On 22 December 2015, the Dutch Senate voted against the Electricity and Gas Act Bill, commonly referred to as the ‘STROOM’ bill, by only one vote (37/38). The 'STROOM' bill provided for a complete overhaul of the current Electricity Act and Gas Act and included the formal designation of TenneT TSO as the offshore transmission system operator, including the statutory basis for the construction of the offshore transmission system by TenneT.
Controversial Group prohibition provision
The parliamentary debate following the introduction of the bill was heavily coloured by the discussion on the continuation of the existing statutory ‘group prohibition’ in the bill. According to this group prohibition, system operators cannot be part of the same corporate group where commercial activities such as production, trade and supply are carried out. This statutory group prohibition has been the subject of litigation that resulted in the judgment of the Supreme Court of the Netherlands on 26 June 2015, in which the Supreme Court ruled that the group prohibition did not violate EU law.
During the debate in the Senate, a motion was proposed by the opposition to delay the entry into force of the group prohibition in the bill. When this motion was adopted by a majority, the Minister of Economic Affairs (MEA) declared that he would not execute the motion, which resulted in the whole bill being rejected by the smallest possible majority.
The ultimate result of the bill being voted down will be that the existing Electricity Act and Gas Act will remain in force, including the existing group prohibition. At the same time, the part of the bill that was favored by practically all parties, the roll out of the offshore transmission system, will be significantly delayed.
Consequences for the offshore grid plans
The STOOM bill laid down the specific rules and conditions for the designation of TenneT as the offshore transmission system operator. The bill provided that the MEA first develops a scenario on the basis of which TenneT would make an investment plan for the construction of the offshore transmission system for wind energy production. Pursuant to the bill, the construction costs of the offshore transmission system (estimated at EUR 4 billion) were to be financed from the renewable energy subsidy reserves. Also, the bill provided for a statutory liability of TenneT for damages resulting from construction delays and system unavailability. Clearly, these are crucial elements for the Netherlands’ offshore wind program and it is essential that they are put into a new bill that will have to pass Parliament as quickly as possible.
Although it is not yet clear what the MEA’s next move will be, it can be expected that it will copy the provisions dealing with the offshore transmission system from the STROOM bill and paste them into a new bill to amend the current Electricity Act 1998. The question will be how long it will take to have this new bill pass Parliament. During the debate yesterday, the minister indicated that this would take six months. Given the importance of this new piece of legislation for the national sustainability agenda, however, one would expect that this can be done much quicker and possibly in two to three months, as has been achieved recently (October 2013) with a (much more controversial) bill to introduce special transmission tariffs for large industries. Nevertheless, this will cause a significant delay in the envisaged 2015 Borssele offshore wind tender that was due to open mid January 2016 and close 31 March 2016.