included provisions to effectuate the Dutch Energy Agreement (Energieakkoord), by the narrowest of margins. Subsequently, a substantively similar legislative proposal, the Energy Transition Act (wet VET) was tabled and then shelved, as it was declared "controversial" by the Dutch House of Representatives, meaning that debate on the proposal was postponed until the new Dutch government was in office.

The Energy Transition Act was finally adopted by the Dutch House of Representatives on 30 January 2018 and by the Dutch Senate on 3 April 2018. The Dutch Ministry of Economic Affairs and Climate Policy has indicated that part of the Act will come into effect on 1 July 2018 and the rest will follow on 1 January 2019. The full text can be found here.

Main objectives of the Energy Transition Act

One of the main objectives of the Energy Transition Act is to remove existing obstacles and bottlenecks for the energy transition. To achieve these objectives, the Energy Transition Act includes provisions on energy experiments and temporary tasks of system operators, investment plans and quality assurance systems, redundancy provisions, cross-shareholding by national transition system operators, closed distribution systems, removal of the duty to connect new homes to the gas network and other provisions.

Definition of tasks

The exhaustive definition of tasks to be performed by system operators is a key element of the Energy Transition Act. A system operator is only entitled to perform the tasks attributed to it by law under the Energy Transition Act. Some of these tasks are attributed exclusively to system operators.

The activities relating to the operation of networks which system operators are permitted to perform are:

  • construction and operation of cables and pipelines and connected devices
  • construction and operation of interconnectors
  • construction and operation of charging infrastructure for electric vehicles
  • construction, maintenance and making available of certain installations
  • metering services and metering devices
  • certification of renewable energy
  • energy exchanges
  • connection of installations, excluding production installations


The construction and operation activities relating to infrastructure, other than networks, which system operators are permitted to perform include:

  • antenna sites for ether communication
  • drinking water
  • carbon dioxide
  • other infrastructure, such as pipelines or installations for hydrogen, biogas, heat and cold

According to the legislator, this exhaustive definition is required to maintain a well-functioning energy market by protecting energy infrastructure against unnecessary (commercial) risks, ensuring the security of supply and laying the foundation for affordable energy supply. The disadvantages of allowing system operators to perform a broader range of activities would include the passing on of commercial risks to the network and that market parties will not be incentivised to innovate if publicly owned enterprises conduct these activities.

Flexibility

Given the complexity of the energy transition not every future activity can be anticipated. Therefore, there is some flexibility in the Energy Transition Act that allows other activities that are currently not allocated to system operators in the Energy Transition Act to be assigned to system operators by order in council (AMvB). In addition, the Dutch Ministry of Economic Affairs and Climate Policy may grant an exemption from the provisions of the Energy Transition Act to allow system operators to conduct certain experiments.

Some other anticipated legislative developments

In a letter to the Dutch Senate dated 11 December 2017, Minister Wiebes of the Ministry of Economic Affairs and Climate announced the legislative agenda in respect of the energy transition, including the Energy Transition Act. Other legislative developments anticipated in the near future include:

a legislative proposal to amend the Offshore Wind Energy Act (Wet windenergie op zee) to optimise regulation to facilitate tenders both with and without subsidy, which the Minister expects to submit to the Dutch House of Representatives before the summer of 2018.

a legislative proposal for the Energy Act (Energiewet), which would consolidate and modernise the Dutch Electricity Act (Electriciteitswet 1998) and the Dutch Gas Act (Gaswet). The Minister aims to submit this proposal to the Dutch House of Representatives in the first half of 2019. This proposal will also serve to better align Dutch law with current and future EU regulation.

a legislative proposal to further amend the Energy Act in order to implement the EU regulations and directives included in the Clean Energy Package, which the Minister expects to submit to the Dutch House of Representatives mid-2020.

a legislative proposal to further amend the Energy Act to codify remaining or additional issues from the present coalition agreement and the Dutch Climate Agreement (Klimaatakkoord) and the Dutch Energy Agreement (Energieakkoord), which the Minister expects to submit to the Dutch House of Representatives in early 2021.

Team

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