*6.2. Conclusions*

Increasing market liquidity is an indispensable factor for introducing renewable energy. However, attempts to raise liquidity in economics can generally lead to speculative behavior. In this paper, we outline such problems with a simple model. Based on the results of the model's speculative behavior, we determined that, even if the consumer demand for electricity is inelastic with regard to the price, the price elasticity of the demand is newly born; in this way, price change becomes stable. However, the forward market creates speculative trading. Speculative trading naturally accompanies a decrease in consumer surplus. Policymakers, especially the Japanese government, have a strong tendency to vigorously construct speculative actions in the electricity market and strengthen regulations. However, this model shows that some regulation, in terms of optimistic prospects to the future electricity price, can increase consumers' surplus.

In addition, it has often been pointed out that, in the existing power market model, the market price is dominated by several corporations. In this situation, the market price can be easily raised by these corporations because of the special nature of electric power. However, in this model, the company is assumed to be a price-taker; this also shows that there are cases in which consumer surplus can increase. Thus, inviting new corporations is an important policy for the liberalization of the power market. Our main findings is that the speculative tradings can improve the inelasticity of the demand. This finding of our theory is the first one that points out this effect. This finding is also a very useful result when considering the market design of the electricity market. Speculative trading is an important factor in introducing the forward market to electricity. The results of this paper show that speculative trading has a positive externality and is likely to be a desirable policy in the electricity market.

Our model is based on JEPX. However, the basic elements are common to electricity markets in other countries, and can be applied as a more general electricity model. It would be necessary to comprehensively analyze the linkage between dynamic markets rather than individual markets. We propose a basic model as one of the attempts to describe these two types of markets.

**Author Contributions:** Methodology, J.M.; Formal Analysis, J.M.; Writing—Original Draft Preparation, J.M.; and Supervision, K.S.

**Funding:** This research was funded by JSPS KAKENHI Grant NO. 15K00645.

**Acknowledgments:** We are grateful to Izumi Inasawa, Hiroshi Kinokuni, and Ai Takeuchi for their helpful discussions and comments with regard to our model. All blame for any errors is attributed to us.

**Conflicts of Interest:** The authors declare no conflict of interest. *Energies* **2019**, *12*, 2946
