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Why Are Peak Loads Observed during Winter Months in Korea?

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  • Kim, Jee Young
  • Oh, Hyungna
  • Choi, Kyung-Mee

Abstract

Since 2009, electricity consumption has developed a unique seasonal pattern in South Korea. Winter loads have sharply increased, and they eventually exceeded summer peaks. This trend reversal distinguishes these load patterns from those in the USA and the EU, where annual peaks are observed during the summer months. Using Levene's test, we show statistical evidence of a rise in temperature but a decrease in variance over time regardless of the season. Despite the overall increase in the temperature, regardless of the season there should be another cause of the increased demand for electricity in winter. With the present study using data from 1991 to 2012, we provide empirical evidence that relatively low electricity prices regulated by the government have contributed significantly to the rapid upward change in electricity consumption, specifically during the winter months in the commercial sector in Korea.

Suggested Citation

  • Kim, Jee Young & Oh, Hyungna & Choi, Kyung-Mee, 2019. "Why Are Peak Loads Observed during Winter Months in Korea?," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 41(1), pages 43-58.
    • Handle: RePEc:zbw:kdijep:200835
    DOI: 10.23895/kdijep.2019.41.1.43
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    Cited by:

    1. Ryu, Jun-Yeol & Kim, Dae-Wook & Kim, Man-Keun, 2021. "Household differentiation and residential electricity demand in Korea," Energy Economics, Elsevier, vol. 95(C).

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    More about this item

    Keywords

    Electricity Demand; Energy Demand; Commercial Sector; Price Elasticity;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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