The European Union (EU) has launched a platform called AggregateEU that consolidates gas demand with the aim of reducing costs and ensuring a steady supply in the coming months. The voluntary scheme was agreed upon by member states in mid-December 2022, as part of a series of emergency measures to address the energy crisis caused in part by Russia’s invasion of Ukraine and decision to cut gas deliveries to the EU.
The platform aims to leverage the EU’s purchasing power with international suppliers by allowing energy companies in participating countries to submit their expected demand for liquified natural gas (LNG) and pipeline gas for the coming year, with monthly tendering rounds held to match that demand. EU countries are required to pool at least 15% of their respective storage obligations, which equates to about 13.5 billion cubic metres (bcm) for the year and will have to be purchased via the platform.
The platform is designed to avoid a repeat of the scramble for gas that occurred in spring and summer 2022 when member states were rushing to secure enough gas to power households and businesses during the winter months. This mad dash for gas, prompted by Russia’s decision to reduce pipeline deliveries to the EU, resulted in record-high prices of €321 per megawatt-hour in August 2022.
The platform has received registrations from 76 companies on both the buying and selling sides, with buyers from the 27 EU member states, as well as countries in the Energy Community, which includes Ukraine, Moldova, Georgia, and Western Balkan states. Sellers must not be owned or controlled in part by a Russian entity.
There are two models of cooperation to facilitate the pooling of demand and lower prices. The first is through a Central Buyer, which would agree to purchase gas on behalf of other companies based on a bilateral contract. The other model is through an Agent on Behalf that can provide complementary services, such as transportation, to companies that have already negotiated directly with a supplier to buy a certain volume of gas.
Buying companies have five days to put in their bids for the first tender rounds. Demand will then be pooled by the service provider, Prisma, which will put the tender out. Sellers are expected to put in their tenders on 9 May, with negotiations to follow. Contracting is forecast around 17 May, with deliveries expected a little over a month later. This process will be repeated on a monthly basis.
SOURCE: Ref- http://Alice Tidey
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