Kim Young-san, a Professor from the Division of Economics and Finance, Presents "Proposal and Challenges for Normalization of Electricity Charges"
Suggested "Implementation of 'fuel cost linkage system' that reflect the change in annual cost of electricity"
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On August 24, Professor Kim Young-san, from the Division of Economics and Finance of Hanyang University, participated in the "Proposal and Challeges for Normalization of Electricity Charges" debate hosted by the Energy Conversion Forum at the Korea Press Center. Currently, academic circles, civic groups, and industry officials have been discussing the reorganization of KEPCO's electricity rate system.
Professor Kim Young-san, who was the presenter of the day, introduced △the role of the retail sales department △the cost structure and design principles of electricity rates △the current method and process of determining electricity rates such as: Korea Electric Power Co., the Ministry of Commerce, Industry and Energy, and the Ministry of Strategy and Finance △and the cost recovery rate of 98% on average, 100% monopoly. Together he introduced the problems and limitations of the current electricity rate system and its operation.
Professor Kim evaluated the current electricity rate system by saying, "it is too rigid to reflect changes in costs in a timely manner." He added, "This limits consumers' choice, and the development of various products are also low."
In addition, he suggested that the problems of the existing system should be solved by △introducing a fuel cost linkage system that automatically reflects fluctuations in anthracite, natural gas, and oil prices in electricity rates periodically and by △including emission rights costs as fuel costs in the fuel cost linkage system. As an explanation, he mentioned that KEPCO's environmental cost reflection plan should include emission rights in fuel costs, but the RPS (new renewable energy supply obligation system) and the FIT (power generation difference support system) should be separated as independent accounting instead of the KEPCO's electricity purchase cost.
Professor Kim also pointed out, "Electricity is more likely to differ in terms of characteristics and technology than before, but it does not differ because of institutional and economic reasons" and introduced "examples of innovation and Opening in the EU, Japan's Retail Sector."
On this day, academia, civic groups, and industry officials, including Kim Young-san, a professor at Hanyang University's Graduate School of Economics, Yoon Soon-jin, a professor at Seoul National University's Graduate School of Environmental Studies, Lee Yoo-soo, a senior researcher at the Korea Institute of Energy Economics, Seok Kwang-hoon, an expert at GreenKorea, Kim Sun-kyo, an associate researcher at the Korea Institute of Science and Technology Evaluation, Lee Si-young, a professor at Korea University of Industrial Technology, Park Won-ju, the secretary general of the private development association, Lee Suh-hye, the E-consumer research director were all participants in this Energy Conversion Forum.
Global News Team
Translation by: Lee Hee-jin
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