The Singapore Exchange (SGX) said on Monday that it has been preparing for the launch of Asia's first electricity futures market by the end of 2014.

"SGX is working closely with the EMA (Energy Market Authority), Energy Market Company (EMC) and market participants to design the futures products," it said in a statement, adding that the launch is still subject to regulatory approval.

The progress was also announced by S Iswaran, minister in the Prime Minister's Office and second minister for home affairs and second minister for trade and industry, at the Singapore International Energy Week on Monday.

The Energy Market Authority held a public consultation last year on the development of an electricity futures market in Singapore. It issued a request-for-interest paper in May this year, setting out the proposed design of the futures market. Six companies showed their interest.

The minister said that the commercial discussions are in progress for the development of the futures market, and that an industry workgroup is in the process of developing the design of the electricity futures contracts.

"We hope that the electricity futures market will be launched some time in the second half of 2014," he said.

SGX is working with the industry to launch a trial run next year so as to allow generation companies to build up competencies and experience in trading and market making.

Iswaran said Singapore is considering the introduction of electricity futures market to complement the spot market.

"A futures market will help large electricity consumers to better manage price volatility by allowing them to secure longer- term prices," he said, adding that it will also spur retail competition to the benefit of end-consumers.