(EnergyAsia, October 7 2014, Tuesday) — Singapore Exchange (SGX) is on course to offer electricity and energy futures trading after paying S$23 million to complete the takeover of the remaining 51% stake in the nation’s electricity market operator. (US$1=S$1.27).

SGX, which bought a 49% in Energy Market Co (EMC) in August 2012, had announced its plan to implement energy futures trading in the second half of 2014 to help consumers and producers hedge their power and natural gas costs.

The acquisition will allow EMC, previously owned by the Energy Market Authority (EMA), to leverage SGX’s expertise and operational synergies to better serve market participants at more competitive rates, said the exchange.

“For a start, wholesale electricity market participants will benefit from two percent savings in market fees over the next three years,” said SGX.

SGX, a leading operator of securities, commodities and derivatives markets, said it will develop and integrate EMC’s platform for an electricity futures market and related power and gas products for Singapore.

“Asia’s continued growth and rising consumption translate to strong power and gas demand,” said Magnus Böcker, SGX’s CEO.

“SGX is already a hub for the trading and risk management of commodities and financial derivatives. Together with EMC, we intend to become Asia’s price discovery centre for power and gas.”

In 2013, SGX said it was working with six of the country’s main power-generation companies, YTL PowerSeraya Pte Ltd, Senoko Energy Pte Ltd, Tuas Power Generation Pte Ltd, Sembcorp Cogen Pte Ltd, Keppel Merlimau Cogen Pte Ltd and Tuaspring Pte Ltd to jointly develop Asia’s first electricity futures market that the EMA had proposed in 2006.

SGX has also been working with EMC to design electricity derivatives products that must clear regulatory approval.