2.    Nature of the business

TenneT provides transmission and system services, constructs, operates and manages transmission grids, facilitates the operation of the energy market, encourages the development of a sustainable energy market and rents out telecommunications infrastructure.

TenneT has been in charge of managing all grids with a voltage level of 110 kV and higher as of 1 January 2008, with the exception of grids encumbered by Cross Border Leases. This expansion of our remit is a consequence of the Independent Grid Administration Act, which was passed in 2006.

TenneT TSO is responsible for the operation of electricity transmission grids within the Netherlands, as well as cross-border interconnection grids rated for voltages of 110 kV or more. TenneT TSO also facilitates market activities by maintaining the energy balance between supply and demand, authenticating electricity produced by environmentally friendly methods, and operating grant schemes to encourage production of environmentally friendly electricity.

The parameters within which TenneT TSO operates are defined in legislation and regulations laid down by the Ministry of Economic Affairs and the Office of Energy Regulation. The most important of these instruments are the Electricity Act 1998 and the associated Technical Codes (Metering Code, System Code, Information Code and Grid Code), as well as the Tariff Code drawn up by the Office of Energy Regulation. These codes explain how the provisions of the Act should be complied with.

As administrator of the national high-voltage grid, TenneT TSO receives funds to enable it to perform its statutory duties. These assets, which may not be used to fund the company’s general activities, are managed by the Foundation for the Management of Allocated Funds from the National High-Voltage Grid (statutory name: Stichting Beheer Doelgelden Landelijk Hoogspanningsnet).

As stated above, TenneT TSO additionally facilitates the operation of the (sustainable) energy market. In this capacity, the company operates a number of energy exchanges and builds and operates interconnections. Energy exchanges are market places for the reconciliation of demand for and supply of energy, Energy exchanges arrange the financial settlement of anonymously negotiated transactions. TenneT also manages part of the infrastructure required to send and receive broadcasting signals. The entire issued share capital in TenneT Holding B.V. is held by the State of the Netherlands.

TenneT’s head office is located in Arnhem, the Netherlands.

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