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

This study develops a CGE model that disaggregates the electricity sector by load-generation technology pairs using the methodology of GTAP9 Power DB and analyze the impact of peak-load rate increase. The Power DB is updated with Korea electricity market data and used as model input data. Increase in peak-load rate reduces the output of the electricity sector and electricity-intensive manufacturing sectors. Although total electricity consumption is reduced by the rate increase, load shift from peak to base increases the share of coal and nuclear in generation portfolio. Sensitivity analysis on substitution elasticity between loads, a key parameter, shows that more flexible load shift to less cost base-load increases the total electricity consumption and the output in the manufacturing sector. In the meanwhile higher base-load demand utilizes more coal power generation which exacerbates the carbon mitigation effect of peak-load rate increase.