Enhancement of Competition & Efficiency in Power Industry

Foreign and Korean power experts assemble for SICEM 2010

The Ministry of Knowledge Economy (MKE) and the Korea Power Exchange (KPX) held the Seoul International Conference on Electricity Market and Regulation 2010 (SICEM 2010) at the COEX InterContinental Hotel in Seoul on Dec. 12-13, bringing together roughly 300 electricity industry experts, government officials and those in related industries from Korea and abroad.
Among the participants were David Kathan, a senior economist at the U.S. Federal Energy Regulatory Commission (FERC); Richard Carrier of the Quebec Energy Commission; Terry Boston, chairman of PJM Interconnection; Keuring van Electrotechnische Materialen (KEMA) CEO Pier Nabuurs; and Lawrence Jones of Alstom.
The speakers stressed the need for the consumer’s aggressive response and the power industry’s push for competition in order to cope with climate change and promote the smart grid and green growth.
The conference reconfirmed the direction of competition and efficiency, as was shown by the governnment’s announcement of policy options on the restructuring of the power industry.
SICEM 2010 was the first conference held this year to combine all events on electricity markets and regulations that had been held separately so far, inviting officials from various prestigious international energy regulatory institutions and electricity markets.
KPX Chairman & CEO Yeom Myong-chun said in his opening message, “This conference is an opportunity for policymakers, Korean and foreign experts and those in the electricity industry to look for better electricity market structures and operations to cope with a changing environment.”
Yeom assessed that SICEM 2009, titled “Smart Grid and Electricity Markets,” upgraded the Korean electricity industry by introducing the smart grid in Korea and abroad and enhancing public awareness. The KPX chairman said the theme of SICEM 2010 was the facilitating of demand-side resources, which emerges as a key business model, because despite diverse load management programs, the electricity industry has been limited to supplier-oriented demand management. He added that this issue should be normalized in the bigger framework of the electricity industry structure, and furthermore, the smart grid is forecast to galvanize new demand-side resources markets through electric vehicles, smart home appliances, large capacity batteries and desalination installations.
In his speech, MKE Vice Minister for Trade and Energy Park Young-jun stressed the need for new discussions on the electricity industry’s structure and policies so that Korea’s green growth policies can yield specific outcomes, including the creation of jobs and energy conservation. He called for industry, academia and research circles to join hands and work together so that more people can enjoy the benefits of electricity and so the Korean electricity industry can establish itself as a new industrial growth engine.
KEMA CEO Nabuurs predicted that the establishment of the smart grid would tear down the barrier between electricity consumer and producer, requiring a new market order. While presenting a paper on the trends of the smart grid and power system sectors, he noted that the global trend is that the neutrality of the national power grid should be maintained and the competition of the power trade, sale and generation fields should be expedited.
Prof. Yoon Won-churl of Hanyang University noted that a competitive system can flexibly cope with climate change and promote low-carbon, green growth, rather than the current system of vertical integration. Presenting his lecture on the future direction of the Korean power industry, he said competition should be necessary in the power trading market so as to achieve energy conservation and greenhouse gas emission reduction goals under such a new power environment as the smart grid.
Experts held in-depth discussions on the direction of policies on demand-side resources utilization under the smart grid environment.
Terry Boston, chairman of PJM Interconnection, maintained that electricity prices should move according to wholesale prices in order to normalize demand responses. nw

Korean and foreign participants of SICEM 2010 join hands for a group photo session.; (left) KPX Chairman & CEO Yeom Myong-chun

KPX to Host VLPGO 2011 Annual Meeting in Seoul
The Korea Power Exchange (KPX) has been awarded the right to host the 7th Very Large Power Grid Operators (VLPGO) 2011 Annual Meeting in Korea.
VLPGO held its 2010 Annual Meeting and Steering Board Meeting in Madrid, Spain on Oct. 25-26 and unanimously voted to award Korea the right to host the 2011 annual meeting.
Korea’s hosting of VLPGO 2011 was reportedly attributable to Korea’s leading role in the development of the smart grid.
The Annual Meeting was attended by 46 participants representing 13 members of the Association. VLPGO welcomed its new member, Eskom, which had recently become part of the Association. By the decision of the VLPGO Steering Board, Luis Atienza Serna, REE chairman and CEO, was elected VLPGO president. John Bear, CEO of Midwest ISO and 2010 VLPGO president, was elected VLPGO vice president for 2011. Atienza and Bear will assume their roles starting Jan. 1, 2011.
KPX plans to hold the 7th VLPGO 2011 Annual Meeting in Seoul. CEOs of power grid operators and power experts from around the world are expected to attend the upcoming meeting in which diverse programs on the development of new smart grid technologies, the strengthening of international cooperation activities and the publicizing of each participating country’s technology. Culture and technology tours will also be offered.
A KPX official said, “The upcoming VLPGO Annual Meeting will likely contribute to helping not only the Korean smart grid industry upgrade its technological power, but also related Korean companies to make inroads into foreign markets.”
VLPGO is a voluntary initiative of the world’s largest power grid operators, representing together more than 60 percent of the electricity demand in the world. VLPGO was created in 2004, following several blackouts across the world, to investigate fundamental issues of common interest to its members and to develop joint action plans addressing the improvement of power system security.
In 2009, VLPGO became a formal organization with the aim of serving as a leader and catalyst in the transition of the electric power industry to the power grids of the 21st century.
KPX Chairman & CEO Yeom Myong-chun headed the Korean delegation to the 6th VLPGO 2010 Annual Meeting.
Following an opening speech by John Bear, chairman of the VLPGO 2010 Annual Meeting, the KPX chairman became one of the speakers of the first day session. He delivered his paper titled “Development of Korea Smart Grid,” in which Korea’s smart grid trends and the Korean government’s roadmap were introduced. He also stressed KPX’s roles as a smart grid leader and the need for expanding international cooperation, receiving keen attention and rave reviews from the participants.
VLPGO’s executive board members’ unanimous selection of KPX as the institution to host the 7th VLPGO Annual Meeting has confirmed Korea’s standing as a leading smart grid powerhouse and fortified KPX’s international position.
The participants of the annual meeting exchanged such information as power grid operators’ ways of coping with a rise in smart gird, wind power and other new and renewable energy sources, direct current transmission systems and new technologies designed to ensure the safety and efficiency of power grids.
The annual meeting also coincided with workshops on two tasks, including the smart grid, as well as six working groups, including ones on the integrated operation of new and renewable energy and the development of new technologies for the restoration of power after grid breakdowns.
The participants toured the central wind power supply station in Spain, one of the countries with the highest share in the global wind power market along with Denmark, and the new and renewable control center where they shared information on the execution of smart grid practices, new and renewable operational knowhow and the direction of technology development.
Spain has been actively engaged in smart grid and power trading among VLPGO members, playing leading roles in executing smart grid pilot programs, standardizing, developing prediction technologies and new and renewable connection technologies.
KPX said it plans to make the Jeju Smart Grid Test Bed project a success by taking a cue from the outcomes of its observational tours to Spain’s facilities.
KPX assessed that the VLPGO 2010 Annual Meeting was an opportunity to reconfirm common views on power grid operators’ roles under the smart grid paradigm, and KPX’s selection as the institution to host the VLPGO 2011 was a message calling for Korea to demonstrate a more powerful leadership role in the smart grid sector.
KPX has so far been actively engaged in diverse working groups, joint projects and workshop activities, and plans to continue to do so in the years to come. nw