Market Consultation

By the end of this week, on May 15th, the current market consultation round of the Dutch TSO, TenneT, regarding the new Dutch rules on grid connection of offshore wind power generation will close. Although comments and suggestions that are received later may still be taken on board, it is suggested to provide feedback this week.

Legislative push

The new proposals form a part of the legislative push aimed at having much of the legal framework for offshore wind farms ready when the Dutch auctions start for 700 MW at the Borssele site. This is planned to take place in December of this year. The proposals contain a new Offshore Code and a new standard offshore realization agreement (“REA”) and connection and transport agreement (“CTA”).

Offshore Code

The Offshore Code will be based on the offshore parts of the draft EU Regulation establishing a network code on requirements for grid connection of power generators (“RfG”).  The EU Regulation is intended to set out harmonized rules in order to provide a clear legal framework for grid connections. This will facilitate the  EU-wide trade in electricity, ensure system security, and in particular facilitate the integration of renewable electricity sources and allow a more efficient use of grids and resources.

As a start, the chapters of the draft EU Regulation related to offshore power park modules will be implemented in the Dutch national codes. This is planned as from the start of the Borssele tenders. The Regulation is expected to be approved by the EU Parliament and European Council in the second or third quarter of this year and will then have to be implemented in the Member States within two years. To prepare the new Dutch Code on offshore wind grid connection, the Dutch regulator, ACM, is most likely prepared to use an expedited procedure. This procedure has already started through market consultations and should lead to a formal ACM decision and publication by October this year. Objections and appeal against the decision are of course possible, and may delay the process.

Standard Offshore Agreements

The new REA is a contract between the entity constructing the offshore wind farm and the Dutch TSO. It regulates the construction of the grid connection and deals with issues like the basic design of the grid connection, access to the platform to connect the inter-array cables, conditions and timing of the completion of the grid connection and mandatory compensation in case of delays. Issues under discussion include the availability planning, commencement and term of the agreement and early termination and the liability regime.

The CTA sets out the terms and conditions related to the operational phase, maximum available capacity and the contracted transport capacity, transport and metering tariffs, operational/control center arrangements and  mandatory compensation in case of interruption of the connection. The TSO plans to finalize its market consultation and multilateral discussions with representative bodies by the end of this quarter, so that it can have its standard contracts vetted by the ACM in the fall of this year and publish them before year-end. Under discussion are, among other things, transmission rights, changes to the platform or the connection, transparency requirements and the liability regime.  Once the standard agreements are approved by the ACM, the TSO is obligated by law to apply them in an objective, transparent and non-discriminatory basis