DTe: Fair Competitive Position for Decentralised Electricity Producers

From 2006 onwards, operators of decentralised electricity generation installations, which feed electricity into regional grids (with a voltage of 110 kV), will receive compensation due to savings on transmission costs on TenneT's transmission grid.

Electricity generated by decentralised installations and supplied directly to the regional grids ensures that electricity does not have to be transmitted through TenneT's national high-voltage grid. This avoids grid losses (loss of electricity during electricity transmission). The compensation will be governed by the Grid Loss Savings Scheme [Regeling Uitgespaarde Netverliezen(RUN)], which will be included in the Electricity Tariff Code.

The difference in cost causation between centralised and decentralised generation of electricity was previously included in the transmission tariffs through the National Uniform Producer Transmission Tariff [Landelijk Uniform Producenten transporttarief (LUP)]. Producers with centralised installations paid a transmission tariff while decentralised electricity generators were exempted from this. When the National Uniform Producer Transmission Tariff was set at zero on 1 July 2004, this distinction no longer applied. This difference in cost causation is (once again) expressed through the Grid Loss Savings Scheme.

DTe emphasises that the Grid Loss Savings Scheme is not intended as a means of subsidising decentralised electricity generators. The sole purpose of the Grid Loss Savings Scheme is to give expression to the difference in cost causation between centralised electricity production and decentralised electricity production, as a result of which the costs of the grid can be allocated better to the various users of the grid.

DTe amends the Tariff Code after consultation with market parties. In doing so, it investigates how the present regulations should be amended so that the costs and savings resulting from decentralised electricity generation can be allocated properly to decentralised electricity generation and other customers (end users). TenneT will determine the level of compensation under the Grid Loss Savings Scheme. The regional grid managers will pay out this compensation. Since the Grid Loss Savings Scheme is based on present market conditions, DTe intends evaluating the Grid Loss Savings Scheme after three years.