The Dutch Heating Supply Act [Warmtewet] is being amended, despite only having been in force for a few years. The upcoming amendment should result in better protection for consumers who have to deal with a monopolist heating supplier. The amendment is also intended to adjust the regulations regarding collective heating schemes to take account of future developments in the context of the energy transition. The Dutch House of Representatives [Tweede Kamer] voted on the amendment to the Heating Supply Act on 6 March 2018. The bill was passed by a margin of 123 to 27.
Several important changes relate to the regulation of tariffs. Although for the time being the natural gas reference price [gasreferentie] will continue to be applied to calculate the price of the supply component of heating, improvements will be made to the method for calculating the maximum price.
In addition, the maximum price for several new elements in the regulated tariffs system (the one-off connection fee, the disconnection fee, and the tariffs for providing heat interface units), will no longer be based on the natural gas reference price, but on the actual costs. Suppliers and customers will also have an opportunity to negotiate regarding the supply of heat and to opt for a tariffs based system other than the one based on the statutory regime.
Prior to the vote on 6 March 2018, several motions were submitted by the Dutch House of Representatives and one amendment was proposed. The amendment was withdrawn before the vote had even started. This amendment was intended to completely sever the link to the price of natural gas (the ‘not more than otherwise’ principle [niet-meer-dan-anders principe] (“NMTO”).
The Party for the Animals [Partij voor de Dieren] submitted a statement explaining their ‘no’ vote. They do not consider the use of residual heat originating from polluting industries as entirely sustainable and wish to prevent long-term commitments to using this residual heat which would postpone true sustainability measures. Long-term contracts of 20 or even 30 years, combined with the proposed amendment to the Heating Supply act, would result in lock-ins and dependence on non-sustainable sources that cannot easily be discontinued.
Of the total of 17 motions that were submitted, 7 were passed; we address these 7 motions briefly below.
a. Motion by MP Beckerman, et al. [Parliamentary Documents II 2017/18, 34 723, 11]
Beckerman, et al., noted that residences should be able to be heated without gas as soon as possible. Alternatives are often more expensive for residents and the NMTO will no longer be sustainable over the longer term. She moved that the government focus on the affordability of alternative heating sources, including by formulating a control mechanism for the recorded costs.
b. Motion by MP Beckerman, et al. [Parliamentary Documents II 2017/18, 34 723, 12]
Beckerman, et al., noted that certain heating grids were connected to fossil-fuel sources and that the dependence on fossil fuels would therefore be maintained. This would negate the envisaged sustainability, and she moved the government to prevent this ‘lock-in’ to the extent possible.
c. Motion by MPs Yesilgöz-Zegerius and Jetten [Parliamentary Documents II 2017/18, 34 723, 13]
The members making this motion consider heating grids to be playing an increasing role in supplying residential and commercial heating, and that this heating supply requires large, open transport grids. They also considered that some form of independent heating grid management would allow new market actors to enter the heating market, thus ensuring competition and choices for consumers. They also noted that several regions are already working on developing large heat transport grids.
In their motion, they requested the government to investigate when and how the division between the production and supply of heating on the one hand, and heat transport and grid management on the other, will be possible, with a view to improving the operation of the market and making the supply of heating more sustainable.
d. Motion by MPs Jetten and Dik-Faber [Parliamentary Documents II 2017/18, 34 723, 20]
The members noted that heating grids could be fed by various sources of heat and that the footprint can differ sharply from source to source. They also considered that making the provision of heating more sustainable should be a part of the discussions with market parties relating to the Climate Agreement [Klimaatakkoord]. It would also be desirable to have insight into, and continuous improvement of, the CO2 performance of heating grids.
The MPs requested the government to join forces with the industry to determine how users can be informed, in an accessible manner, about the heating source and how sustainable it is (for example, via a future-proof CO2 performance label). They also requested that agreements should be made with the industry to make heating grids greener and to come up with proposals to provide additional incentives for sustainability measures.
e. Motion by MPs Dik-Faber and Jetten [Parliamentary Documents II 2017/18, 34 723, 22]
In this motion, the MPs consider it important that saving of energy ("step one of the trias energetica") is not ignored in the heating supply transition. They requested the government to work together with parties such as heating companies and the construction industry to combine energy savings with sustainable heating.
f. Motion by MP Van der Lee [Parliamentary Documents II 2017/18, 34 723, 24]
Van der Lee noted that, for reasons of safety, both the installation and maintenance of heat interface units remain the exclusive provinces of the heating supplier. Van der Lee considers this fact to be obstructing the operation of the market and competition, which may negatively impact the prices consumers have to pay. He requests the government to have an investigation performed to determine whether, in future, it will be possible for other parties to manufacture heat interface units that meet the proper requirements. Based on that investigation, a decision can be taken with regard to marketing the heat interface units.
g. Amended motion by MP Dik-Faber, et al. [Parliamentary Documents II 2017/18, 34 723, 29]
In this motion, MP Dik-Faber requested the government to investigate, in the run-up to the amended Heating Supply Act, whether there may be any alternatives for the natural gas reference price (NMTO).
Follow-up and questions?
On 13 March 2018, the Senate Committee on Economic Affairs, Climate/Agriculture, Nature, and Food Quality [Economische Zaken en Klimaat/Landbouw, Natuur en Voedselkwaliteit] will be discussing the further preparation of the bill. Do you have questions about the consequences for your business? Please do not hesitate to contact us.