전력수급계획과 발전설비투자시장의 효율성
Korea has suffered from a chronic shortage in the generation capacity since the restructuring of the electricity market in 2001. The distortion in the generation mix, under the current cost structures of various generator types estimated by the government, has also persisted and shows no sign of improvement. In addition, the demand forecast by the government has been consistently lower than the actual realized demand by large margins. These facts suggest that there could be significant barriers to entry into the generation stage of the electricity market in Korea.
This report analyzes the market for investment in new generators in Korea and the effects of relevant laws, regulations, and procedures that the government uses on the efficiency of the market. Main problems in the current system the report found are as follows:
∙Korea did not amend the laws relevant to the entry into the generation stage of the electricity market, which had been introduced during the vertically integrated SOE monopoly regime of the Old KEPCO, to make them compatible with competition in the generation stage.
∙Korea continued to use the Basic Plans for Demand and Supply of Electricity, which had been used before the restructuring under the vertically SOE monopoly.
∙Since the restructuring, there has been a big uncertainty about the precise nature of the Basic Plan, which allowed the government to interpret the nature in an arbitrary way.
∙Interpretation of the Basic Plan changed substantially in 2006, leading to the current heavy intervention of the government in the procedure that determined the investment of generation companies in new generators.
∙Since 2006, the government essentially fixed the total capacity and the generation mix to be built in future years and selected firms that would be allowed to build and operation new generators.
∙Since 2006, selection of investors has been done through beauty contests. The criteria used in selecting investors changed substantially in the last several years.
∙Very little information is known about the methodology the government uses in estimating future demand and the optimal capacity and generation mix. However, there are reasons to believe that a systematic bias in estimating demand has existed.
∙Current procedures used to determine investment in generators are likely to lead to inefficiency in investment. The Current Basic Plan, that essentially determines the total capacity and the generation mix, is likely to lead to a shortage in capacity and persistent distortions in generation mix. The beauty contest currently used by the government to select investors is also inconsistent with competition in the wholesale market.
This report proposes a set of measure that can induce a more effective competition in the market for investment in new generation capacity. It also suggests measures that would enhance transparency and credibility of the forecasting of future demand. The policy recommendations include:
∙Removal of the Basic Plan for Demand and Supply from the procedures relevant to licensing of the construction and operation of new generators.
∙Fundamental changes in relevant laws that would remove or substantially lower entry barriers into the generation stage of the electricity market and would make the licensing procedures of new generators compatible with competition in the wholesale market.
∙Changes in the capacity pricing rule that would give a correct signal to investors about the profitability of investment in new generators.
∙Measures that would give the government a stronger incentive to estimate future demand for electricity more accurately.
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