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[News] Electricity Market Reorganized in All directions…Differential rates by region for both wholesale and retail are discussed

An all-round reorganization of the electricity market is underway. As regional differential rate plans are discussed in both wholesale and retail markets for electricity, the market shape that has been around for more than 20 years is expected to change significantly.

According to a Yonhap news report on the 16th, the Ministry of Trade, Industry and Energy has ordered related services to comprehensively review regional differential electricity rates.

This is expected to lay the foundation for differentiating and applying electricity rates between the metropolitan area, where electricity use is high but electricity independence is relatively low, and areas where electricity use is low but power generation facilities are concentrated.

In the meantime, there have been many criticisms that electricity rates are unified regardless of region, which is causing great damage to local residents. Most of the power generation facilities were concentrated in the provinces, but on the contrary, the demand for electricity is the highest in the metropolitan area.

In this regard, the Special Act on Distributed Energy Revitalization passed the National Assembly in May last year, and Article 45 stipulated that electricity sellers could set different electricity rates in consideration of transmission and distribution costs for balanced national development, laying the foundation for solving this problem.

This is not just limited to the retail electricity bill market.

Since last year, the power authorities have been discussing the regional wholesale electricity price differential rate system (LMP) in earnest, while planning to introduce the system as early as this year.

The power authorities plan to differentiate the wholesale electricity price purchased by KEPCO based on the location of the power plant and system conditions through LMP.

 

Source: Electric newspaper (https://www.electimes.com )

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