How to make the EU Energy Platform into an effective emergency tool

Abstract

Abstract Uncertainty regarding the supply of Russian natural gas is causing European gas and electricity prices to become extremely high and volatile. Coordination is essential to ensure that disruptions during difficult winter months do not lead to a break-up of the EU internal gas market with potentially serious political repercussions. One part of the EU response is the establishment of an EU Energy Platform for the purchase of gas, LNG and hydrogen. The platform can be developed into an effective emergency tool – if Member States buy gas jointly they will find it much easier to let markets allocate scarce volumes across borders in case of a full supply disruption from Russia. We detail two complementary proposals to achieve this. First, there should be EU-wide auctioning of a remuneration for filling storage sites in specific regions. Secondly, EU demand for additional LNG quantities, and the sourcing of this on international markets, should be coordinated through a platform – this creates a transparent market for said volumes.