(EnergyAsia, August 8 2012, Wednesday) — Singapore Exchange is expanding its portfolio of energy products and over-the-counter (OTC) clearing services with its purchase of a 49% stake in Energy Market Company Pte Ltd (EMC), the operator of the country’s wholesale electricity market. (US$1=S$1.25).
SGX has agreed to acquire the stake held by The Marketplace Co (M-Co) for as much as S$19.64 million, comprising an initial $S17.64 million and a further S$2 million over three years if certain conditions are met.
SGX, which already operates a clearing service for oil futures and coal OTC contracts, said the acquisition will position it to launch electricity and related derivatives.
It said the EMC will remain independent and continue to independently operate the National Electricity Market of Singapore (NEMS), Asia’s first liberalised market for the wholesale trade in electricity when it was set up in 2001 as a 51/49 joint venture between the Energy Market Authority and the M-Co.
EMC calculates electricity prices, schedules generation, clears and settles transactions in the NEMS which functions as an exchange for power plants and consumerss to buy and sell electricity.
Magnus Böcker, SGX’s CEO, said: “The stake in EMC affirms our commitment towards building a leading presence in the energy and commodities market. The demand for electricity and energy products will increase in line with Asia’s growth and this acquisition will position SGX to take advantage of these opportunities.”