To become an energy supplier in the Netherlands is increasingly attractive for new market players. Anyone who wants to supply energy in the Netherlands must first determine to whom they will supply. That distinction is legally decisive. Whoever supplies electricity or gas to small-scale consumers is, in principle, subject to a licence requirement under the Energy Act 2023. This concerns consumers and small business customers with a connection of up to 3x80A for electricity or up to and including G25 for gas. Anyone supplying exclusively to large-scale consumers does not need a supply licence, but must register with the ACM and comply with the rules on balancing responsibility.
Market entry is attractive, but regulated. The energy transition, the rise of local energy generation and the growing demand for green power make it more interesting than ever for new parties to become an energy supplier. But the path to becoming an energy supplier through a supply licence sets high requirements — not only legal, but also financial and operational. In this article, Law & More guides you step by step through the process.
What is an energy supplier?
An energy supplier is a party that supplies electricity or gas to end users: consumers or business customers. The supplier purchases energy on the wholesale market or produces it itself, and then sells it to the end customer via a supply contract. The supplier is also the party that invoices the end user and is responsible for remitting energy tax and the ODE surcharge.
Supply is something different from transport. The physical infrastructure — the grid — is in the hands of grid operators such as Liander, Stedin or Enexis. This distinction is essential, because in practice it determines exactly what role a market party fulfils and which licences and registrations are required for it.
When are you subject to a licence requirement?
Under the Energy Act 2023 — which replaced the Electricity Act 1998 and the Gas Act — it is prohibited to supply energy to small-scale consumers without a licence. The licence requirement depends on three questions:
First: do you supply to small-scale consumers or to large-scale consumers? A licence is required for supply to small-scale consumers. For supply exclusively to large-scale consumers there is no licence requirement, but there is an obligation to register with the ACM.
Second: do you supply electricity, gas or both? There are two separate licences — one for electricity and one for gas. Anyone who wants to supply both submits two applications. It is also possible to start with one of the two and apply for the second licence later.
Third: do you use the public grid, or your own system? In the case of supply via a closed distribution system (CDS) — a defined industrial or commercial area such as a business park or port area — lighter rules may apply. In the case of supply via the public grid, a licence is in principle always required.
The licence application to the ACM
The Netherlands Authority for Consumers & Markets (ACM) grants the supply licence on the basis of Article 2.2 of the Energy Act. This is not a paper exercise. The ACM carries out a substantive assessment and may request additional information or schedule a hearing. A licence application is therefore essentially a suitability test on three pillars.
The first pillar is financial soundness. The applicant must demonstrate that it has sufficient capital to meet its obligations, even amid volatility in the energy market. In practice, annual accounts, bank guarantees, detailed liquidity planning and insight into the hedging strategy are requested. Parties with insufficient financial buffers are rejected or must provide additional securities.
The second pillar is the reliability of directors and executives. The ACM carries out a background check. Relevant criminal or administrative records — particularly in the financial sector or in the field of energy fraud — can block the application.
The third pillar is organisational and technical competence. The applicant must have a functioning back office, systems for meter reading and invoice processing, and a customer service that meets the statutory requirements. The connection to the EDSN data hub must also be arranged or demonstrably seriously in preparation. An application only stands a chance once not only the legal structure, but also the operational basis is in order.
Becoming an energy supplier: the application process step by step
Anyone planning to become an energy supplier in the Netherlands must allow for substantial preparation. In practice, preparing an application takes three to six months. Those who underestimate this get stuck on an incomplete file or a rejection that could have been remedied. The total lead time from preparation to actual supply is usually six to nine months.
The first step is determining the business model. Do you supply to consumers, business customers or both? Do you purchase energy yourself on the exchange, or do you work with a balance responsible party (BRP)? Do you have your own production portfolio, or are you purely a trader? These choices determine which contracts you need and which financial risks you bear.
The second step is the legal and structural set-up of the organisation. The supplier must be a legal entity, preferably a private or public limited company. Articles of association, governance and the relationship with any group companies must be transparent to the ACM.
The third step is drawing up the business plan and the financial substantiation. The ACM wants to see that the business model is viable and not dependent on uncertain external financing. A realistic customer growth model, a cash flow forecast for the first three years and a clear purchasing strategy are minimum requirements.
The fourth step is the technical preparation. You need an EAN code as a market party, must connect to the EDSN data hub for metering data and switch messages, and need a balance responsible party unless you act as a BRP yourself. It is precisely these elements that take more time in practice than applicants expect.
The fifth step is the formal submission to the ACM. Upon receipt, the ACM assesses the completeness of the file. If documents are missing, you are given the opportunity to supplement the file. After acceptance of the complete file, the ACM decides in principle within thirteen weeks.
Obligations after the licence is granted
The licence is not the end point, but the starting point of an ongoing set of obligations. As a licensed supplier, you are bound by the Energy Act and the lower-level regulations based on it.
A core obligation is the duty to supply: in principle, you must supply energy to every small-scale consumer who requests it. Supply contracts may not be refused or terminated without valid reason. If a customer switches to another supplier, you must cooperate with this. You are also obliged to correctly remit energy tax and the ODE surcharge to the Tax Authorities.
In addition, far-reaching information obligations apply. Contract terms must be transparent and comprehensible, invoices must meet statutory requirements, and customers must be informed in good time about tariff changes. Specific transparency requirements apply to suppliers with variable tariffs. The rules on the protected customer — a vulnerable customer category that enjoys extra protection — also deserve special attention.
The ACM supervises compliance with all these obligations and may impose fines in the event of violations. In serious cases, the licence may be revoked, after which an emergency supplier temporarily takes over the customers.
Special situations: producers, cooperatives and landlords
It is not only classic energy companies that may face the licence requirement. Anyone who generates energy themselves — via solar panels, wind turbines or other installations — and supplies that energy to third parties also needs a supply licence in principle.
There are, however, exceptions. The exemption for closed distribution systems (CDS) applies to defined areas such as business parks or port areas where energy is supplied to a limited number of users. Lighter rules apply to CDS suppliers.
Energy cooperatives that supply their members with energy fall partly outside the regular licensing regime, depending on the scale and structure of the supply. The same applies to landlords who supply energy to tenants via their own grid. In practice, the boundary is not always sharp: in the case of supply to members, tenants or within one’s own site, a careful legal analysis on a case-by-case basis is necessary. Law & More regularly advises parties operating in this grey area.
Common mistakes in the application
The most common reason for delay or rejection is insufficient financial substantiation. The ACM critically tests whether an applicant can withstand price volatility. A cursory business plan or an overly optimistic financing structure quickly leads to delay or rejection.
A second common mistake is underestimating the technical preparation time. The connection to EDSN and arranging the balancing responsibility take more time than most applicants expect. It regularly happens that a licence has already been granted but cannot yet be used because the technical chain is not yet operational.
A third point of attention is the reliability test of directors. New market parties often focus on rapid growth, but sometimes realise too late that a director or policymaker may not pass the ACM test. An early check of records prevents unpleasant surprises late in the process.
Frequently asked questions
Do I need a licence if I supply energy to tenants in my real estate portfolio?
That depends on the actual set-up. In the case of supply via your own grid, without using the public distribution grid, the exemption for closed distribution systems may apply. If supply takes place via the public grid, a licence is in principle required. The qualification strongly depends on the circumstances and requires a legal analysis for each situation.
Can I, as a startup, apply for a supply licence without a track record?
Yes. The ACM does not look at the number of years a company has existed, but at the financial soundness and the organisational competence at the time of application. A well-substantiated business plan, sufficient capital and experienced directors can compensate for a lack of track record.
How long does it take before I can actually supply energy?
Allow for at least six to nine months from the start of preparation to the moment of actual supply. The ACM decides in principle within thirteen weeks after a complete file, but the preparation itself already takes three to six months. Anyone who tackles the technical connection to EDSN too late incurs additional delay after the licence is granted.
Do I need to apply for separate licences for electricity and gas?
Yes. The Energy Act provides for separate licences for the supply of electricity and the supply of gas. A party that wants to supply both submits two applications. It is permitted to start with one of the two and apply for the second licence later.
What are the consequences if I supply energy to small-scale consumers without a licence?
Supply without a licence is a violation of the Energy Act and can lead to an administrative fine from the ACM. In addition, contracts may be legally vulnerable and there is a risk of reputational damage. The ACM has actively enforced in the past against parties that supplied without a licence, whether knowingly or unknowingly.
Can the ACM revoke a licence later?
Yes. The ACM can revoke a supply licence if a supplier structurally fails to meet its obligations, runs into financial difficulties or commits fraud. In that case, an emergency supplier steps in and temporarily takes over the customers. Financial continuity and ongoing compliance therefore remain crucial even after the licence is granted.
Is a licence required if I only supply to large-scale consumers?
No. For supply exclusively to large-scale consumers — customers with a connection larger than 3x80A for electricity or larger than G25 for gas — there is no licence requirement. However, you are obliged to register as a supplier with the ACM and to comply with the rules on balancing responsibility. Anyone who later also wants to serve small-scale consumers would be wise to prepare the licence application in good time.
I produce energy myself and supply it to others — do I then also need a licence?
In principle, yes. Anyone who generates energy themselves and supplies it to third parties beyond their own use is in principle subject to the licence requirement. Exceptions exist for closed distribution systems and partly for energy cooperatives, but their applicability depends on the specific facts. A legal review in advance is essential in these situations.
Conclusion: becoming an energy supplier in the Netherlands
Anyone who wants to become an energy supplier in the Netherlands enters a regulated market in which legal admission, financial robustness and operational readiness are closely intertwined. The licence requirement for supply to small-scale consumers is the central starting point, but certainly not the only point of attention. Equally important are a well-substantiated business plan, a solid technical set-up and a realistic preparation for the obligations that continue after the licence is granted.
A successful market entry therefore requires more than just a formal application. It is precisely the combination of legal analysis, technical preparation and ongoing compliance that determines whether a new supplier can operate sustainably and without unnecessary risks. For anyone who wants to become an energy supplier, early legal guidance makes the difference.
How Law & More can help you
Law & More has broad experience at the intersection of energy law, corporate law and regulatory matters. We guide new entrants in preparing and submitting the licence application, advise on the legal structure of the company and draw up the necessary contracts — from purchasing agreements to supply contracts and arrangements on balancing responsibility.
Law & More can also act where there is a discussion with the ACM or proceedings before the Trade and Industry Appeals Tribunal. For parties in a grey area — such as producers, cooperatives, landlords or operators of closed distribution systems — that guidance is often especially relevant.
Would you like to know what your concrete steps are to become an energy supplier and enter the energy market? Contact our energy law team for a no-obligation introductory meeting.
