• Journal of Korean Society of Transportation
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• v.25 no.5
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• pp.183-193
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• 2007

Traditionally, a congestion charge based on first-best congestion pricing theory, namely, the theory of marginal cost pricing theory, is equal to the difference between marginal social cost and marginal private cost. It is charged on each link so as to derive a user equilibrium flow pattern to a system optimal one. Based on this theory this paper investigates on the characteristics of first-best congestion pricing of multiple user class on road with variable demand, and presents two methods for analysis of social and spatial equity. For these purposes, we study on the characteristics of first-best congestion pricing derived from system optimal in time and in monetary unit, and analyze equity from this congestion pricing with an example network.

• Journal of the Korean Operations Research and Management Science Society
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• v.34 no.4
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• pp.123-138
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• 2009

This study examined the first- and second-best pricing by stable dynamics in congested transportation networks. Stable dynamics, suggested by Nesterov and de Palma (2003), is a new model which describes and provides a stable state of congestion in urban transportation networks. The first-best pricing in user equilibrium models introduces user-equilibrium in the system-equilibrium by tolling the difference between the marginal social cost and the marginal private cost on each link. Nevertheless, the second-best pricing, which levies the toll on some, but not all, links, is relevant from the practical point of view. In comparison with the user equilibrium model, the stable dynamic model provides a solution equivalent to system-equilibrium if it is focused on link flows. Therefore the toll interval on each link, which keeps up the system-equilibrium, is more meaningful than the first-best pricing. In addition, the second-best pricing in stable dynamic models is the same as the first-best pricing since the toll interval is separately given by each link. As an effect of congestion pricing in stable dynamic models, we can remove the inefficiency of the network with inefficient Braess links by levying a toll on the Braess link. We present a numerical example applied to the network with 6 nodes and 9 links, including 2 Braess links.

• The Transactions of The Korean Institute of Electrical Engineers
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• v.63 no.7
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• pp.889-895
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• 2014

Korea electric power industry had been under vertical monopoly but is typically getting restructured for free competition. An ideal pricing system under the competitive market system is 'unbundled pricing system' and 'marginal pricing system', but the current pricing system still adheres to the traditional bundled system and the average cost pricing system. Especially, progressive electricity rates for residential use reflect governmental policy-making which is focused on income redistribution & welfare, industrial supports and energy saving. This study proposes new and reasonable residential electricity pricing systems which are Time-Of-Use (TOU) and Real-Time Pricing (RTP) to reflect variations in the wholesale price of electricity. It also presents examples of various tariffs for residential electricity pricing systems.

• The Transactions of the Korean Institute of Electrical Engineers A
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• v.51 no.8
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• pp.379-384
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• 2002

In the competitive electricity market, various pricing methods are developed and practiced in many countries. Among these pricing methods, marginal loss factor(MLF) can be applied to reflect the marginal cost of network losses. For the calculation of MLF, power flow method has been used to calculate system loss deviation. However, this power flow method shows some shortcomings such as necessity of regional reference node, and absence of an ability to consider network constraints like line congestion, voltage limit, and generation output limit. The former defect might affects adversely to the equity of market participants and the latter might generate an inappropriate price signals to customers and generators. To overcome these defects, the utilization of optimal power flow(OPF) is suggested to get the system loss deviation in this paper. 30-bus system is used for the case study to compare the MLF results by the power flow and the OPF method for 24-hour dispatching and pricing, Generator payment and customer charge are compared with these two methods also. The results show that MLF by OPF reflects the power system condition more faithfully than that of by the conventional power flow method

• Proceedings of the KIEE Conference
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• 2001.07a
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• pp.509-511
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• 2001

In the competitive electricity market, various pricing methods are developed and practiced in many countries. Among these pricing methods, marginal loss factor(MLF) can be applied to reflect the marginal cost of network losses. For the calculation of MLF, power flow method has been used. However, it shows some shortcomings such as necessity of regional reference node, and absence of an ability to consider network constraints. The former defect might affect adversely to the equity of market participants and the latter might generate an inappropriate price signal. To overcome these defects, the utilization of optimal power flow(OPF) is suggested in this paper. 30-bus system is used for the case study to compare the MLF by the power flow and the OPF method for 24-hour dispatching and pricing.

• Journal of Energy Engineering
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• v.14 no.3 s.43
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• pp.167-172
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• 2005

This paper presents a methodology to support decision making for distribution system planning based on value. To evaluate the reliability value, we employ valued-based distribution reliability assessment. To evaluate the harmonics value, we employ a marginal pricing method, and by using reliability cost, harmonics cost, and construction cost, we can make the most economic decision. By applying the method to the real system, we show this method can get the best result which meet reliability and harmonics level.

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

• The Transactions of the Korean Institute of Electrical Engineers
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• v.43 no.2
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• pp.197-205
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• 1994

Security of a power system refers to its robustness relative to a set of imminent disturbances (contingencies) during operation. The socially optimal solution for the actuall level of generation/consumption has been well-known spot pricing at shot-run marginal cost. The main disadvantage of this approach arises because serious contingencies occur quite infrequently. Thus by establishing contractual obligations for contingency offering before an actual operation time through decision feedback we can obtain socially optimal level of system security. Under probabilistic precontract pricing the operating point is established at equal incremental cost of the expected short-run and collapse cost of each participant. Rates for power generation/consumption and for an offer to use during a contingency, as well as information on the probability distribution of contingency need for each participant, are derived so that individual optimization will lead to the socially optimal solution in which system security is optimized and the aggregate benefit is maxmized.

• The Transactions of The Korean Institute of Electrical Engineers
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• v.59 no.11
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• pp.1964-1970
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• 2010

A new intelligent power network (Smart Grid) that grafts some new technologies, such as the extension of the new and reproducible energy, electric motors, and electric storages, onto the regulation of green house gases according to the recent convention on climate changes has been actively promoted. As establishing such an intelligent power network, it is possible to implement a real-time rate system according to the change from the conventional single directional information transmission to the bidirectional information transmission. Such a real-time rate system can provide power during the chip rate hour by avoiding the high rate hour although customers use the same level of power through providing such real-time rate information including power generation costs. In this study, the establishment of an operating system that makes an effective use of the real-time rate system and its operation method are to be proposed.

• Journal of the Korean Institute of Gas
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• v.2 no.3
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• pp.18-24
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• 1998

This paper attempts to improve domestic natural gas pricing system, thereby optimizing social welfare. This is done by deriving theoretical frameworks of natural gas pricing, which make use of both Ramsey component pricing rule and Efficient component pricing rule based on the theory of marginal cost. Allocative efficiency and social welfare between gas prices derived from the three pricing mechanism, present Cost-based pricing, Ramsey component pricing rule and Efficient component pricing rule, are analysed and compared in the case study. For the city gas, allocative efficiency of Cost-based pricing is higher than that of Ramsey component pricing rule and Efficient component pricing rule. In contrast, for the natural gas consumed for power generation, allocative efficiency of Cost-based pricing is lower than the other two pricing systems. It also turns out that social welfare is improved by the prices driven from Ramsey component pricing rule and Efficient component pricing rule rather than present Cost-based pricing.