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The new government is likely to break up state-run Korea Electric Power Corp.’s monopoly in the electricity sales market, according to news reports.
The transition committee is discussing ways to restructure the electricity market, which was one of the campaign pledges of President-elect Park Geun-hye, the reports said.
The direction for restructuring is to remove the inefficiency caused by the electricity monopoly of KEPCO and to stabilize the supply and demand of electricity.
The reform of the electricity market, which KEPCO has dominated from power generation to distribution to sales, has emerged as a major national agenda as Korea, the world’s 11th-largest energy consumer, has faced electricity shortages for the past few years.
For this, the transition team is considering the separation of KEPCO’s two business sectors of electricity transmission and distribution and electricity sales, and will allow third parties access to the electricity sales market.
Regarding the electricity generation market, KEPCO’s electricity generation unit was split into six subsidiaries in 2001, but it controls them without privatization.
Access to the electricity sales market will be opened only to private companies that spend big power to operate a production site. This means KEPCO maintains controllability over electricity prices for households, while prices of industrial electricity will change based on the market mechanism.
Stock market watchers projected a positive outlook for KEPCO shares, saying the reform plan in sales of electricity will help KEPCO solve the chronic deficit issue, which was caused by the government’s limit on the price of all types of electricity.
KEPCO’s labor union, however, issued a statement against the reform plan by the presidential transition committee on Monday, claiming that the competition in the sales of electricity could bring a hike in electricity prices and worsen the imbalance between electricity supply and demand.
By Seo Jee-yeon (jyseo@heraldcorp.com)
The transition committee is discussing ways to restructure the electricity market, which was one of the campaign pledges of President-elect Park Geun-hye, the reports said.
The direction for restructuring is to remove the inefficiency caused by the electricity monopoly of KEPCO and to stabilize the supply and demand of electricity.
The reform of the electricity market, which KEPCO has dominated from power generation to distribution to sales, has emerged as a major national agenda as Korea, the world’s 11th-largest energy consumer, has faced electricity shortages for the past few years.
For this, the transition team is considering the separation of KEPCO’s two business sectors of electricity transmission and distribution and electricity sales, and will allow third parties access to the electricity sales market.
Regarding the electricity generation market, KEPCO’s electricity generation unit was split into six subsidiaries in 2001, but it controls them without privatization.
Access to the electricity sales market will be opened only to private companies that spend big power to operate a production site. This means KEPCO maintains controllability over electricity prices for households, while prices of industrial electricity will change based on the market mechanism.
Stock market watchers projected a positive outlook for KEPCO shares, saying the reform plan in sales of electricity will help KEPCO solve the chronic deficit issue, which was caused by the government’s limit on the price of all types of electricity.
KEPCO’s labor union, however, issued a statement against the reform plan by the presidential transition committee on Monday, claiming that the competition in the sales of electricity could bring a hike in electricity prices and worsen the imbalance between electricity supply and demand.
By Seo Jee-yeon (jyseo@heraldcorp.com)
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Articles by Korea Herald
