1. Electricity & Regulatory Overview of Korea
Sep. 28, 2016
Ministry of Trade, Industry &Energy
Electricity Regulatory Commission

2. 1 2 3 Contents Electricity Industry Overview Power Market Regulation
The New Energy Industry 3

3. Electricity Industry Overview1

4. Korea Overview - Power Sector Characteristics
People served : 50 million
Isolated power grid
Highly dependent on foreign resources
% of primary energy in 2015 (270 million Toe)
Primary energy proportion (2014)
- Oil: 37.1%, Coal: 29.9%, LNG: 16.9%, Nuclear: 11.7%
Renewable & Hydro : 4.4%
As you may know, Korean power network is not interconnected with its neighboring countries.
Because Korea does not have any given natural resources, we must import most of fuels and depend 97% of primary energy on imported energy.
Nevertheless, we have seen very high growth rate of electricity demand so far and we still have 5~7% of annual growth in electricity demand.

5. Capacity by Fuel Type & Genco (2015)
Generating Capacity : 98,812MW
By Fuel Type
By Generation Companies
Unit : MW
Unit : MW
5 Gencos(KEPCO Subsidy)
47,498(53.8%)
Private
24,275(18.8%)
KHNP
27,039 (27.4%)
98,812
98,812
In the aspect of facilities capacity according to fuel source, there are coal of 33%, nuclear power of 25%, LNG of 27%, and oil and waterpower of about 7%.
6 subsidiary companies of Korean Electricity Power Corporation, KEPCO, takes up 87% of national facilities. Remaining facilities belong to IPP.
* IPP: Independent Power Producer
* As of DEC 2015

6. Retail Sectors & Transmission
Power Sales
Transmission Circuit Length
Unit : C-km
In the aspect of facilities capacity according to fuel source, there are coal of 33%, nuclear power of 25%, LNG of 27%, and oil and waterpower of about 7%.
6 subsidiary companies of Korean Electricity Power Corporation, KEPCO, takes up 87% of national facilities. Remaining facilities belong to IPP.
* IPP: Independent Power Producer
* As of DEC 2015

7. Electricity Market Structure
1,214 Total 9
(Above 30MVA)
CES: Community Energy System

8. Electricity Market Characteristics
Mandatory Pool (above 1MW Gen)
Cost-Based Pool (CBP)
Generator production levels and prices managed by KPX
on the basis of generation cost
The Generation Cost Evaluation Committee (GCEC) evaluates the generation cost
Day-Ahead Market
1-hour Trading Interval

9. Growth of Electricity Market
“2015 : Trade amount of 495 billion kWh, Trade volume of 38 billion US$”
Numbers of
Member Companies
Unit : No.
Trade Amount
Unit : billion kWh
Trade Volume
Unit : billion dollars
1,222 40
495 38
480
490 38
880
549
’13
’14
’15
’13
’14
’15
’13
’14
’15 9 9

10. Power Market Regulation2

11. Power Market Regulatory Structure
Market Surveillance Committee
Monitor Compliance Market Rule
MOTIE
Electricity Business Licenses
Final Approval of General Supply Provisions & Electricity Market Rules
Review Business Licenses
Review General Supply Provisions & Electricity Market Rules
Legal Dispute Mediation
KOREC

12. About Korean Electricity Regulatory Commission
Legal Status
- Korean Electricity Regulatory Commission, (KOREC), with the secretariat bureau, is formed within the Ministry of Trade, Industry & Energy
Mission
Licensing electricity companies
Protecting the rights & interests of consumers
Monitoring antitrust activities
Supervising the operation of electricity market and power system
Restructuring the electricity industry

13. About Electricity Market Surveillance Committee
Legal Status
Founded under KOREC
Providing technical support to KOREC
KPX is performing the practical roles of the EMSC secretariat
Mission
Monitoring compliance with the Market Rules
Making market surveillance plan yearly
Develop & operate market monitoring system

14. The New Energy Industry3

15. Policy for New Energy Industry
Policy Aim
• To respond to new climate change regime
• To find out solutions to help businesses join this initiative
• To accelerate investment by global companies to new renewable energy and ICT
New industry where anybody can generate energy with new renewables and ICT and sell the surplus electricity
New renewable energy, efficient coal-fired power generation
Industries with high efficiency of manufacturing process
New industry to promote not only EVs but also the broader ecosystem
Key Issues
Energy Prosumer
Low-carbon Power Generation
Environment-friendly Manufacturing Process
Electric Vehicles

16. Deregulations to Promote the New Energy Industry
Business Examples
Prosumer’s Direct Sale of Electricity
Small Generation Aggregators (SGAs) in the Market
Resale of Electricity by EV Charging Service Providers
Plan to Permit All ESS-based Businesses
※ For details, see the appendix.

17. Electricity business is growing and energy market is changing
Concluding Remarks
Electricity business is growing and energy market is changing
Market regulation is changing for the development of New Energy Industry

19. Appendix 1) Prosumer’s Direct Sale of Electricity
- Generation & sale
- Measurement of generated
volume
- Issuance of electricity bills
<Consumer A: Prosumer + KEPCO>
<Consumer B: Prosumer + KEPCO>
<Consumer C: KEPCO>
Electric power supply & billing
Payment of electricity bills
Measurement of consumption
Last resort

20. <Small-sized Electricity Trading>
Appendix
2) Small Generation Aggregators (SGAs) in the Market
<Small-sized Electricity Trading>
DER trading market
Wholesale electricity market
Prosumer
Distribution of electricity
KPX
SGA
Electricity & REC payment
PV (DER 1)
EV (DER 2)
ESS (DER 3)
PV (DER 4)
ESS (DER 5)
Trader A B
Electricity market
REC market
Trading market
Composition
Roles
• A market operated by KPX in order to collect DER
• DER (PV, ESS, and EVs) and SGAs
• Connection and management of DER and SGAs via the trading market (online portal)

21. Appendix ? ! 3) Resale of Electricity by EV Charging Service Providers
To-be !
Direct purchase available from KPX
Resale of the purchased electricity available
As-is ?
Electricity purchasable only from KEPCO
Lack in institutional basis of paid EV Charging service
EV Driver
Charging service provider
Direct sale allowed
Charging service provider
EV Driver

22. Total energy management Performance improvement
Appendix
4) Plan to Permit All ESS-based Businesses
Purchase of Electricity
Sale of Electricity
Electric power trading
Consumer
New renewables
Total energy management
Consulting
Quality assurance
After-sale service
Maintenance
Performance improvement
Leasing
ESS provider