Ecorys advises ACM on test of grid operators’ investment plans

The regional and national grid operators draw up investment plans every two years. In these investment plans, they describe all necessary investments to maintain and expand the Dutch electricity and gas grid. These investments are essential at a time when grid capacity is under pressure. The ACM tests network operators’ investment plans and has asked Ecorys for advice to improve the test.

Background

The Consumer & Market Authority (ACM) is an independent regulator that advocates well-functioning markets for people and businesses. In this case, the ACM assesses whether the grid operators’ plans have been reasonably arrived at and whether the necessity of the investments has been sufficiently substantiated. However, this test does not yet give the ACM the impact it would like. Ecorys has therefore been asked to develop possible improvements to the supervision of grid operators’ investments.

Specific areas of focus in the study are the prevention of underinvestment in the electricity grid, the increased uncertainty surrounding grid capacity, the importance of proper social prioritisation of investments, stakeholder dissatisfaction with the provision of information, the question of the optimal design of the test for investments in the offshore grid, the possible linking of IPs to tariff regulation and the desire to optimise the capacity commitment of the ACM and grid operators.

Key findings

Ecorys identified 21 improvement options, divided into five categories:

1. Increasing transparency by grid operators and the ACM;
2. Optimising the review process;
3. The ACM’s role interpretation during the review process;
4. The purpose and scope of investment plans;
5. A link between the investment plans and tariff regulation.
   

Ecorys recommends rapid implementation of eight relatively simple improvement options with limited costs, and further investigation of the implementation of four complex and costly improvement options. These improvement options will increase the transparency and quality of the test, optimise the scope of investment plans and improve the consistency of the test with other processes.

Read our full report (in Dutch) here.