Japan kick-starts electricity futures trading

But it got off to a quiet start with low trading volume as crude oil prices shot upwards.

Electricity futures trading was launched on the Tokyo Commodity Exchange (TOCOM) and is expected to help new power companies stabilise management and thus facilitate competition in Japan's electricity market, an announcement revealed.

The East Area Peakload electricity contract for October delivery fetched the first price of JPY10.9 per kWh, lower than the standard price of JPY11 set by TOCOM in advance. The West Area October contract saw no deal as of noon (3 a.m. GMT).

According to Jiji Press, the futures market got off to a quiet start with low trading volume, at a time when crude oil prices are surging in the wake of Saturday's attacks on oil facilities in Saudi Arabia.

"We'll make efforts for the market's healthy development as a means of hedging price volatility risks," TOCOM president Takamichi Hamada said, noting that price volatility has been a factor weighing on power industry newcomers, many of which procure electricity from the wholesale market.