General

Seeking to tame soaring prices, EU to enable consortiums for gas purchases

To help drive down soaring energy prices, the EU on Tuesday said it would enable energy companies to set up consortiums for gas purchases.

“We know that Europe's energy demand is very large. So, it is logical that instead of outbidding each other, the member states and the energy companies should leverage their joint purchasing power, and for that we propose today legal tools for pooling energy demand at European level,” Ursula von der Leyen, European Commission president, told a press conference outlining a package of new measures to address high energy prices and ensure the security of supplies.

“We're also enabling energy companies to set up a gas purchase consortium so that they are together able to purchase gas,” she said, adding that the aggregation of demand will be mandatory for at least 15% of the volume needed to fill this storage.

Last year, she said, European energy companies were outbidding each other on the spot market and “driving the crisis up.”

Von der Leyen said solidarity is crucial in order for EU countries to be prepared “in case of a full gas and electricity disruption.”

Default rules will be established on solidarity among EU countries that apply in case of disruption when there is no bilateral agreement in place, said von der Leyen.

“We need to tame the (energy market) volatility,” she said, adding: “The current pricing benchmark is no longer adapted to a market that is shifting from pipeline gas to LNG.”

“We will develop a new benchmark and put in place a mechanism to limit excessive gas prices in the meantime,” she explained.

Source: Anadolu Agency