EU Energy Platform and AggregateEU: Strengthening Energy Security and Diversification
In response to the global energy market challenges triggered by Russia's invasion of Ukraine, the EU implemented the REPowerEU Plan to bolster energy resilience and reduce dependence on Russian gas. As part of this initiative, the EU Energy Platform was launched in April 2022, focusing on demand aggregation, efficient infrastructure use, and international outreach.
Objectives of the EU Energy Platform
- Demand aggregation and joint purchasing of gas
- Most efficient use of existing infrastructure
- International outreach
The EU Energy Platform aims to coordinate EU efforts in global energy markets, prevent bidding competition among member states, and leverage political and market influence to diversify supplies. It plays a crucial role in actions related to natural gas, LNG, and future hydrogen projects, supporting security of supply and affordable energy access.
Key Achievements
The EU Energy Platform has successfully diversified supplies, enhanced infrastructure efficiency, and engaged in negotiations with reliable international partners. The gas market witnessed challenges due to Russia's manipulation of supply, leading to a substantial surge in gas prices. In response, the Council adopted an emergency Regulation in December 2022 to enhance solidarity, coordinate gas purchases, and establish reliable price benchmarks.
AggregateEU Initiative
Under the EU Energy Platform, AggregateEU is a flagship initiative designed to implement demand aggregation, ensuring coordinated natural gas purchases at the European level. Operated by Prisma European Capacity Platform GmbH, AggregateEU aims to contribute to diverse gas supplies for the winter of 2023/2024, reducing price volatility and increasing predictability.
Operation of AggregateEU
AggregateEU pools gas demand from EU and Energy Community companies, matching it with competitive supply offers. Four tendering rounds held from April to December 2023 resulted in the aggregation of over 54 bcm of gas demand and the matching of more than 42 bcm to cover European demand. The mechanism has attracted strong interest from market players.
Legal Basis Extension
The Council agreed to extend the legal basis for AggregateEU until December 31, 2024, following the Commission's proposal. This extension ensures continued support for demand aggregation and coordinated gas purchases.
How AggregateEU Works
AggregateEU facilitates the pooling of gas demand and the matching of demand with competitive supply offers. Companies can voluntarily enter purchasing contracts with gas suppliers, benefiting smaller companies and those with less negotiating power. EU countries must aggregate gas demand equivalent to 15% of their storage filling obligations, with additional aggregation being voluntary but following the same mechanism.
Conclusion
The EU Energy Platform, through initiatives like AggregateEU, plays a pivotal role in ensuring energy security, diversifying supplies, and enhancing coordination in the face of global energy challenges. The extension of AggregateEU's legal basis signifies a continued commitment to these objectives until the end of 2024.