Dutch energy-intensive industry presents Aurora report on rising network costs to Minister of Climate and Green Growth
New report shows network costs have tripled in two years, Belgium, France and Germany have 80% lower costs and fees will continue to increase until 2045.
Energy market analytics provider Aurora Energy Research has published a report on Dutch network costs, showing that they have tripled in the past two years, while network costs in Belgium, France, and Germany are about 80% lower. The increase is expected to continue until 2045 under unchanged policies.
Aurora Energy Research has found that network costs in the Netherlands will continue to rise over the coming decades, in a study commissioned by Tata Steel, Shell, Nyrstar, bp, Sabic, and Chemelot. The Aurora report, "Grid Fee Outlook for the Netherlands 2045," reveals that electricity network rates in the Netherlands are diverging even more from those of neighbouring countries than previously reported.
View Aurora's news item and the entire report here.
Network costs in the Netherlands are regulated by the Authority for Consumers and Markets (ACM) and cover transmission and system services. In the past two years, costs have nearly tripled, rising from 897 mn € to 2.5 bn € in 2024, primarily due to adjustments for high energy prices in 2022. Tennet, the Dutch transmission system operator (TSO), expects that costs will only decrease slightly in 2025 and 2026, as lower energy costs are partially offset by rising investments in the grid (offshore) and prepayments for future energy cost adjustments.
Discounts in neighboring countries
The Aurora study provides a forecast of total network costs towards 2045. These are translated into network rates for two typical consumption profiles: a flexible consumption profile of 3,000 full load hours and a base load consumption profile of 8,000 hours. The study shows that network rates in Germany, Belgium, and France are currently often more than 80% lower than in the Netherlands for both types of consumers. By 2030, Aurora expects that network rates in the Netherlands will remain higher than those of neighbouring countries for base load consumers; 15 times higher than in France, 6 times higher than in Germany, and 4 times higher than in Belgium. For flexible consumption, derived from new electrification technologies such as e-boilers and electrolysers, network rates remain up to 7 times higher than abroad, hindering the energy transition.
The Dutch coalition parties strive for a level playing field for the industry. Aurora’s study shows that the Dutch energy-intensive industry will incur significantly higher network rates in 2024, and without intervention, the competitive position will further deteriorate towards 2045. To bring the network rates for large consumers in line with those in neighbouring countries, over 300 mn € annually is currently needed, growing to more than 500 mn € by 2030.
Representatives of the involved companies and Aurora presented the report to Minister Hermans of Climate and Green Growth on August 14. In an accompanying letter, the companies request the minister to develop measures for both the short and long term to ensure that network costs in the Netherlands align with those of other European countries.
Jeroen Klumper, director Sustainability Tata Steel Netherland, stated:
“Tata Steel Netherlands wants and can contribute to the earning capacity and sustainability in the Netherlands. Our plan for making Green Steel has the potential to be one of the driving forces of the economy of the future. We are now seeing a decline in competitiveness due to rising network costs, among other things. This stands in the way of electrification and therefore the energy transition. The industry wants to contribute to making the Netherlands more sustainable. It must be clear that the investments will also pay off. Reasonable network costs that are in line with our neighboring countries are of great importance. Fortunately, the government recognizes the situation. I therefore hope that they use the results of this report when drawing up policy for the coming years."
Jesse Hettema, Head of the Netherlands & Belgium, at Aurora Energy Research, added:
“Rising grid fees risk becoming the showstopper in the energy transition. Lowering fees is required to enable electrification of industry, which is essential to continue the build out of renewables. "
Björn Hofman, Associate at Aurora Energy Research, added:
“The newly elected government indicated the ambition to pursue a more level playing field, which they can realise, but will come with a price tag. We hope this study will help in the understanding and in facilitating the discussion around the harmonisation of grid fees.”
Photo caption: Representatives of the energy-intensive industry present the Aurora report to Minister Hermans. In the photo, from left to right: Guido Smit (Shell), Jeroen Klumper (Tata Steel Netherlands), Sophie Hermans (Minister of Climate and Green Growth), Henk Leenders (Nyrstar), and Jesse Hettema (Aurora).