Assessing welfare impact of entry into power market

In Koo Cho, Hyunsook Kim

Research output: Contribution to journalArticlepeer-review

Abstract

This paper calculates the welfare impact of a new entrant based on the location of entry in the Korean electricity market. We use two different models. One is the optimal fuel mix model to estimate the effect of a new entry in the long run. The other is the variable cost minimization model to assess the contribution of an existing installed private generator in the short run. A specific private generator, which has a cost advantage, saves a substantial amount of system-wide variable costs. We show that the right location for a new entrant can save power generation costs significantly, even if a new entrant does not have a cost advantage.

Original languageEnglish (US)
Pages (from-to)1046-1054
Number of pages9
JournalEnergy Policy
Volume61
DOIs
StatePublished - Oct 2013

Keywords

  • Entry
  • Network constraint
  • Social welfare

ASJC Scopus subject areas

  • Energy(all)
  • Management, Monitoring, Policy and Law

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