Principles of good supervision and The Regulation of the Dutch Drinking Water Sector

In March 2014, the OECD issued a report in which it indicated that the Netherlands “has an excellent track record on water management in several areas”. The OECD mentions for example that the Netherlands has developed a “strong economy and robust water industry”, this despite that 55% of the Netherlands’ territory is below sea level. However, the OECD also concluded that Dutch water governance “relies on a system of many checks and balances … [and] that system presents some limitations.” In response to the conclusion of the OECD, this article discusses the current framework of economic regulation of the Dutch drinking water sector. The article develops a normative framework to assess whether the current organisation of economic regulation is adequate. The assessment examines to which extent the principles of good regulation are observed by economic regulation of the drinking water sector. It is concluded that the Dutch framework of economic regulation of the drinking water sector displays several weaknesses in light of the principles of good regulation. In particular, the principles of transparency and independency need better observance. As a result the protection of the interests of the users of drinking water is at stake. This article ends with some recommendations to enhance the quality of economic regulation of the Dutch drinking water sector

The energy transition:Democracy, justice and good regulation of the heat market

This paper discusses whether the concepts of energy democracy, energy justice and the principles of good market regulation could play a role in developing a more consistent approach towards the regulation of the energy sector. It is concluded that the principles of good regulation can provide a useful framework within which advantages and disadvantages can be weighed of regulatory choices to be made when modernizing the regulation of the energy markets. A case study of the Dutch heat market is used as an example, showing that a lot remains to be gained in terms of flexible regulation and supervision and the facilitation of citizen participation. Both energy democracy and energy justice call for this. The lack of flexibility in the current regulatory framework could lead to ineffective and disproportionate regulation, hindering a sustainable, reliable and affordable development of the heat market. A larger need for flexibility is justified because of the differences between the types of heat networks. Customized solutions regarding unbundling and third-party access, including the modernization of the heat market, also require sufficient discretionary powers for the independent regulator that do not hinder but in fact stimulate the development of the heat market. Furthermore, increased citizen-participation is important in light of energy justice and energy democracy, which are energy specific concepts that overarch the principles of good regulation in the energy sector. Both concepts are based on the awareness that the energy transition is a matter for all citizens of the European Union and should not be ignored by policymakers and independent regulators. Since it is likely that most heat consumers will remain locked in for a relatively long time in natural monopolies facilitated by older generation heat networks and a lack of alternatives, substantive citizen-participation could yield positive results regarding community engagement in heat network management and heat suppl

Radical prosumer innovations in the electricity sector and the impact on prosumer regulation

The electricity sector is in a transition towards a Smart Energy System where the roles of private and institutional actors are evolving. This work deals with the influence of some technological innovations, enabling social innovations such as peer to peer trading and the participation in local energy collectives, on the regulation of the rights and obligations of consumers and prosumers in the electricity sector. It identifies the main radical innovations in the electricity market and analyses the legal and related non-legal obstacles that may impede the empowerment of energy consumers and prosumers. Some recommendations are provided to ensure that consumers and prosumers are empowered and can benefit from these new technological and social innovations in the electricity market. The recommendations relate to an accurate definition of prosumers and active consumers, the integration of demand response, the evolving role of distribution network operators and the birth of peer-to-peer trading

Waarborgen voor de energieconsument in de energietransitie

The Netherlands is lagging hopelessly behind in implementing European obligations for a transition to smart and sustainable energy, Lavrijssen argued in her address. In the energy system of the future, consumers will be more active players. Both market surveillance and legal protection of consumers are in urgent need of adjustment. According to Lavrijssen one of the major problems is that European and national laws are still based on the traditional, old-fashioned market model in which centrally managed, large-scale coal- and gas-fired power plants produce energy to customer demand. Energy consumers are regarded as passive parties. By contrast, the energy system of the future is smart and sustainable, with IT applications making it possible to efficiently match supply of and demand for sustainable energy. It will turn consumers into active players, responding to financial incentives to either or not use energy at specific moments, or supply self-generated energy to the system. The system will be organized in such a way that everybody will charge their cars when the sun is shining, for instance, or will postpone their use of energy when there is not enough sunshine or wind. Lavrijssen points out that new legislation is needed to ensure that innovations for energy transition can take place and for market parties and consumers to take on new roles. Procedures for the implementation of important energy decisions and the required level of legal protection will also have to be adjusted to the new systems and to the active role of consumers. Procedural innovations are needed to improve the position of energy consumers, giving them more of a say, increasing their participation, and offering them legal protection in regard to decisions on energy regulations by the Autoriteit Consument en Markt (ACM – Consumer and Market Authority) that affect their interests where affordable, reliable and sustainable energy supply is concerned. It is important that consumers be given better opportunities to exert influence in advance on the conditions and rates for access to the energy system. By creating support for the content of energy decisions, time–consuming and expensive legal procedures afterwards can be prevented. Lavrijssen supports earlier pleas for appointing an independent Climate Commissioner in the Netherlands. This Climate Commissioner would oversee the realization of a durable energy supply, and pursue this goal independently and consistently