Korea Power Exchange (KPX), a nonprofit organization, plays a key role in South Korea’s power industry.
KPX ensures the reliability of power supply by coordinating the flow of electricity in all regions of South Korea.
As a neutral and independent organization, KPX also ensures the fair and transparent management of the power market.
To secure future power reliability, KPX runs a sophisticated national planning process for generation and transmission expansion by active cooperation and coordination with the government.
What is the Cost-Based Pool?
The current Korean electricity market is called Cost-Based Pool, since the market price reflects actual generation costs. Under the pool system, all generators are obliged to submit the details of their production costs, which are independently checked and approved by the Generation Cost Assessment Committee (GCAC). Using this information, KPX prepares a Price Setting Schedule and calculates the system marginal price (SMP) based on the principle of minimizing the system variable cost.
- System Marginal Price (SMP) is determined as the most expensive generation available for the trading period in the Price Setting Schedule.
- After real-time dispatching, settlement for the energy produced takes place based on the market price (SMP, Capacity Payment).
What KPX has done so far?
The most critical service in the power market is the coordination provided by the system operator. As a neutral, independent and nonprofit organization, KPX can ensure safe and reliable system operation. Thus, since its establishment in 2001, KPX has exerted considerable effort toward this end.