The EU Energy Platform was key to EU’s diversification efforts in 2022, facilitating the signature of Memoranda of Understanding with the main gas exporting partner countries and enhancing international outreach to support the REPowerEU Plan.
It will focus on organising demand aggregation and joint purchasing of gas for coming winter’s (2023-2024) gas storage filling season. Close cooperation amongst the European Commission, EU countries and the industry will be crucial and the Commission will provide guidance to ensure that the joint purchasing mechanism complies with EU competition rules.
About the EU Energy Platform
The platform aims at coordinating EU action and negotiations with external upstream suppliers to prevent EU countries outbidding each other and at using the weight of the EU - as one of the biggest consumers of gas in the world - to achieve better conditions for all EU consumers.
It was initiated in April 2022 following the mandate of the European Council in response to the need to diversify away from Russian gas. It covers a range of actions regarding natural gas and LNG (and in the future hydrogen) to support the EU’s security of supply and access to affordable energy, including international outreach, demand aggregation, and efficient use of EU gas infrastructures
In October 2022, the European Council endorsed the joint purchasing of gas, coordinating and prioritising negotiations with reliable partners to seek mutually beneficial partnerships by exploiting the Union’s collective political and market weight and making full use of the EU Energy Platform, as some of the measures to tackle the energy crisis in Europe. Two months later, Council Regulation (EU) 2022/2576 on enhancing solidarity through better coordination of gas purchases, exchanges of gas across borders and reliable price benchmarks was adopted. It provides a legal framework for the EU Energy Platform to support EU countries in the preparation for the winter 2023/24 and notably in the filling of their gas storage facilities.
Timeline
- Q2 2023
Launching AggregateEU
- 19 December 2022
Adoption of Council Regulation (EU) 2022/2576
- 20 October 2022
- 7 April 2022
AggregateEU – a demand aggregation and joint purchasing mechanism
Building upon Council Regulation (EU) 2022/2576 (the Solidarity Regulation), proposed by the Commission on 18 October 2022 and adopted on 19 December by the Council, to address high gas prices and enhance solidarity in the EU through better coordination of gas purchases, the Commission also proposed a demand aggregation and joint purchasing mechanism. Said mechanism will support EU countries and Energy Community contracting parties to ensure sufficient gas supplies for the next winter 2023/2024.
EU countries are obliged to aggregate demand for volumes of gas equivalent to 15% of their respective storage filling obligations. Beyond the 15%, the aggregation will be voluntary but based on the same mechanism.
For this purpose, the Commission contracted a service provider (Prisma European Capacity Platform GmbH) to put in place the necessary mechanism, called AggregateEU. The mechanism aims to aggregate gas demand from companies established in the EU or in Energy Community countries and match it with the most competitive supply offers in time for the next storage filling season. Both EU and non-EU companies can participate as suppliers with the exceptions provided for in the Solidarity Regulation.
Following the matching of demand with supply, companies can voluntarily conclude purchasing contracts with gas suppliers, either individually or jointly. Company cooperation is especially beneficial for smaller companies and companies from landlocked countries with less global outreach or negotiating power.
How to participate in AggregateEU?
Gas companies and gas-consuming companies that are interested in joining AggregateEU need to register their organisation on the PRISMA platform.
Registered companies also need to subscribe to AggregateEU services before being able to participate in demand aggregation and joint tendering. These services relate to all operations of demand aggregation and joint purchasing service, operated by Prisma under the EU Energy Platform in accordance with Council Regulation 2022/2576.
Expression of interest
As some companies may not (i) have sufficient demand to be submitted on AggregateEU (the minimum quantities required for demand aggregation for virtual liquefied natural gas (LNG) is 300 GWh and for National Balancing Point/Virtual Trading Point (NVP/BPT) it is 5 GWh), (ii) count with the necessary capabilities or expertise to transport gas or perform negotiations; or (iii) benefit from a high creditworthiness to buy enough gas on their own, PRISMA launched a call for expression of interest on 22 March 2023. It is open to all companies to offer services in 2 models of cooperation:
- Agent-on-behalf in which buyers would entrust another company, to act as an agent providing services,which could include for example reservation of a slot on an LNG terminal, transport from a ship to the point of consumption, or balancing services
- Central Buyers in which buyers would ask other companies to act on their behalf as a Central Buyer, which would purchase gas for them
Cooperation framework
Companies interested in offering their services need to follow some principles to be in line with the EU legislation, in particular the provisions of the Solidarity Regulation and competition rules.
Each company can participate either as a seller or as a buyer in any single tender at AggregateEU, but not both.
Commercially sensitive information should only be exchanged bilaterally between the companies offering the services and their individual customers, and this bilateral exchange should be limited to what is necessary for the purposes of negotiating and implementing the respective agreements. Commercially sensitive information exchanged in this context can be considered necessary if the companies concerned can explain how it relates to the agreement they are negotiating, why it needs to be exchanged and why it would be proportionate to the objective of the agreement.
If the companies offering the service as Agent-on-behalf and Central Buyer are operating in the same market as one of its customers, they need to make sure that access to commercially sensitive information obtained from its customers for the purposes of carrying outits functionis limited to staff dedicated to this function, and that such information is not shared with other staff within the company. The Commission stands ready to assist interested companies through informal guidance, including a guidance letter under the Commission Notice on informal guidance relating to novel or unresolved questions concerning Articles 101 and 102 of the Treaty on the Functioning of the European Union that arise in individual cases (guidance letters) 2022/C 381/07 and based on a reasoned request pursuant to paragraphs 10 to 12 of said Notice.
The companies offering the services of Central Buyer should pass on the benefits deriving from the negotiation of the aggregated demand. Therefore, the Central Buyer should not derive rents on the commodity of gas procured through AggregateEU vis-à-vis buyers in its group. The Central Buyer could earn rent for ancillary services.
The gas demand for which a Central Buyer is procuring gas as part of AggregateEU should be submitted to AggregateEU, even if it was aggregated outside said mechanism. A confirmatory step will be introduced before the tenders are published to confirm the aggregated demand that is to be tendered.
Governance
To set up the joint purchasing mechanism, EU countries and industrial players from the EU and the Energy Community gather forces in different fora in order to provide their expertise and advice to the Commission. They do so through an ad hoc Steering Board, the regional groups and an Industry Advisory Group.
The ad hoc Steering Board consists of representatives of the Commission, all EU countries and representatives of the Energy Community Contracting Parties. They will help to assess whether or not gas purchases strengthen security of supply and respect the principle of solidarity. It was established on 13 January 2023 and its first meeting took place on 16 January, chaired by Vice-President Maroš Šefčovič. The second meeting took place on 2 March 2023 and in the press remarks that followed the meeting, Vice-President Šefčovič took stock of the progress made with the EU Energy Platform and presented the next steps.
Five regional groups have been set up to identify the needs, opportunities for common use of infrastructure and potential new suppliers. The latter gathers Member State and Energy Community representatives per region in order to consider infrastructure and market dynamics.
The regional groups are
- South East Europe: Bulgaria, Greece, Romania, Serbia, North Macedonia, Moldova and Ukraine
- Central and Eastern Europe : Poland, Czechia, Slovakia, Germany, Hungary, Austria, Slovenia, Croatia, Italy, Moldova and Ukraine
- South West Europe : France, Spain, Italy and Portugal (Malta and Germany as observers)
- North West Europe : France, Belgium, Netherlands, Luxembourg, Germany, Denmark, Sweden and Ireland
- Baltics and Finland : Lithuania, Latvia, Estonia and Finland (Poland as Observer)
The regional groups agree on action plans on gas demand, including potential gas demand reduction, infrastructure opportunities and supply options. They also discuss the potential of joint purchasing in each region and meet regularly in order to closely monitor the implementation of the actions and objectives set forth in their action plans.
Following the finalisation of the Action Plans of all regional groups, discussions on the potential of joint purchasing in each region are the main focus. On 7 March 2023, a workshop with the Regional Groups and industry players was organised to provide more details on the process of demand aggregation and joint purchasing developed by the service provider (PRISMA) and the Commission. PRISMA covered the key objectives and principles guiding the processes of registration, demand aggregation, joint tendering, matching and reporting. The workshop recording is available on YouTube.
The Industry Advisory Group is an informal expert group made up of 27 EU companies and 11 observers with experience in buying gas on global markets. It brings to the table non-binding advice and an industrial perspective on demand aggregation and joint purchasing. The group aims at providing
- feedback and comments on options issued by the Commission for natural gas, LNG (and, in the future, hydrogen) demand aggregation and joint purchasing
- insights and advice on how to ensure that the EU’s goal to reduce its dependency on gas supplies from Russia can be achieved in line with the timeline provided by the REPowerEU Communication from 8 March, with a particular focus on the diversification of gas supply
- information to support outreach activities
The members of the group were confirmed shortly after the end of a call for applications published on 6 September 2022. Their first meeting took place on 26 October 2022, and since then it meets regularly to closely monitor the implementation of demand aggregation and joint purchasing.
Transparency and information exchange
Article 3 of the Council Regulation (EU) 2022/2576 provides the Commission with the possibility of issuing recommendations on how to better coordinate purchases of gas in the EU. These recommendations can propose measures to avoid a potential negative impact of gas purchases by companies and authorities on joint purchasing of gas and on security of supply, energy solidarity and the internal market.
The basis for these recommendations is the notification of companies or authorities of EU countries about the intention to launch a tender to purchase gas or conclude negotiations with natural gas producers or suppliers from third countries on the purchase of gas of a volume above 5 TWh/year.
Our short guideline describes how to notify the Commission of this transparency provision and the SECEM2 guide explains how to configure e-mail clients to enable encrypted exchanges with Commission services.
Related links
- News
- First high-level roundtable on joint gas purchasing (20/12/2022)
- Commission establishes Industry Advisory Group to support the EU Energy Platform (19/10/2022)
- Commission makes additional proposals to fight high energy prices and ensure security of supply(18/10/2022)
- Action Plan for the Regional Energy Platform for South-East Europe (02/06/2022)
- Launching the EU Energy Platform Task-Force (25/05/2022)
- Bulgaria sets up the first regional task-force as part of the EU energy platform (28/04/2022)
- Council Regulation (EU) 2022/2576
- Commission expert group portal – Industry Advisory Group (19/10/2022)
- Energy Emergency - preparing, purchasing and protecting the EU together: Communication (COM(2022) 553) | Factsheet
- REPowerEU Plan (COM(2022)230)
- REPowerEU: Joint European Action for more affordable, secure and sustainable energy (COM(2022)108)
- Energy Community