Overview of TOCOM Electricity Market...delivery – Retailers bill customers. (similar to ERCOT)...

Copyright 2019 Tokyo Commodity Exchange, Inc. All rights reserved.

Overview of TOCOM Electricity Market

September 2019


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Source: “Key World Energy Statistics 2017”, IEA

Japan is the world’s fourth-largest power consumer with electricity sales of JPY 14.5

Trillion（USD 130 Billion）in FY2017. Japan is the world’s largest liberalized electricity

market under a single regulator.

Source: “Japan’s Energy White Paper 2017”, METI

Electricity Market in Japan

Japan


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Great East Japan Earthquake

2019 1995 2000 2003 2008 2004, 2005 2015 2016 2020 2011 2013

Electricity market liberalization began in 1995 for high voltage customers. The retail market opened to

competition on April 1st, 2016 for all customers. Utilities were separated into “Generation”, “T&D”, and

“Retail” business units.

Utility generator must supply the wholesale markets and compete. Utility T&D is for grid management and

delivery – Retailers bill customers. (similar to ERCOT)

Opening of wholesale market to Independent Power Producers (IPPs)

Liberalization of electricity retail

supply for extra-high voltage users

Establishment of wholesale power exchange (JEPX)

Liberalize electricity retail supply for

high voltage users

The hour ahead market launched

at JEPX

Electricity Market Reform

Establishment of OCCTO

(ISO)

Liberalization of retail supply for low voltage users “Full Liberalization”

Establishment of Market Surveillance

Commission (EMSC)

Utility Reform Implementation

Completed

Transitional Period of Regulated Retail Tariffs

Electricity Business Act Laws Passed by Diet

The liberalization

Launch of TOCOM

Electricity Futures Market

Trading volume on JEPX (Japan Electric Power Exchange) has increased significantly since the market was full

deregulated. JEPX trading volume now accounts for 30% of the total electricity demand and is expected to

double. JEPX is supplying 72% of electricity retailer demand.

Price fluctuation hedging needs at JEPX has increased. Supported by Japanese government policy, TOCOM

will launch Electricity Futures, which are based on JEPX prices, on September 17th, 2019.

Sep 17th


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East Area

Base Load

West Area

Base Load

East Area

Peak Load

West Area

Peak Load

Type of Trading Cash Settled Monthly Futures Contract

Underlying

Average Price of JEPX Spot

Market(Day-Ahead) for the

Tokyo area Base Load price

(0:00~24:00)



Kansai area Base Load price

(0:00~24:00)



Tokyo area Peak Load price

(8:00~20:00)



Kansai area Peak Load price

(8:00~20:00)

Contract Unit

Contract base size :

100KWh

Calendar days in month ×

24 hours × 100KWh

e.g. Nov 2019 contract =

72,000KWh = 30 x 24 x 100

Calendar days in month ×

24 hours × 100KWh


72,000KWh = 30 x 24 x 100

Weekdays in month (*) x

12 hours × 100KWh


24,000KWh = 20 x 12 x 100

Weekdays in month (*) x

12 hours × 100KWh


24,000KWh = 20 x 12 x 100

Price Increment JPY 0.01 per KWh

Final Settlement

Price

JEPX Spot Market (Day

Ahead) Tokyo Area Base

Load monthly average price

JEPX Spot Market (Day

Ahead) Kansai Area Base

Load monthly average price

JEPX Spot Market (Day Ahead)

Tokyo Area Peak Load

monthly average price

JEPX Spot Market (Day Ahead)

Kansai Area Peak Load

monthly average price

Contracts Listed Nearest 15 Months

Last Trading Day The business day prior to the

last day of the month

The business day prior to

the last day of the month

The business day prior to the

last weekday of each month

The business day prior to the

last weekday of each month

First Trading Day Business day following the last trading day

Final Settlement

Day First business day of the following month

TOCOM Electricity Futures Market - Contract Specifications -

(*) Weekday = business day prescribed in Article 7 of Market Rules exclude the day separately specified by the Exchange.

(In principle, “Weekdays” = “Business days” – “deemed holidays specified by the Exchange” )


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East Area

Base Load

West Area

Base Load

East Area

Peak Load

West Area

Peak Load

Trading Hours Day Session: 8:45 to 15:15

Night Session: 16:30 to 19:00

Margin Calculated based on SPAN margin

Position Limit

(Members) *

In Net per each contract month

10,000 lots

(around 744,000MWh for the

month with 31 days)

10,000 lots


month with 31 days)

14,000 lots


month with 20 weekdays)

14,000 lots



Position Limit

(Customers) *

In Net per each contract month

5,000 lots


month with 31 days)

5,000 lots


month with 31 days)

7,000 lots



7,000 lots



SCO orders

Inter-commodity Spread Orders between the same contract

months base load

in East area and West area will be available

(SCO Price = East – West)

Inter-commodity Spread Orders between the same contract

months of peak load

in East area and West area will be available

(SCO Price = East – West)

* Electricity Utility Companies may exceed position limits with hedge that have been approved by the Exchange.

TOCOM Electricity Futures Market - Contract Specifications -


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East Area / West Area Base Load Electricity

Contract Month First Trading Day Last Trading Day Final Settlement Day Contract Unit No. of days

Sep 2019 Sep 17, 2019 Sep 27, 2019 Oct 1, 2019 72,000 30

Oct 2019 Sep 17, 2019 Oct 30, 2019 Nov 1, 2019 74,400 31

Nov 2019 Sep 17, 2019 Nov 29, 2019 Dec 2, 2019 72,000 30

Dec 2019 Sep 17, 2019 Dec 30, 2019 Jan 6, 2020 74,400 31

Jan 2020 Sep 17, 2019 Jan 30, 2020 Feb 3, 2020 74,400 31

Feb 2020 Sep 17, 2019 Feb 28, 2020 Mar 2, 2020 69,600 29

Mar 2020 Sep 17, 2019 Mar 30, 2020 Apr 1, 2020 74,400 31

Apr 2020 Sep 17, 2019 Apr 28, 2020 May 1, 2020 72,000 30

May 2020 Sep 17, 2019 May 29, 2020 Jun 1, 2020 74,400 31

Jun 2020 Sep 17, 2019 Jun 29, 2020 Jul 1, 2020 72,000 30

Jul 2020 Sep 17, 2019 Jul 30, 2020 Aug 3, 2020 74,400 31

Aug 2020 Sep 17, 2019 Aug 28, 2020 Sep 1, 2020 74,400 31

Sep 2020 Sep 17, 2019 Sep 29, 2020 Oct 1, 2020 72,000 30

Oct 2020 Sep 17, 2019 Oct 30, 2020 Nov 2, 2020 74,400 31

Nov 2020 Sep 17, 2019 Nov 27, 2020 Dec 1, 2020 72,000 30

Dec 2020 Sep 30, 2019 Dec 30, 2020 Jan 4, 2021 74,400 31

Jan 2021 Oct 31, 2019 Jan 29, 2021 Feb 1, 2021 74,400 31

Feb 2021 Dec 2, 2019 Feb 26, 2021 Mar 1, 2021 67,200 28

Mar 2021 Jan 6, 2020 Mar 30, 2021 Apr 1, 2021 74,400 31

TOCOM Electricity Futures Market - Contract Month -


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East Area / West Area Peak Load Electricity

Contract Month First Trading Day Last Trading Day Final Settlement

Day Contract Unit

No. of

Weekdays

Deemed

Holidays

Sep 2019 Sep 17, 2019 Sep 27, 2019 Oct 1, 2019 22,800 19

Oct 2019 Sep 17, 2019 Oct 30, 2019 Nov 1, 2019 26,400 22 (*)

Nov 2019 Sep 17, 2019 Nov 28, 2019 Dec 2, 2019 24,000 20

Dec 2019 Sep 17, 2019 Dec 26, 2019 Jan 6, 2020 24,000 20 Dec.30,31

Jan 2020 Sep 17, 2019 Jan 30, 2020 Feb 3, 2020 22,800 19 Jan.2,3

Feb 2020 Sep 17, 2019 Feb 27, 2020 Mar 2, 2020 21,600 18

Mar 2020 Sep 17, 2019 Mar 30, 2020 Apr 1, 2020 25,200 21

Apr 2020 Sep 17, 2019 Apr 27, 2020 May 1, 2020 24,000 20 Apr.30

May 2020 Sep 17, 2019 May 28, 2020 Jun 1, 2020 20,400 17 May 1

Jun 2020 Sep 17, 2019 Jun 29, 2020 Jul 1, 2020 26,400 22

Jul 2020 Sep 17, 2019 Jul 30, 2020 Aug 3, 2020 25,200 21

Aug 2020 Sep 17, 2019 Aug 28, 2020 Sep 1, 2020 24,000 20

Sep 2020 Sep 17, 2019 Sep 29, 2020 Oct 1, 2020 24,000 20

Oct 2020 Sep 17, 2019 Oct 29, 2020 Nov 2, 2020 26,400 22

Nov 2020 Sep 17, 2019 Nov 27, 2020 Dec 1, 2020 22,800 19

Dec 2020 Sep 30, 2019 Dec 28, 2020 Jan 4, 2021 25,200 21 Dec.30,31

Jan 2021 Oct 31, 2019 Jan 28, 2021 Feb 1, 2021 22,800 19

Feb 2021 Nov 29, 2019 Feb 25, 2021 Mar 1, 2021 21,600 18

Mar 2021 Dec 27, 2019 Mar 30, 2021 Apr 1, 2021 27,600 23

（*）Oct 22nd 2019 is a national holiday in Japan, but counted as a weekday in the contract.

TOCOM Electricity Futures Market - Contract Month -


8 Energy Market Broker Members & JCCH Clearing Members

TOCOM Energy Market Broker Members

JCCH Energy Market Clearing Members

Energy Electricity

Okachi & Co., Ltd. ○ ○ 〇

Okato Shoji Co., Ltd. ○ ○

Okayasu Shoji Co., Ltd. ○ ○ 〇

Credit Suisse Securities (Japan) Limited ○ ○

COMTEX Ltd. ○ ○ 〇

Sunward Trading Co., Ltd. ○ ○ 〇

DAIICHI COMMODITIES CO., LTD. ○ ○

NISSAN SECURITIES CO., LTD. ○ ○ 〇

Societe Generale Securities Japan Limited ○ ○ TBD

Phillip Securities Japan, Ltd. ○ ○ 〇

Fujitomi Co., Ltd. ○ ○

Hoxshin Bussan Co., Ltd. ○ ○

Rakuten Securities, Inc. ○ ○

Yutaka Shoji Co., Ltd. ○ ○ 〇

* SBI Futures is also considering entering brokerage business in TOCOM electricity market.


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TOCOM Broker Members listed below provide brokerage services to the customers outside of Japan.

Credit Suisse Securities (Japan) Limited

GCP Part 30 Nissan Securities Co., Ltd.

Okachi & Co., Ltd.

Part 30 Okato Shoji Co., Ltd.

GCP Phillip Securities Japan, Ltd.

Part 30 Societe Generale Securities Japan Limited

Yutaka Shoji Co., Ltd. “GCP”: General Clearing Participant, those who may accept and clear

trades on their own behalf, on behalf of their customers and non-clearing participants.

“Part 30”: Firms received Part 30.10 exemption from CFTC in USA.

Access to TOCOM Markets

Access from Overseas

Overseas Omnibus

Broker

TOCOM JCCH

General Clearing Participant

Broker Member

Remote Trade Member / Remote Broker Member

Overseas Customer / Associate Member

TOCOM Broker Members offering services to overseas customers

Registered ISVs

FIS

ION Trading Japan

Nihon Techno Systems Ltd.

TRAdE WORKS CO., LTD.

Trading Technologies Japan

Fractal Systems Inc.

Success Consulting Co., Ltd.

SOLEKIA Limited

CQG International Ltd.

Trade Systems Co., Ltd.

INTEC Inc.

Fidessa group plc

Bloomberg Trading Services Japan

Flex Trade Systems Pte Ltd.

CyberQuote Japan Ltd.

INTERTRADE Co., Ltd.

Simplex Inc.

Atplatform Technology

Codeli Technologies, Inc.


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For more information, please visit our website at www.tocom.or.jp

Market Data

www.tocom.or.jp/souba/all/index.html

TOCOM Historical Data

www.tocom.or.jp/historical/download.html

Trading Guide

www.tocom.or.jp/guide/index.html

JEPX Spot Market Overview

http://jepx.org/english/index.html

Contact Information

Visit TOCOM Building in Tokyo at:

1-10-7, Nihonbashi Horidomecho, Chuo-ku, Tokyo, Japan

http://www.tocom.or.jp/guide/index.html









Disclaimer:

No part of this publication may be redistributed or reproduced in any form or by any means or used to make any derivative work (such as translation,

transformation, or adaptation) without written permission from TOCOM. TOCOM shall not be liable (except to the extent required by law) for the use of the

information contained herein however arising in any circumstances connected with actual trading or otherwise.

Neither TOCOM, nor its servants nor agents, is responsible for any errors or omissions contained in this publication. This publication is for information only and

does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. All information,

descriptions, examples and calculations contained in this publication are for guidance purposes only, and should not be treated as definitive. Those wishing either

to trade in any products available at TOCOM or to offer and sell them to others should consider both their legal and regulatory position in the relevant

jurisdiction and the risks associated with such products before doing so.

Overview of TOCOM Electricity Market...delivery – Retailers bill customers. (similar to ERCOT)...

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