Overview of the Electricity Futures Market

With the deepening of China’s electricity market reform and the start of spot electricity market, the establishment of electricity futures market is of great significance. Firstly, this paper gives an overview of electricity futures trading from four aspects: trading characteristics, trading modes, futures contracts classification and contracts elements. Secondly, taking the United States, Nordic Europe and other countries and regions as examples, the development of futures trading in foreign electricity markets is introduced, including the development of futures market, the improvement measures of exchanges, the main types of contracts and the conversion between contracts. Then, the most important hedging function of electricity futures is introduced and exemplified. Finally, based on the experience of foreign countries and the current situation of China, some suggestions on the construction of electricity futures market are put forward.