The Japanese power market has consistently drawn attention from energy market participants, offering a compelling landscape shaped by various influential factors:
- Japan’s electricity production is the same as Germany and France combined, highlighting the market potential,
- Around 70% of Japan’s electricity is generated from imported coal and LNG, making Japan one of the world’s largest LNG importers
- Japan’s electricity demand is heavily influenced by weather, with distinct peaks in summer (cooling needs) and winter (heating demands),
- Japan’s power grid is divided into eastern and western regions operating on different frequencies (50 Hz in the east and 60 Hz in the west), connected by frequency converters with limited capacity
- Japan is the third largest liberalised power market in the world with 86 million customers eligible to switch suppliers
Cleared electricity derivatives in Japan were first introduced in 2019, and their volumes have grown exponentially, particularly over the past two years. By Q4 2024, the market averages over 60 trades per day with a daily volume exceeding 388,000 MWh. This remarkable growth positions Japan’s power derivatives market as comparable to Switzerland’s, underscoring its rapid development and increasing prominence.
Exchangers and Brokers in the Japan's Power Market
Currently, the majority of derivatives volume in Japan’s power market is cleared through EEX, while TOCOM holds a smaller market share. EEX plans to enhance its offerings by introducing screen trading and options in Q1 2025. TOCOM is preparing to launch JJ Link, a mechanism comparable to an Exchange for Physical (EFP). Additionally, CME and ICE also offer Japan power contracts, providing further opportunities for market participants.
As of Dec-24, there are 4 active Brokers in the market, Enechain, GFI, Tullett Prebon, and Vanir Global Markets. You can view and connect with all of these Japanese Power Brokers through Trayport.
Japanese power contracts (Tokyo and Kansai), along with the relevant coal (Newcastle) and gas contracts (JKM, TTF, and Henry Hub), are all available on Trayport, providing seamless access to key energy markets for Trayport clients.
To connect to the Japan power market:
- For current clients, contact your Trayport client manager and get your Joule screen connected to Japan power market.
- New to Trayport? request a demo.
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