Benefits of an Electricity Futures Market in Singapore May 2016
This report estimates the net financial benefits contestable consumers in Singapore should expect as a result of the commencement of trading in Singapore Electricity Futures in April 2015. We estimate the difference retail prices would have otherwise been if the futures contract had not been introduced. Account is taken of the cost of incentives for market makers to support liquidity in the futures market.
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. Based on primary research on the Australian and New Zealand wholesale markets we show that contestable consumers in Singapore could expect net consumer benefits in the order of $2.20/MWh
This report was commissioned by the Energy Market Authority of Singapore and published on the EMA website here.