dr. G.J. Zijlstra Programm manager Platform Energy Liberalization

1. P V E dr. G.J. ZijlstraProgramm manager Platform Energy Liberalization Dutch grid administrators: Administrative cornerstone in the market CIRED 2003, Barcelona 15 May Impact of deregulation on the Electricity distribution business

2. Dutch electricity supply 10 grid operators/administrators 7.5 mln. connected customers TSO: TenneT

3. Dutch gas supply 12 grid operators/administrators 6.8 mln. connected customers TSO: GasTransport Services (GTS)

4. Liberalization of Electricity and Gas market

5. Platform Government (Ministry of Economic Affairs) TSO electricity (TenneT) TSO gas (Gasunie) Associations of Energy companies (EnergieNed and VOEG) Representative organisations of customers (VNO, MKB, LTO) Agreement Programm team Organisation Market forum Customer organisations Suppliers organisations Producers organisations Grid operators Consultation Working committees Proposals Company programm managers Implementation June 2000 start of Platform Energyliberalisation (PVE)

6. Operating conditions for making the “rules of the game” • Electricity Law 1998: regulated T.P.A.; Gas Law 2000: negociated T.P.A. • Little focus with energy companies on market “rules of the game” - Mergers - Separation grid operation from energy company • Changing political priorities from “market solves all problems” to “market generates problems” A Platform Agreement is a gentleman’s agreement between government, suppliers, grid operators and customers. Provisions of the agreements are implemented in law making, codes and contracts by the partners

7. Products of Platform • Green electricitymarket - green certificate system - phasing of the market (open 1-7-2001) - preliminary market procedures (administration) • Retailmarket gas and elektricity - retail model - supplier switch procedure - customer home moving procedure - profiles and reconciliation systems - supplier of last resort • Wholesale market gas - allocation of gas volumes • Free meteringmarket (per 1-8-2002) - Metering Code Elektricity - Metering Code Gas

8. Principals for Platform • The market operations should be effective, clear and low costs (common standards and automation of procedures) • Supplier is the main player for the customer in the energy market • No barriers to switch • Respecting the difference between monopoly (grid operators) and market (suppliers/metering companies) • The commercial proces should not influence the security of supply • Simular procedures for the gas and elektricity market • The grid operator is the administrative cornerstone

9. Roles in the market ? Customer - choses supplier - choses metering company Supplier - supplies energy ? ? ? ? Grid operator - supplies transports - registers - physical security of supply Metering company - supplies metering services - supplies metering data ?

10. Structure Dutch electricity market

11. Structure Dutch gas market

12. The grid connection is a crucial transaction point Registration • Unique connection number • Customer • Supplier • Programm responsible party or shipper • Metering company • Metering data • Transport capacity Regional grid administrator has a central registration role: he “owns” the connection register

13. Supplier model retailmarket Supplier is the main player for customer in the energymarket

14. Switching of supplier • Customer signs a contract with supplier • New supplier informs grid operator • Grid operator checks data and registers • Grid operator informs old and new supplier, PR/shipper and metering company of the switch • No charge for the customer • Easy to initiate by the customer • Short leadtime Regional grid operator/administrator checks, registers and informs

15. Profiles and reconciliation • Profiles are necessary for the determination and allocation of supplied volumes • Reconciliation is important as a correction proces on the volumes determined through profiles Regional grid operator/administrator calculates the supplied volumes and informs supplier (billing) and system operator (balance control)

16. Supplier of last resort • The failure of a supplier to fullfill the programm responsibility or shipper contract triggers the proces • Central role for the system operators • Supplier choice for the customer • Minimal societal and customer costs Regional grid operator/administrator implements the required administrative changes (connection register) and informs the supplier of last resort

17. Implementation • Translating procedures in IT-processes and IT-messages • Implementing and changing IT-processes *New systems for profiles, reconciliation, and allocation * New system for connectionsregister * Changing systems to implement new procedures • Design and implementation of IT-messages * language: Edine - Edigas * connections and servers * testing • Changing working procedures • Changing organizational structures • Updating datafiles

18. Grid operator Recieves metervalues Customer Metering company GTS Recieves caloric data Supplies metervalues Supplies caloric data per grid area Reads meter and transmits data Determines caloric volumes per shipper/ supplier Recieves metervalues, caloric volume and bill Receives caloric volumes per shipper Retail supplier Receives metervalues Shipper Receives forecasts per shipper Recieves caloric volumes Makes forecast Receives caloric volumes Determines unbalance per shipper Determines bill Receives unbalance Simplified handling of metering data (gas)

19. Lessons learned • Unnecessary differences in regulations for electricity and gas lead to complex procedures and delay • Unclear lawmaking leads to confusion and delay (meteringmarket and position of supplier) • A convergence of actions at the same time lead to uncertaincy and mistakes (opening energymarket and meteringmarket and adjusting of metering) • A lack of awareness for the central role of procedures in the market leads to a lack of commitment and capacity reservation • The souvereign will of the people is difficult to match with the requirements of procesmanagement • Stick to your principles, stick to your time schedule, communicate and gain commitment