『Abstract
The Korean electricity industry saw significant changes following
the reform in April 2001. Until the last decade, the industry
was monopolized by the Korea Electric Power Corporation (KEPCO),
a state-owned, vertically integrated company. The 2001 reform
divided KEPCO's power generation division into six power generation
companies (GEMCOs), with the aim of improving efficiency and introducing
competition in the electricity industry. In this study, we used
capital total factor productivity (KTFP) to analyze profit changes
from fixed input capital, and an index number profit decomposition
(INPD) to examine the sources of the profit changes. We investigate
the industry thoroughly from three points of view; the overall
industry over time; the power generation sector by company; and
the transmission and distribution sectors of the Korea Electric
Power Corporation (KEPCO). Next, we measured how the profits from
productivity growth were distributed to consumers, fuel suppliers,
employees, and company owners. The results suggest that a more
reasonable price system for both wholesale and consumer prices
needs to be implemented prior to the privatization and deregulation
of the Korean electricity industry.
Keywords: Korean electricity industry; Index number profit decomposition;
Productivity』
1. Introduction
2. Background on the Korean electricity industry
2.1. History of the government's policy on the Korean electricity
industry
2.2. The electricity market
3. Methodology
4. Empirical results
4.1. Overall industry level analysis
4.2. Power generation sector in each GENCO
4.3. Transmission and distribution divisions in KEPCO
5. Conclusion
Appendix A. Analysis by GENCO
References