JPX and JEPX cooperate in the electricity market Strengthen risk management through information exchange
Japan Electric Power Exchange Chairman Yoshitsugu Kanemoto (right) and Japan Exchange Group (JPX) CEO Akira Kiyota shaking hands (January 19, Chuo-ku, Tokyo)
Japan Exchange Group (JPX) and Japan Electric Power Exchange (JEPX) signed a memorandum of understanding (MOU) on the 19th with the aim of strengthening market functions and competitiveness of electricity. As electricity prices rise due to soaring prices of power generation fuel, JPX, which operates the futures market for electricity, and JEPX, which is responsible for the spot market, are working together to expand the number of market participants and strengthen risk management.
Specific details will be filled in later. Takashi Ishizaki, president of the Tokyo Commodity Exchange, which operates the electricity futures market under the umbrella of JPX, said, "First of all, we would like to strengthen risk management through information exchange and consider building a system that includes (more efficient) fund management." .
In North Europe and other overseas markets, there are examples where spot and futures are handled on the same exchange, and market participants can use the same deposit.
In electricity trading, 30-40% of total power generation is through the JEPX spot market, and JPX futures accounts for about 1%. Electricity futures on the Tokyo Commodity Exchange will be fully listed in April 2022, and the number of trading participants has increased from the initial 13 companies to about 160 companies. It is used by domestic electric power companies, overseas electric power traders and financial institutions.
Due to soaring wholesale electricity prices following the Ukrainian crisis, there are some cases of switching to market-linked contracts in which electricity rates fluctuate according to market prices. In order to avoid price fluctuation risk, the electricity futures market has seen an increase in inquiries from end-users such as manufacturers and data centers.
