Electricity Futures Market

The Energy Market Authority (EMA), in partnership with the Singapore Exchange (SGX) and the electricity industry, launched the Electricity Futures Market in April 2015. This is part of EMA’s ongoing efforts to enhance market competition for the benefit of consumers. Based on the experiences of countries like Australia and New Zealand, an Electricity Futures Market leads to a more efficient and competitive wholesale and retail market with long-term benefits for consumers. These benefits include more competitive prices and greater retail choices. A study commissioned by EMA showed that based on the benefits realised by consumers in other jurisdictions, the equivalent net consumer benefits could amount to about $2.20/MWh (more information can be found in Sapere Research Group’s Report).

More information on electricity futures trading can be found on SGX's website

How can you or your company benefit from an Electricity Futures Market?

Competitive pricing

More independent electricity retailers (i.e. not linked to any power generation company) are entering the Singapore market. They are able to do so because the Electricity Futures Market helps them to hedge their risks. Their entry enhances market competition and keeps electricity retail prices competitive.

Food & beverage retailer Coastes shared that it has been able to shop around for competitive packages from independent electricity retailers. "We have benefited with lower energy costs. We're also in discussion with retailers like CPvT Energy to install organic photovoltaic solar films with storage batteries on our premises, for more efficient solar power generation".

In the Sep 2015 tender results (shown below) for the supply of electricity to Town Councils, 10 Town Councils were able to enjoy 22% discount off SP tariff - an additional 7.5% in savings compared to the most competitive quote from an existing generation company and retailer. This amounts to about $2.1 million savings a year, which will eventually benefit electricity consumers.



The benefits of more competitive prices are not only confined to electricity consumers who buy from independent retailers. Due to the competition from the entry of more players, existing generation companies and retailers are also offering greater discounts to customers. This is reflected in their more attractive bids in a subsequent Town Council tender in Nov 2015 (shown below). Hence the Electricity Futures Market brings about benefits to consumers across the board, and not just to those who participate directly in the Electricity Futures Market.


More retail options

The Electricity Futures Market has also enabled new business models to emerge, allowing retailers to offer customised retail packages according to consumers’ needs. There are now even retail packages that use clean energy sources such as solar. Examples of new retail offerings include:

  • Rooftop leasing plans: Businesses can lease out their rooftop space for the installation of solar panels.
  • Green tariffs: Pricing plans which allow consumers to choose the amount of green energy.

Restaurant-reservation booking company, Chope, shared how it has benefited from new retail plans offered by independent retailers: "We were motivated to make the switch as we were looking at ways to reduce our carbon footprint, and Sun Electric’s provision of sustainable energy that is both affordable and clean, made perfect sense.  Furthermore, we’re excited to be one of the first companies in Singapore to run on solar energy, and hope that more companies will take the leap and make the switch in the near future."

“Apple will be the first company (in Singapore) to rely entirely on solar energy.” Apple plugs into solar power in Singapore with Sunseap, Straits Times, 16 Nov 2015

Greater price transparency

Companies can use electricity futures prices available on the SGX website as a benchmark to assess if the prices offered by their retailers are competitive. For example, your company can use the futures price from Q3 2016 to Q3 2018 to evaluate a two-year tender for electricity supply called in Q2 2016.

“From blended power solutions to electricity futures and even a crowdsourcing exchange, Singapore is making huge stride.” Business Times 22 Jun 2015, New business models set to shake up solar energy sector.

Risk Management

EMA has developed a risk management tool in collaboration with Sapere Research Group and in consultation with electricity retailers. The objective is to provide retailers with an understanding of their financial resilience in adverse market conditions. More information can be found through the tool with its accompanying primer

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