The Energy Regulation and Markets Review - Stikeman Elliott

Netherlands
IV
ENERGY MARKETS
i
Development of energy markets
The trade and sale of power in the Netherlands takes place on three markets: the overthe-counter
market; the APX-ENDEX physical and futures exchange; and the imbalance
market operated by TenneT. Currently, there are seven electricity interconnectors on
the Dutch border: one with Norway (NorNed), one with the UK (BritNed), three with
Germany and two with Belgium. In addition to the roles of producer, trader or supplier,
a participant on the Dutch electricity market can also be a ‘programme responsible
party’. In that capacity a party must inform TenneT, who balances the system, on a
daily basis of all transactions with other parties which they have planned for the next
day. The difference between the programme and the actual amount of electricity that
has been consumed or supplied is the imbalance for which an imbalance tariff must be
paid to TenneT. Under the Electricity Act, all parties connected to the grid, excluding
small-scale users whose programme responsibility is by law assumed by their suppliers,
bear their own programme responsibility unless they have assigned this responsibility to
a programme responsible party (normally also their supplier).
With respect to gas, GTS offers the title transfer facility (‘TTF’), a virtual trading
place where market parties can transfer gas to another party. GTS registers the title
transfers of gas via the TTF by means of an electronic message that lists the volumes
of gas transferred, the period, and the purchasing and selling parties involved. Delivery
for trades on the physical and futures exchange APX-ENDEX also take place on the
TTF. The high-pressure gas transmission system is connected to Belgium, Germany and
England (BBL). Programme responsible parties (formally knows as ‘shippers’) arrange
for the gas to be transported within the national gas transmission system by contracting
transport capacity with GTS on the basis of the GTS Transmission Service Conditions.
GTS operates the market-based imbalance system.
ii Energy market rules and regulation
There is little red tape involved when it comes to operating on the electricity and gas markets
in the Netherlands. For both electricity and gas, suppliers who supply to small-scale users
must obtain a licence from the NCA and trading on the APX-ENDEX exchange requires
membership thereof. Moreover, programme responsible parties for electricity and gas
must meet the relevant requirements of TenneT and GTS respectively and in order to
participate on the TTF, a party must apply with GTS for a TTF subscription. Following
the entry into force of the Regulation on Energy Market Integrity and Transparency
(REMIT), parties who are active on the wholesale markets for electricity and gas are also
subject to certain information obligations aimed at preventing insider trading.
iii Contracts for sale of energy
Although the retail markets have been liberalised, a licence is required for the supply of
energy to small-scale users. Licensed suppliers are obliged to supply electricity and gas
in a reliable manner and on the basis of reasonable terms and conditions. In practice
all licensed suppliers in the Netherlands use the same general terms and conditions,
which were drafted in cooperation with the Dutch Consumer Union and the NCA.
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