FAQs on Electricity Futures Market & FSC
01 What are the Electricity Futures Market and FSC?
Electricity futures are a financial product that allow buyers and sellers to trade electricity into the future. In Singapore, electricity futures are listed on SGX in standard lot sizes and tenure.
FSC stands for Forward Sales Contract and is a scheme implemented by the EMA to facilitate liquidity in the futures market. “Market makers” who participate in the futures market are allocated FSC. The FSC is a Contract-For-Difference between the market makers and SP Services (the Market Support Services Licensee). EMA is currently studying the debit/credit settlement mechanism for the FSC.
02 What is the role of market makers?
Market makers are entities that put up both “buy” and “sell” prices within a pre-determined price spread. By doing so, they provide price signals and liquidity in the market. These entities bear risks for providing liquidity to the market. In the Singapore electricity futures market, the market makers are awarded FSCs to provide them with financial certainty in return for them bearing these risks.
01 How do I know when my company can start buying electricity from an electricity retailer?
Energy Market Authority (EMA) is liberalizing the retail electricity market in phases. Depending on your power consumption level, EMA will notify you through a letter about 1 month in advance from the date that you become 'contestable'. "Contestable" refers to those consumers who can buy electricity from any of the licensed electricity retailers and directly or indirectly from the wholesale electricity market when the market opens.
02 What should I do in the meantime?
to find out more how Senoko Energy Supply can assist you in making an informed decision, in preparation for the day you will become contestable.
03 What do I have to do if I am informed of my contestability?
You will have 60 days from the date on which you become contestable to decide among 3 choices:
- Buy electricity directly from the wholesale market as a wholesale market participant (for this, you will have to apply for a wholesale license from Energy Market Authority and satisfy certain financial, technical and operational requirements to register as a Market Participant with Energy Market Company.)
- Buy electricity indirectly from the wholesale market through SP Services Ltd
- Buy electricity from a licensed retailer like Senoko Energy Supply.
As options a. and b. will expose you to fluctuations in the wholesale market, you may wish to contact us to see how we at Senoko Energy Supply can assist you to mitigate the risks involved.
04 What happens if I do not take any action within the 60 days?
If you do not take any action, it is implicit that you will be buying electricity indirectly from the wholesale market through SP Services Ltd and you will be charged based on fluctuating wholesale market prices. However, you can still subsequently decide to buy from a retailer. Contact us
and find out how Senoko Energy Supply can assist you to work out the best energy procurement strategy that meets your specific needs.
05 What happens if I decide to choose a retailer?
Electricity retailers buy electricity in bulk from the wholesale market and sell it to consumers with different product and service offerings.
At Senoko Energy Supply, we believe that every customer is unique. Thus, we seek to understand your needs first before recommending the most appropriate energy proposal for you that best meet your organisation's objectives. Besides electricity, we also have a whole range of value-added services that will assist you in managing your energy usage more efficiently and bringing about more savings for you.