Due to the crisis that unfolded in 2022, the European Commission set out to tackle the issue of security of supply and competitiveness of gas purchases. To do so, the Commission launched the EU Energy Platform aiming to coordinate infrastructure use, promote negotiation among international partners and prepare the stage for joint gas and hydrogen purchases.
The culmination of a year of labour was AggregateEU. On behalf of the European Commission, PRISMA developed and now operates AggregateEU, a service which aggregates the demand of buyers in the EU or the Energy Community and matches it with the most competitive supply offers. The first short-term (monthly) tender took place on April 25th, 2023.
In total, four short-term tendering rounds have taken place over the course of a year. AggregateEU was able to match the aggregated demand with 42.13 billion cubic meters of gas offers from reliable suppliers. This result is nothing short of extraordinary.
Then, at the end of 2023, an important decision was made: AggregateEU would not only remain operative in 2024 but also extend its services.
The Introduction of Mid-Term Tenders
To address the growing demand for stability and predictability among participants, PRISMA, on behalf of the European Commission, has broadened its product portfolio by introducing Mid-Term Tenders. In these tenders, buyers will be able to submit their demand for seasonal six-month periods, going from April 2024 to October 2029.
Mid-Term Tenders are intended to:
- support industrial consumers and other wholesale consumers in exploring additional purchasing options under a pseudonym, i.e. attract sellers purely based on the demand profile;
- support sellers in identifying buyers who might be interested in a longer trading partnership – that is, up to 5 years.
How Mid-Term Tenders Differ from Short-Term Tenders
There are now two types of AggregateEU tenders on PRISMA: short-term and mid-term tenders. Although their process is very similar, mid-term and short-term tenders do differ in some significant respects. In particular, mid-term tenders are significantly different when it comes to (1) product duration, (2) demand aggregation, (3) offer process and (4) matching results as explained below:
1. Product Duration: Buyers submit their demand and sellers express their interest to sell gas for six-month periods - Summer and Winter. The Summer Period goes from April 1st to September 30th, whereas the Winter Period goes from October 1st to March 31st in the following year. Users can submit their demand for up to five years - that is, ten consecutive six-month periods. The earliest possible delivery runtime is anticipated to be Summer 2024. The last delivery runtime will be Summer 2029.
2. Demand Aggregation: The demand will not be aggregated at any given location for any given period. Rather, the demand of each individual buyer will be published as a discrete tender in which sellers can participate. Buyers can submit their demand for up to five years, or ten consecutive six-month periods. Each demand must meet the minimum stipulated quantity for the relevant product, whether LNG (1,800,000 MWh) or NBP (30,000 MWh). To avoid discrimination, each buyer will appear under a pseudonym.
3. Offer Process: Sellers must simply express their interest in supplying the whole demand for a specific buyer based on the different six-month periods for which the latter has submitted their demand. No further information is required.
4. Matching Results: Only buyers will receive the contact details of their suitable matches. At their discretion, they may proceed to contact those sellers and initiate the negotiation phase.
Regarding short-term tenders, the process remains the same as before. You can find further details in this article: What Are the Differences Between Short-Term and Mid-Term Tenders?