The Dutch Cabinet issued its annual Energy Report in June. A notable development is the government's intention to allow for gradual minority privatisation of the transmission system operators (TSOs) for electricity (TenneT) and gas (GTS).
In the Energy Report the minister of economic affairs pointed to the ongoing integration of the northwest European energy markets and the recent steps taken by TenneT and GTS. TenneT has acquired parts of the German transmission network (formerly EOn Transpower), while GTS has acquired large parts of the German gas transmission network (formerly BEB).
The Cabinet plans to allow cross-border participation in TenneT and GTS by foreign network operators that can demonstrate a similar level of unbundling in their operations in their home country. This means that such network operators must be completely independent from trade, supply and production activities. It is uncertain whether the same level of unbundling (ie, ownership unbundling) is required, or whether the unbundling variations described in the EU Third Package (independent transmission operator and independent system operator) will equally be permissible.
Furthermore, the Cabinet will open the doors to private financing of both TSOs. The TSOs shall be permitted to draw the significant funds required for further enhancement of the networks to facilitate future developments (decentralised (green) generation, the much talked-about Gas Roundabout, cross-border integration) from private investors.
In order to maintain control over the TSOs, a minority privatisation shall be allowed. The Dutch state will maintain a majority stake andwill retain control, in conformity with normal corporate law and practice.
According to the minister, regional network operators will remain in public hands and will not be subject to privatisation.
A bill to amend the Electricity Act and the Gas Act will be required to arrange for such minority privatisation. Currently, a bill to implement the EU Third Package (Directives 2009/72/EC and 2009/73/EC) is pending in Parliament. The privatisation proposals in the Energy Report are not yet part of this bill.
The Second Chamber of Parliament (lower house) has reacted favourably to the plans. The Social Democrats suggested that the TSOs issue depositary receipts of shares in order to attract financing, but maintain control over the TSOs. The minister agreed that various financing structures must be investigated before the final decision on privatisation can be taken.
For further information please contact Roland de Vlam at Loyens & Loeff NV by telephone (+31 20 578 5785), fax (+31 20 578 5800) or email ([email protected]).
August 8 2011