The European Energy Exchange (T3PA.DE) expects trading volumes of Japanese power derivatives to double this year and continue growing thereafter as its expanding client base seeks options to manage risks, a top executive told Reuters.
Derivatives volumes are expected to increase to 150-160 terawatt-hours (TWh) this year from 72 TWh in 2024, said Steffen Riediger, director for business development at EEX Asia’s power derivatives business.
“Retailers have become increasingly active, and then this kind of domestic activity nurtures also investments and activity from international players,” he said.
Half of EEX’s 105 clients in the Japanese derivatives market are international players, he said, adding that all 10 major Japanese generators were actively trading alongside a growing cohort of power retailers.
“Over time, these utility firms, the retailers in Japan, they also start hedging in the market, because they have to,” Riediger told Reuters in an interview this week.
Riediger said there was plenty of scope for growth in power derivatives trading as current volumes were still a fraction of physical demand, noting European markets typically trade two or three times the annual consumption.
AloJapan.com