Wholesale electricity price breaks 270 KRW per kWh... Fourth record high this month

270.24 KRW per liter on the 13th (land basis)
KEPCO, rate hike proves useless

On the 31st, as power demand increases due to the heatwave, air conditioner outdoor units are densely installed on the exterior wall of a building in Jung-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Sejong=Reporter Dongwoo Lee] The System Marginal Price (SMP), the wholesale electricity price applied by Korea Electric Power Corporation (KEPCO) when purchasing electricity from power producers, set a new daily record high on the 13th, breaking the previous record set just two days earlier.

According to the Korea Power Exchange, the SMP on the mainland was recorded at 270.24 KRW per kilowatt-hour (kWh), marking the highest daily average price. This surpassed the previous all-time high of 269.98 KRW recorded on the 11th, just two days prior. The monthly average SMP for this month (from the 1st to the 13th) also reached a record high of 249.48 KRW, up 7.1% compared to the previous month (232.82 KRW).

If this trend continues, the monthly average SMP is also expected to break the all-time high. At one point, the SMP soared to 288.65 KRW per kWh (between 10 AM and 11 AM on the 11th).

In the first half of this year, KEPCO purchased electricity at 169 KRW per kWh and sold it at an average of 110 KRW, resulting in a deficit of 59 KRW. This is due to the sharp rise in liquefied natural gas (LNG) prices, a major energy source for power generation, caused by the prolonged Russia-Ukraine war. Based on the Japan-Korea Marker (JKM) for natural gas prices, the spot LNG price reached 44.55 USD per MMBtu at the end of last month, a 68.3% increase compared to January this year (26.46 USD).

With increased heating demand during the winter season, the cost of power generation is expected to rise further for the time being. As a countermeasure, the government plans to lower electricity costs by maximizing the operation rate of nuclear power plants, which have lower generation costs, and launching large-scale energy-saving initiatives centered on public institutions.

Seung-il Jeong, President of KEPCO, expressed concern two days ago at the National Assembly audit held at KEPCO headquarters in Naju, Jeollanam-do, involving KEPCO, Korea Hydro & Nuclear Power, and its affiliated power producers, stating, "The global energy industry is currently facing a crisis comparable to the oil shock."

This content was produced with the assistance of AI translation services.