Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

In spite of regional closeness, energy cooperation including electric power sector in the Northeast Asia (NEA) region has remained unexplored. However, the recent cases of energy cooperaton and support in this region have an encouraging impact on the realization of NEA electric power interconnection. The main objective of this study analyzes the potential benefit of power system interties for the Far-East Russia-North Korea-South Korea route. For this purpose, we use a system dispatching simulation program (POWRSYM-PLUS) to calculate generation costs and unit costs by electricity transaction type for the period of 2002 to 2015. Assuming the purchase unit price of 1 Cent/kWh, we expect to reduce the production cost by about 7.2 billion dollars or 0.5 billion dollar per year, which amounts to the 6.6% cost reduction compared to the case of no transaction. This translates to the internal rate of return of 26% and the payback period of 1.1 year, respectively.