- Hans Weber
- December 6, 2023
Czech Energy Companies Join European Platform for Joint Natural Gas Purchases
PRAGUE, June 21, 2023 – Several major energy companies in the Czech Republic have announced their intention to utilize a joint European platform for purchasing natural gas at more competitive prices. Aggregate EU, an online platform designed for energy companies, will facilitate the registration and procurement of gas from European suppliers. E.ON, ČEZ, innogy, and MND, prominent energy companies in the Czech Republic, have already expressed interest in participating, with the head of Prague’s gas company, Martin Pacovský, also confirming his company’s interest.
The decision to engage in joint gas purchasing is an outcome of the Czech Republic’s presidency of the EU Council. Minister of Industry and Trade, Jozef Síkela, stated that the collaborative approach aims to bolster reserves ahead of the winter season and mitigate sudden price spikes. Preliminary indications from participating companies suggest that the initial target of supplying 15 percent of funds through joint purchases could potentially be surpassed by up to three times.
However, analysts caution that the benefits of joint purchasing may not lead to significant cost savings. Producers worldwide are well aware of Europe’s efforts to prepare for the winter season, making it unlikely that they will substantially lower prices. Michal Kocůrek from consulting company EGÚ Brno highlighted that while demand for gas is one factor, ensuring an adequate supply remains a separate challenge.
Despite the potential limitations in terms of savings, the agreement is expected to help companies avoid competing for gas on the open market, as they did last year when prices soared to as high as EUR 300 per megawatt-hour. Analyst Jiří Gavor from ENA emphasized that exploring joint gas purchasing through AggregateEU is a worthwhile endeavor but advised against expecting significant cost reductions.
Meanwhile, the government has reported that reserves are currently over 70 percent full, according to Minister Síkela. Filling of reserves will continue until at least October to ensure they are fully replenished before the winter season. Energy companies from EU member states and contracting countries of the Energy Community, including Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Georgia, Moldova, Montenegro, Serbia, and Ukraine, are eligible to register on the AggregateEU platform.
By leveraging the joint purchasing capabilities offered by AggregateEU, Czech energy companies aim to enhance their supply security, optimize procurement processes, and collectively navigate the dynamic natural gas market for the benefit of both their operations and consumers.
Article by Prague Forum