In a developing power market like Japan, future contracts are gaining traction as the need to hedge price volatility risk rises. Insight by Volue's forecasts aim to serve as impartial reference of the future delivery price, providing evidence of fundamental shifts in energy supply and demand dynamics, regulatory policies, and the appearance of new technologies.Therefore, two months after launching the Forward market product in Japan, Insight by Volue has extended its forecast to 5 year-ahead and additional features to account for critical market dynamics.

The future power market in Japan is experiencing remarkable growth, particularly evident in the surge in trading volumes on the European Energy Exchange (EEX), which accounts for 92% market share in Japan's futures market. Between 2022 and 2023, trading volumes in GWh have surged 2.7 times, and the volume in MW of open interests have doubled. By the end of 2023, EEX reported that seasonal contracts accounted for 43% of the total volume, representing a doubling from the previous year. This development was driven by the increased adoption of EEX power futures to hedge Fiscal Year 2024 (FY24) physical exposures.

Monthly contracts have emerged as the most liquid trading contracts, consistently setting new volume trading records. In the first quarter of 2024 alone, monthly trading volume reached an impressive 16.3 TWh, equivalent to 89% of the total trading volume for the entire year of 2023 (18.3 TWh).

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Volue ASA published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 07:45:04 UTC.