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Analyzing Economic Effects with Energy Mix Changes: A Hybrid CGE Model Approach

Listed author(s):
  • Taesik Yun

    ()

    (Decommissioning Engineering Team, Decommissioning & Spent Fuel Technology Center, KHNP Central Research Institute, 70, 1312-gil, Yuseong-daero, Yuseong-gu, Daejeon 34101, Korea)

  • Gyeong Lyeob Cho

    ()

    (Division of Future Growth Strategy Research, Korea Economics Research Institute, 24, Yeoui-daero, Yeongdeungpo-gu, Seoul 07320, Korea)

  • Jang-Yeop Kim

    ()

    (Department of Industrial and Information Engineering, Yonsei University, 50, Yonsei-ro, Seodaemun-gu, Seoul 03722, Korea)

Registered author(s):

    We evaluate the micro and macro-economic effects with the hybrid mixed complementary approach we design to take account of these unique features of the Korean electricity industry. The features we consider are not only the electricity itself but also the Korean electricity market mechanism. Unlike typical commodities, the electricity has unique features. As well known, the electricity supply is not easy to meet an instant hike of rump sum demand of electricity in a smooth and timely manner, since the quantity of power generating is fixed at specific time with the limited capacities. On top of that, we add the Korean electricity market mechanism that the selling price through the Korea Power Exchange (KPX) is unitary, although the marginal production cost of each generating technology. From the modeling point of view, we segment the Korean electricity industry into nine generating technologies such as six conventional and three renewable technologies. In addition, we construct the specifically defined 40-by-40 SAM table to include electricity generating sectors by different resources. With these assumptions, four scenarios for policy simulation are designed according to the supply share reduction of the nuclear power generation. The research result shows micro and macro-economic indices are negatively impacted especially in cases that the share of nuclear power is lower than that of basis case.

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    Article provided by MDPI, Open Access Journal in its journal Sustainability.

    Volume (Year): 8 (2016)
    Issue (Month): 10 (October)
    Pages: 1-18

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    Handle: RePEc:gam:jsusta:v:8:y:2016:i:10:p:1048-:d:80858
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    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70, pages 215-215.
    2. Dorothée Boccanfuso & Antonio Estache & Luc Savard, 2009. "Electricity Reforms In Mali: A Macro-Micro Analysis Of The Effects On Poverty And Distribution," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 127-147, March.
    3. Böhringer, Christoph & Rutherford, Thomos F., 2009. "Integrated assessment of energy policies: Decomposing top-down and bottom-up," Journal of Economic Dynamics and Control, Elsevier, vol. 33(9), pages 1648-1661, September.
    4. Andreas Schafer and Henry D. Jacoby, 2006. "Experiments with a Hybrid CGE-MARKAL Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 171-177.
    5. Lau, Morten I. & Pahlke, Andreas & Rutherford, Thomas F., 2002. "Approximating infinite-horizon models in a complementarity format: A primer in dynamic general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(4), pages 577-609, April.
    6. Messner, Sabine & Schrattenholzer, Leo, 2000. "MESSAGE–MACRO: linking an energy supply model with a macroeconomic module and solving it iteratively," Energy, Elsevier, vol. 25(3), pages 267-282.
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