Transfer of management of regional transmission grids: current state of affairs

Monday 3 November was a major milestone in the integration of the regional transmission grids into the TenneT organisation. On that date, some 140 former employees of Essent Netwerk began their first working day at TenneT. Most of these new colleagues will be working at the new regional offices in Hoogeveen and Weert, while the rest will be based at our head office in Arnhem.

The former Essent employees were transferred to TenneT under the provisions of the Independent Grid Administration Act (also known as the Segmentation Act). Under this Act, responsibility for the management of all transmission grids of 110 kV and higher was assigned to TenneT as of 1 January 2008. Because a transition of this kind must be completed with due care and attention, the whole process takes considerable time. TenneT and the regional grid operators have therefore agreed to let the operators retain responsibility for operational management for the time being. The various tasks will then be transferred to TenneT in stages in the 2008-2010 period.

Maintenance
TenneT has offered employment contracts to the former Essent Netwerk staff members. They will be responsible for performing maintenance on the 110-kV and 150-kV grids. Different arrangements have been made with Nuon Tecno and Delta Infra. In the coming years, the performance of maintenance work will be contracted out to these grid operators under service agreements. No arrangement has been concluded as of yet with Stedin (formerly Eneco Netbeheer) regarding the maintenance of their grids.

Operational management
In 2009 TenneT will start integrating the various regional operational management tasks at a second National Control Centre in Ede. TenneT will take over the operations of Continuon first. This step is scheduled for the summer of 2009 and will be followed by the transfer of the operations of Essent Netwerk Noord in September and those of Essent Netwerk Zuid toward the end of 2009. Once the operations of Delta Infra are transferred to TenneT in 2010, the integration of all operational management tasks in the TenneT organisation will be complete. Throughout the transition process, the day-to-day work will continue for TenneT’s staff – after all, we cannot allow the lights to go out. Companies and private individuals should not be affected by the transition and the safety of our staff must not be jeopardised in any way.

Constructive collaboration
From the very start of the transfer process TenneT has enjoyed a fruitful and constructive collaboration with the regional grid operators Essent Netwerk, Continuon, Stedin, and Delta Netwerkbeheer. All parties feel a responsibility to society to implement the law. However, it soon transpired that there would also be considerable debate about crucial issues like Cross-Border Lease contracts and the ‘break’ (i.e. the grid entry point) between the high- and medium-voltage grids.

Separation between high- and medium-voltage grids
The first tough nut that was cracked concerned the question of the ‘break’: where does one grid end and another begin? In spite of frequent high-level consultations and well-substantiated reports by various research agencies, the parties failed to reach agreement. After six months of talks, Minister Van der Hoeven of Economic Affairs intervened and decided that responsibility for the transformers would remain with the regional grid operators. This means that TenneT is responsible for managing all grids with a voltage level of 110 kV and higher up to (but not including) the transformers.

Cross-Border Lease contracts
The so-called Cross-Border Lease contracts (CBLs) constituted a second obstacle to the transfer of management tasks. Stedin, in particular, has entered into long-term lease arrangements with American investors that cannot be terminated at short notice. Under these financial arrangements, the investors have formal ownership of Stedin’s grids. Despite the provisions of the Independent Grid Administration Act, management of Stedin’s grids cannot be transferred to TenneT without permission from the investors. A solution to this problem is still being discussed, with the aim of completing the transfer of operational management tasks as soon as possible.

Ownership
The grid operators retained ownership of the regional grids when the management tasks were transferred to TenneT in January 2008. TenneT must pay compensation to the grid operators as long as they retain ownership of the regional grids. TenneT’s aim is eventually to purchase the grid infrastructure so as to become a single, strong national grid operator.