The European Commission is launching on Tuesday the first process through which European companies can register their gas purchase needs through the AggregateEU mechanism, in order to prepare for the joint purchase of gas at the EU level, according to a press release from the Community Executive.
This is an essential step for the EU to prepare for the coming winter by filling its gas storages in a coordinated and timely manner, using its collective market power to negotiate better prices with international suppliers.
Registered businesses have one week, until May 2, to respond to this first round of aggregation. After submitting the individual requests of the companies, the necessary volumes will be aggregated and auctioned on the world market. Once the AggregateEU mechanism will match the collective European demand with the offers of international gas suppliers, the participating companies will initiate negotiations with the suppliers regarding the contractual conditions for the purchase and delivery of gas. The Commission will play no role in the negotiations. The first purchase contracts are expected before the beginning of summer, according to Agerpres.
Other auctions will be held periodically, once every two months, in the next 12-month period. The possibility for businesses to join the AggregateEU mechanism remains open. To date, 76 companies have been registered and more are in the process of being registered. In addition, 11 companies are prepared to provide services as a central buyer or representative agent.
Member States have committed to participate in demand aggregation for at least 15% of their national gas storage targets, representing approximately 13.5 billion cubic meters of gas per year. The gas storage and joint gas procurement targets were agreed in 2022 as emergency measures in response to Russia’s use of energy as a weapon and the unprecedented rise in energy prices since Russia’s invasion of Ukraine. Their aim is to reduce price volatility, ensure a secure and predictable supply of energy and capitalize on Europe’s collective market share. For the success of the REPowerEU plan and for the diversification of the EU’s energy supply, Russian gas is excluded from joint procurement.
AggregateEU is the EU mechanism that allows gas demand aggregation and joint procurement. It was established as a central component of the EU Energy Platform to support the EU’s efforts to phase out Russian gas by replacing it with more reliable alternatives. Its aim is to ensure a sufficient supply of gas while reducing the risk of companies outbidding each other on the world market. The Commission contracted the service provider Prisma European Capacity Platform GmbH to set up the demand aggregation and joint procurement mechanism through a secure online platform. The platform is accessible to businesses from EU countries and contracting parties to the Energy Community. Ukraine, Moldova and Serbia have expressed their interest in participating.
The EU energy platform was created in April 2022 following the mandate of the European Council and in response to the need to use other gases besides Russian ones. In October 2022, the European Council approved the joint purchase of natural gas, to facilitate negotiations with reliable partners and to seek mutually beneficial partnerships by exploiting the collective political and market weight of the Union.