The first two rounds of tenders for AggregateEU have been completed. A total volume of 22.88 billion cubic metres - i.e. around 250 TWh of gas demand and supply - have been matched. This success is remarkable given the rather low expectations of traders active in Germany. However, the EU Commission's Directorate-General for Energy (DG ENER) sees room for improvement in the participation of industrial companies, which are generally interested but only a few of which have taken part. In order to attract more industrial customers to the platform, DG ENER is now setting up a sub-working group of the Industry Advisory Group. It is intended to help improve the platform for the industry, including future products and services.
Full supply contract prevents opportunities
I already addressed the obstacles that need to be removed in an energate guest article in April. The biggest shortcoming currently preventing greater industry participation is obvious, but cannot be solved by the platform: Most companies are still in full supply contracts, in which no third-party volumes may be brought in via AggregateEU without the consent of the respective supplier. This hurdle must first be removed by each company itself. How this can be done in individual cases depends on the natural gas supply contract. In principle, no supplier is obliged to open up contracts for third-party quantities. If they are not prepared to do so, supply via AggregateEU is not possible. The supply must then be redesigned and implemented as part of a multi-supplier model. Many fully supplied industrial companies that do not take this step into account in their next contract or renewal are therefore blocking their path towards AggregateEU. Neither the platform nor a working group can help here. The necessary switch to a multi-supplier model - regardless of whether an existing contract is opened or a new contract is concluded - is not trivial and requires systematic consideration of all steps and effects. A lot is changing: from the question of how a third-party quantity enters the company's balancing group to billing - including taxes and levies.
Minimum quantity requires bundling
Once this hurdle has been removed and participation is possible, the minimum volume in the market area of 5 GWh/month will already be high for many "medium-sized" industrial customers if they do not want to purchase everything via the platform. The challenge will be greater for LNG delivery points with a minimum volume of 300 GWh/month, where more attractive offers are likely to be made. Most companies will only be successful here if they bundle their demand as part of a gas pool before aggregating it via the platform. In addition, the support of a central buyer or agent on behalf will be required to bring and structure the supply into the market area.
It is not possible to start supplying gas via AggregateEU without thorough preparation. The new sub-working group can certainly provide good impetus to improve the handling of the platform or framework conditions (e.g. minimum quantity, products, transit times). However, this does not automatically mean greater participation on the part of the industry. But the good news remains: As rumoured, the platform will be further developed also in direction of green hydrogen, where the planned domestic production is not too abundant. Additionally convenient full supply models in energy supply are declining or becoming significantly more expensive. The switch to a multi-supplier model will increase flexibility and competitiveness in the purchase of forward products. AggregateEU then offers another option to diversify and optimise industrial customer's portfolio. Waiting and hoping for better times in full supply is not a good choice. Interested companies, not just industrial customers, are cordially invited to participate in this project and can contact us at www.gas-pool.eu.