Since the 1980s, many countries, including Britain and the United States, have been restructuring their electric power sector, an areatraditionally dominated by regulated monopolies. Among various options to introduce competition in this sector, the England and Wales model received a great deal of attention. Under this model of restructuring, the electric power sector was vertically separated into generation, transmission, distribution, and retail segments, and competition was introduced in the generation and retail segments while electricity-transporting network segments remained regulated. Generators were then required to submit bids and trade electricity in a newly established electricity auction market (mandatory pool). Until the mid-1990s, this model was considered state-of-the-art; other jurisdictions embarking on their own electric power sector restructuring adopted the model in slightly modified form. Korea too, drafted a restructuring plan along this line in 1998-99.
However, since skyrocketing electricity prices and rolling blackouts rocked California in the summer and winter of 2000-01, some countries have been taking a second look at electric power sector restructuring and market design. As Korea drafted its restructuring plan based on conventional wisdom prior to the California power crisis, this development came as something of a shock. Although it may be discouraging to change the current plan -especially for those who have been implementing it over the past several years, the negative experience of other jurisdictions with a similar restructuring model should serve as a reminder that Korea's current plan is fraught with serious risks.
Drawing from discussions on electric power sector restructuring in recent years, this study critically examines Korea's current plan and explores policy alternatives. In particular, this study looks at the decision-making process that led to the drafting of the current plan, and provides policy recommendations based on economic theory as well as international experience with electric power sector restructuring.
Electricity has a very low price elasticity of demand in the short run, and its supply gets inelastic at high demand levels. Electricity cannot be stored economically, and is widely regarded as an essential good in modern society, making it difficult to control demand. Due to these characteristics, a failure to balance electricity demand and supply can lead to serious consequences, as was witnessed in California. To keep the system in balance and ensure stable supply, it is essential that adequate standby facilities be made readily available to provide electricity on a short notice. Moreover, to minimize risks involved in market trading of electricity, it is necessary to create a competitive market structure and to lock up a high proportion of total trading volume through bilateral long-term contracts. Such a market design would help to prevent strategic withholding on the part of generators, making it more difficult for tacit collusion to succeed. These considerations cast doubt on the optimality of the mandatory pool structure of the England and Wales model.
In fact, international experiences with electric power sector restructuring suggest that a mandatory pool structure, especially combined with a high proportion of spot-market transactions, tends to create serious problems. California, for example, suffered a major power crisis when generators took advantage of the spot-heavy market rules by strategically withholding their supplies to drive up prices. England and Wales also witnessed a great deal of "gaming" on the part of generators, and in 2001 decided to shut down the mandatory pool and introduce NETA (New Electricity Trading Arrangements) based largely on voluntary long-term contracts. As for Ontario, its spot-heavy restructuring experiment based on simultaneous liberalization of the wholesale and retail segments was short-lived as price spikes forced the provincial government to suspend the program. Influenced by these developments, the European Union and Japan have taken a gradual approach to electric power sector restructuring. While guaranteeing consumer choice and open access to the network, the European Union and Japan eschewed vertical separation and mandatory pools. Instead, they have been promoting competition by lowering trade barriers, pitting vertically integrated electricity companies against one another as well as new entrants.
Market design considerations, as well as international experiences with electric power sector restructuring, suggest that Korea too should take a second look at the current plan. Drafted in the wake of the 1997 economic crisis, the current plan was based on the England and Wales model- characterized by vertical separation of the electric power sector, horizontal division of the generation segment, and spot-heavy electricity trading in a mandatory pool. When this plan was being prepared in 1998, however, Britain was already looking at other options in preparation for the introduction of NETA in 2001. Once the current plan was officially announced, it became difficult to reconsider even in the face of increasing evidence that should have urged caution. In fact, it took the change of government in 2003 before the scope of discussion on restructuring could be expanded.
At the moment, there appear to be two major alternatives for electric power sector restructuring. One option is to follow the lead of the European Union and Japan and adopt a gradual approach, promoting competition among vertically integrated utilities and liberalizing entry. This option helps to ensure stable supply and allows utilities to realize the economies of scope (vertical integration). However, no effective competition can be achieved under this option unless there are a number of vertically integrated utilities. The other option is to consider a model along the line of NETA and encourage voluntary bilateral contracts between generators and consumers, largely bypassing the centralized electricity market. This option makes it difficult for suppliers to engage in tacit collusion and strategic withholding. However, as this option involves vertical separation, it will be important to coordinate investment and operation decisions so as to minimize losses in scope economies.

발간사

요 약

제１장 서 론

제２장 전력산업의 특성

　제1절 전력의 재화적 특성
　제2절 전력산업의 산업조직적 특성

제３장 전력산업 구조개편의 원리와 시장설계 원칙

　제1절 전력산업구조개편의 기본원리
　제2절 전력시장 설계시 주요 고려사항
　제3절 이해관계와 정책결정

제４장 구조개편 선도국의 경험

　제1절 미국
　　1. 캘리포니아
　　2. PJM
　제2절 영국
　제3절 유럽연합
　제4절 일본

제５장 우리나라 전력산업 구조개편의 추진경과 및 문제점

　제1절 구조개편 추진여건의 특성
　제2절 구조개편의 추진경과 및 문제점

제６장 결 론

참고문헌