Liberalising Dutch Energy Markets. Champions and governance, rules and regulations. The 1995-2005 stories

Liberalisation of Dutch energy markets was not a sudden change of policy direction, but rather the result of policy evaluations and discussions which had already been going on for quite some time when the Minister of Economic Affairs issued an Energy White Paper in early 1996, and the EU Directives for the electricity market (1996) and the gas market (1998) were introduced. The Dutch followed a two-way track, aiming at a phased market liberalisation for gas and electricity with full legal electricity network unbundling and a merger of the four large power generators into a national champion. For gas, the Dutch position as a major natural gas producer led to the proposition of a structure that was much more careful, following the EU Directive to the millimetre. Some ten years since the White Paper was issued, Dutch decision-making, legislation and regulation of the energy market has gone through a fascinating, burdensome and complex, and sometimes chaotic and frustrating process. This study highlights the importance of market dynamics and the almost unbearable and unsolvable balance between policy, legislation and regulation. Further attention is given to the role of Dte ( Office of Energy Regulation) and its evolution into a full merger with the NMa (Netherlands Competition Authority), and ownership and privatisation discussions against the backdrop of the developments in the wider European energy markets. Overall, the study concludes that it appears to be too early to tell whether energy market policies of the last decade have delivered the expected results in either quantitative or monetary terms. What the process did deliver, however, was a lot of turbulence and dynamics, a boost for innovation in marketing and technology drives, and increased awareness about consumer power in which the threat to switch in itself produces results of improved service, more transparency and increased accountability.