Stek assists grid operators in pioneering initiative to increase sustainability

The regional grid operators in the Netherlands, including Enexis, Liander and Stedin, are currently working together to reduce their carbon footprint. They have recently agreed to include a certain (minimum) price in their calculation models for planned investments, in order to reflect the CO2 emissions associated with a particular project. By doing so, sustainability will play a bigger role in investment decisions and tenders set out by the grid operators. This will make the energy network more efficient and suppliers will have an incentive to develop a product range that scores low on CO2 emissions. The transfer price will be raised in accordance with a growth model so that the carbon price remains in line with the current price for CO2 per tonne in the international emissions trading system ETS. The grid operators expect that this initiative will contribute to making the energy sector more sustainable.

The Authority for the Consumers & Markets (ACM) has approved the grid operators’ initiative to work together to reduce carbon footprint. The initial price of €50 per tonne of CO2 will not have an appreciable effect on the costs and thus the tariffs of grid operators. The ACM concludes that even with a higher carbon price, the sustainability benefits outweigh the possible costs for users. All energy users benefit from the agreement if carbon emissions are reduced. The ACM also recognises that cooperation is necessary to achieve this benefit whilst sufficient room for competition remains. Therefore, this cooperation falls under the exception of the cartel prohibition and the grid operators are allowed to cooperate on this issue.

The joint carbon pricing by the grid operators is one of the first two sustainability initiatives that the ACM has assessed under the Draft Guideline on Sustainability Agreements. The Draft Guideline indicates which possibilities market parties have for making sustainability agreements, but also where the boundaries of competition law lie. The approval fits in is in line with the ACM’s policy agenda.

Stek is advising the grid operators on competition law issues related to this sustainability initiative. Stek is proud to be involved in one of the first sustainability initiatives to be approved by the ACM. This case is an example of how green partnerships, if well-designed and within the boundaries of competition law, can contribute to solving the climate crisis. Stek expects more of such initiatives to be reviewed by the ACM in the coming years. With this case, Stek has made a modest contribution to a green interpretation of the competition rules.

Please click here for the (Dutch) press release of ACM.