Pricing for transmission services in Korean electricity market

In Korea, the trend of heavier real power flows into densely populated load centers from several vast power plants in remote locations will continue or become profound, leading to our national-interest transmission bottlenecks during some periods of the year. The first step toward increasing the role of market forces in managing transmission system operations is to develop the role of locational price signals to direct the actions of market participants toward outcomes that improve operations when congestion occurs on the bulk power grid. In this overall perspective, we need to thoroughly investigate how best it would be to send an adequately accurate locational price signal with the congestion costs incorporated into the transmission pricing rule when the electricity market is not unduly maintained. This paper attempts to make a supportive and self-explanatory proposal that it could fit the Korean Cost-Based Pool (CBP) that satisfactorily sharpens the locational price signal.