• Proceedings of the KIEE Conference
• /
• summer
• /
• pp.701-703
• /
• 2004

Although the electricity market structure worldwide may be different in kinds, there generally exists long-term forward market and short-term spot market. Particularly, the bilateral contract in long-term forward market fixes the price between a genco and a customer so that the customer can avoid risks due to price-spike in spot market. The genco also can make an efficient risk-hedge strategy through this bilateral contract. In this paper, we propose a new mechanism for evaluating the optimal bilateral contract price using game theory. This mechanism makes a customer reveal his/her own willingness to purchase electricity so that a fair bilateral contract price can be derived.

• Proceedings of the KIEE Conference
• /
• 2004.11b
• /
• pp.97-100
• /
• 2004

As the circumstance of the traditional system is changed according to power system deregulation, the simulation tool which should reflect market code providing market operating mechanism is needed to analyze an electricity market. This paper presents the development of Electricity Market Price Simulator for short term(EMPS) that is designed to imitate the Korean electricity market. The EMPS is developed in VB.NET and is composed if three functions that consist of calculating SMP for CBP market, MCP for TWBF market and LMP for LMP-market. To evidence the features and the performance of EMPS, a small two way bidding market with 12-bus system, one way bidding market for generator competition and LMP market with 5-bus system will be presented for the electricity market simulations using EMPS.

• Environmental and Resource Economics Review
• /
• v.29 no.4
• /
• pp.499-520
• /
• 2020

Input ratio of electricity to other production inputs in the Korean manufacturing sector has been higher than for the other OECD countries. In addition, electricity prices in Korea has been relatively lower than the average of OECD countries. Moreover, electricity sector is responsible for most CO2 emissions in Korea as coal and natural gas account 41.9% and 26.8% of electricity production as of 2018. Therefore, it looks inevitable to raise the electricity tariff for the manufacturing sector in Korea, but there is a concern that increase in the electricity tariff might affect small and medium enterprises (SMEs) more than large firms. This study estimates electricity demand's price and output elasticities for large firms and SMEs in steel industry by employing a time varying parameter model (Kalman filter). The analysis shows that changes in output levels regardless of firms' size affect electricity demands more significantly than do changes in electricity prices. Second, large firms have higher variances for both price and output elasticities of electricity demand. Third, large firms have higher price elasticity but lower output elasticity of electricity demand relative to SMEs. Policy implications are suggested in association with how to reduce electricity demands in the energy-intensive industry.

• The Transactions of the Korean Institute of Electrical Engineers A
• /
• v.55 no.8
• /
• pp.341-350
• /
• 2006

This paper presents a new methodology to draw the components of locational marginal price (LMP) in electricity market. Recently, the changing environments surrounding electricity industries resulted in the unbundled services provided by electricity market players, which may require the new pricing mechanisms based on the LMP. The changed pricing mechanisms will provide the price signals of time and location to the market participants. Most of the existing studies of LMP are based on the Lagrangian multipliers as shadow prices to evaluate the equivalent values of constraints or factors for security, reliability and quality. However, the shadow prices cannot provide enough information for components of LMP. In this paper, therefore, we proposed a new approach that LMP is divided into three components. To do this, we first present the method for shadow prices calculation and then break down LMP into a variety of parts corresponding to the concerned factors. The proposed approach is applied to 5-bus and modified IEEE 14-bus sample system in order to verify its validity.

• Environmental and Resource Economics Review
• /
• v.25 no.3
• /
• pp.449-470
• /
• 2016

This paper analyzes the effects of nuclear power generation on industrial growth in using the data of 22 manufacturing sectors in 14 nuclear power countries. The hypothesis that the change in the proportion of nuclear power generation in total electricity generation affects industrial value-added and industrial output through industrial electricity price reduction was tested using the dynamic panel data model. First, it was estimated that the increase in nuclear power generation by a 1% leads to a 0.8% reduction in electricity price. The results indicate that when nuclear power generation increased by a 1% point, industrial value-added and output increased by 0.16% and 0.23%,respectively, in the short-run and by 0.51% and 0.85%, respectively, in the long-run. It was also inferred that the effect of nuclear generation on industrial competitiveness working through electricity price reduction rely on institutional settings in the electricity markets. That is, the competitive effect is greater in the countries such as U.K and Japan where electricity price is high and price volatility is large. Meanwhile, in Germany which has pursued phasing out nuclear power, industrial competitiveness is promoted through stable electricity supply.

• Journal of Energy Engineering
• /
• v.22 no.2
• /
• pp.141-147
• /
• 2013

Electricity is a basis for human existence. This paper attempts to analyze the households' willingness to pay (WTP) for the residential electricity use. The WTP for the residential electricity use can be defined as the sum of actual price of and additional WTP for it. The former is easily observed in the market, but the second is not observed and thus should be obtained through a WTP survey of households. To this end, this study conducted a survey of randomly selected 1,000 households in Korea in November 2010. The results indicate that the mean additional WTP for the residential electricity use was estimated to be KRW 11.24 per kWh. Given that the average price of residential electricity was KRW 98.07 per kWh at the time of the survey, the economic benefit from the residential electricity use was computed as KRW 109.31 per kWh. This information can be compared with the cost involved in the supply of one kWh of residential electricity.

• KIEE International Transactions on Power Engineering
• /
• v.5A no.4
• /
• pp.416-424
• /
• 2005

At present, the Korean electricity industry is undergoing restructuring and the Cost Based-generation Pool (CBP) market is being operated in preparation of a Two Way Bidding Pool (TWBP) market. In deregulated electricity industries, an integrated power market simulator is one of the tools that can be used by market participants and market operators analyzing market behaviors and studying market structures and market codes. In this regard, it is very important to develop an electricity market simulator that reflects market code providing a market operation mechanism. This paper presents the development of an integrated market simulator, called the Power Exchange Simulator (PEXSIM), which is designed to imitate the Korean electricity market considering the various features of the market operating mechanism such as uniform price and constrained on/off payment. The PEXSIM is developed in VB.NET and composed of five modules whose titles are M-SIM, P-SIM, O-SIM, T-SIM and G-SIM interfacing the Access database program. To verify the features and the performance of the PEXSIM, a small Two Way bidding market with a 12-bus system and a One Way bidding market for generator competition will be presented for the electricity market simulations using PEXSIM.

• Environmental and Resource Economics Review
• /
• v.24 no.4
• /
• pp.629-655
• /
• 2015

Nuclear power generation is a major power source which accounts for more than 30% of domestic electricity generation. Electricity market needs to secure stability of base load. This study aimed at analyzing relationships between nuclear power generation and wholesale electricity price (SMP: System Marginal Price) in Korea. For this we conducted ARDL(Autoregressive Distributed Lag) approach and Granger causality test. We found that in terms of total effects nuclear power supply had a positive relationship with SMP while nuclear capacity had a negative relationship with SMP. There is a unidirectional Granger causality from nuclear power supply to SMP while the reverse was not. Nuclear power is closely related to SMP and provides useful information for decision making.

• Proceedings of the KIEE Conference
• /
• 2005.07a
• /
• pp.772-774
• /
• 2005

Interstate electric power system, as an alternative for energy cooperation under regional economic bloc, has been hotly debated before progressing the restructure in electric power industry and rapidly expanded in many regions after 1990s. Especially, since northeast asia has strong supplementation in resource, load shape, fuel mix etc., electric power system interconnection in this region may bring considerable economic benefits. Moreover, since Korean electric power system has a great difficulty in a geographical condition to interrupt electricity transaction with other countries, it has been expanded as an independent system to supply all demand domestically. As a result, Korean electric power system makes considerable payment for maintaining system security and reliability and expands costly facilities to supply a temporary summer peak demand. Under this inefficiency, if there are electricity transactions with Russia via the North Korea route then economic electric power system operation may be achieved using seasonal and hourly differences in electricity price and/or load pattern among these countries. In this paper, we estimate price cap of transacted electricity via interstate electric power system in northeast asia. For this study, we perform quantitative economic analysis on various system interconnection scenarios.

• Environmental and Resource Economics Review
• /
• v.31 no.4
• /
• pp.909-930
• /
• 2022

Although the electricity tariff for each customer class in Korea has an institutional basis which can be linked to cost fluctuations caused by the increase in fuel cost, there is a situation in which it cannot be raised in a timely manner, considering the national economic burden such as inflation. There can be some disagreements about unconditionally raising electricity rates when cost increases occur. It is, however, well known that Korean domestic electricity rates are very low around the world and are in an environment in which rates are not easily adjusted. Moreover, as Korean electricity rates cannot be easily raised due to various factors, domestic electricity rates for each customer class itself have not delivered a desirable price signal for power consumption. Based on historical data such as fuel costs and power production by power source from 2017 to 2020, this study estimated how much power consumption would change if electricity rates were adjusted in 2030 and price signal distortion was resolved. As a result of the estimation, power consumption will be reduced by 9,000 GWh if the current electricity bill is adjusted to a level which can be 100% recovered even with the supply cost alone. This led to a reduction of about 3.82 million CO₂tons of greenhouse gas emissions in the Korean power sector.