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    A015760   KR7015760002

KOREA ELECTRIC POWER CORPORATION

(A015760)
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Korea Electric Power : Updates on the Unit Price of the Fuel Cost Adjuste...

06/21/2021 | 05:33am EDT

UPDATES ON UNIT PRICE OF THE FUEL COST ADJUSTED CHARGE

For the three-month period from January 2021 to March 2021

December 2020

1. Calculation details of the Actual Fuel Cost and the Base Fuel Cost

The formula for calculating the amount of the Actual Fuel Cost is by multiplying (i) and (ii) below for each type of fuel, bituminous coal, LNG and Bunker C oil and then summing up those multiplied values, thus drawing out the average fuel price.

  1. the average of monthly fuel prices from three preceding months from one month before the start of each period as posted by the Korea Customs Service (refer to the Table 1)
  2. the Scale Factor which is the weighted value for each type of fuel considering the calorific value and the input ratio (refer to the Table 2)

The Base Fuel Cost is the past twelve-month average fuel price of bituminous coal, LNG and Bunker C oil as posted by the Korea Customs Service. For 2021, the twelve-month average fuel price is Won

289.07 per kilogram measured by taking the average of monthly fuel prices from twelve preceding months from one month before the new tariff system was implemented, from December 2019 to November 2020.

Table 1. The average of monthly fuel prices for the three-month period from September 2020 to November 2020

Before customs duties, individual consumption tax and surcharges, in Won/kg

Fuel type

September 2020

October 2020

November 2020

Average

Bituminous Coal

65.10

61.03

61.83

62.65

LNG

310.38

315.71

347.99

324.70

Bunker C oil

343.63

323.13

324.87

330.54

After customs duties, individual consumption tax and surcharges*, in Won/kg

Fuel type

September 2020

October 2020

November 2020

Average

Bituminous Coal

111.10

107.03

107.83

108.65

LNG

335.50

340.99

374.23

350.24

Bunker C oil

386.81

365.69

367.48

373.33

  • In accordance with Article 50 of the Customs Act, Article 1 of the Individual Consumption Act and Article 24 of Enforcement Decree of the Petroleum and Alternative Fuel Business Act

Table 2. The Actual Fuel Cost of the three-month period from January 2021 to March 2021

Average Price after tax, etc.

Scale Factor

Multiplied Value

Bituminous Coal

Won 108.65/kg

× 0.8591 (α)

Won 93.34/kg

LNG

Won 350.24/kg

× 0.3661 (β)

Won 128.24/kg

Bunker C oil

Won 373.33/kg

× 0.0093 (γ)

Won 3.47/kg

Actual Fuel Cost (Total of multiplied values)

Won 225.05/kg

2. Calculation details of the Unit Price of the Fuel Cost Adjusted Charge

The Unit Price of the Fuel Cost Adjusted Charge is calculated by multiplying (i) and (ii) below.

  1. the difference between the Base Fuel Cost and the Actual Fuel Cost (refer to the Table 3)
  2. the Conversion Factor which is the input amount in kilograms to generate one kilowatt- hour of electricity. (refer to the Table 4)

However, any value that exceeds Won ±5 per kilowatt-hour will not be reflected in the Fuel Cost Adjusted Charge. Also, there is a quarterly cap on the Unit Price of the Fuel Cost Adjusted Charge to be (i) no less than Won ±1 per kilowatt-hour and (ii) no greater than Won ±3 per kilowatt-hour as compared to the immediately preceding quarter. (refer to the Table 4)

Table 3. The difference between the Base Fuel Cost and the Actual Fuel Cost

Actual Fuel Cost (a)

Base Fuel Cost (b)

Difference (a - b)

Won 225.05/kg

Won 289.07/kg

Won -64.02/kg

Table 4. Calculations on the Unit Price of the Fuel Cost Adjusted Charge

Before the caps

Difference (a)

Conversion Factor (b)

Unit Price of the Fuel Cost Adjusted Charge (a×b)

Won -64.02/kg

Won 0.1634 kg/kWh

Won -10.5/kWh

After the caps

After the ±5 cap

After the quarterly cap

Unit Price of the Fuel

Cost Adjusted Charge

Won -5.0/kWh

Won -3.0/kWh

Won -3.0/kWh

Therefore, Unit Price of the Fuel Cost Adjusted Charge to be effective from January 2021 to March 2021 is Won -3 per kilowatt-hour.

UPDATES ON UNIT PRICE OF THE FUEL COST ADJUSTED CHARGE

For the three-month period from April 2021 to June 2021

March 2021

1. Calculation details of the Actual Fuel Cost and the Base Fuel Cost

The formula for calculating the amount of the Actual Fuel Cost is by multiplying (i) and (ii) below for each type of fuel, bituminous coal, LNG and Bunker C oil and then summing up those multiplied values, thus drawing out the average fuel price.

  1. the average of monthly fuel prices from three preceding months from one month before the start of each period as posted by the Korea Customs Service (refer to the Table 1)
  2. the Scale Factor which is the weighted value for each type of fuel considering the calorific value and the input ratio (refer to the Table 2)

The Base Fuel Cost is the past twelve-month average fuel price of bituminous coal, LNG and Bunker C oil as posted by the Korea Customs Service. For 2021, the twelve-month average fuel price is Won

289.07 per kilogram measured by taking the average of monthly fuel prices from twelve preceding months from one month before the new tariff system was implemented, from December 2019 to November 2020.

Table 1. The average of monthly fuel prices for the three-month period from December 2020 to February 2021

Before customs duties, individual consumption tax and surcharges, in Won/kg

Fuel type

December 2020

January 2021

February 2021

Average

Bituminous Coal

60.79

68.37

73.67

67.61

LNG

392.55

453.44

590.44

478.81

Bunker C oil

368.74

392.13

432.63

397.83

After customs duties, individual consumption tax and surcharges*, in Won/kg

Fuel type

December 2020

January 2021

February 2021

Average

Bituminous Coal

106.79

114.37

119.67

113.61

LNG

420.13

482.84

623.96

508.97

Bunker C oil

412.67

436.76

478.48

442.64

  • In accordance with Article 50 of the Customs Act, Article 1 of the Individual Consumption Act and Article 24 of Enforcement Decree of the Petroleum and Alternative Fuel Business Act

Table 2. The Actual Fuel Cost of the three-month period from July 2021 to September 2021

Average Price after tax, etc.

Scale Factor

Multiplied Value

Bituminous Coal

Won 113.61/kg

× 0.8591 (α)

Won 97.60/kg

LNG

Won 508.97/kg

× 0.3661 (β)

Won 186.35/kg

Bunker C oil

Won 442.64/kg

× 0.0093 (γ)

Won 4.12/kg

Actual Fuel Cost (Total of multiplied values)

Won 288.07/kg

2. Calculation details of the Unit Price of the Fuel Cost Adjusted Charge

The Unit Price of the Fuel Cost Adjusted Charge is calculated by multiplying (i) and (ii) below.

  1. the difference between the Base Fuel Cost and the Actual Fuel Cost (refer to the Table 3)
  2. the Conversion Factor which is the input amount in kilograms to generate one kilowatt- hour of electricity. (refer to the Table 4)

However, any value that exceeds Won ±5 per kilowatt-hour will not be reflected in the Fuel Cost Adjusted Charge. Also, there is a quarterly cap on the Unit Price of the Fuel Cost Adjusted Charge to be (i) no less than Won ±1 per kilowatt-hour and (ii) no greater than Won ±3 per kilowatt-hour as compared to the immediately preceding quarter. (refer to the Table 4)

Table 3. The difference between the Base Fuel Cost and the Actual Fuel Cost

Actual Fuel Cost (a)

Base Fuel Cost (b)

Difference (a - b)

Won 288.07/kg

Won 289.07/kg

Won -1.00/kg

Table 4. Calculations on the Unit Price of the Fuel Cost Adjusted Charge

Before the caps

Difference (a)

Conversion Factor (b)

Unit Price of the Fuel Cost Adjusted Charge (a×b)

Won -1.00/kg

Won 0.1634 kg/kWh

Won -0.2/kWh

After the caps

After the ±5 cap

After the quarterly cap

Unit Price of the Fuel

Cost Adjusted Charge

Won -0.2/kWh

Won -0.2/kWh

Won -0.2/kWh

3. The Unit Price of the Fuel Cost Adjusted Charge to be applied for the second quarter of 2021

The Unit Price of the Fuel Cost Adjusted Charge to be effective from April 2021 to June 2021 is Won -3per kilowatt-hour instead of Won -0.2 per kilowatt-hour pursuant to Article 2.4) of the Guidelines for Operation of the Unit Price of the Fuel Cost Adjusted Charge under the Terms and Conditions for Electricity Supply.

The government notified the Unit Price of the Fuel Cost Adjusted Charge to be effective for the second quarter is Won -3 per kilowatt-hour, same as the first quarter, citing that even though the Unit Price of the Fuel Cost Adjusted Charge for the second quarter of 2021 was derived to be equal to Won -0.2 per kilowatt-hour due to the increase in global fuel prices, there are (i) the abnormal nature of the rapid increase in the price of LNG due to the global cold wave in the winter of late 2020 and early 2021, (ii) the need to alleviate the hardship of the Korean people caused by the prolonged economic effects of Covid-19 pandemic, and (iii) the consideration of some portion of the Fuel Cost Adjusted Charge that was not reflected in the Unit Price of the Fuel Cost Adjusted Charge for the first quarter of 2021 because of its cap at the lower bound of Won -3 per kilowatt-hour instead of being further decreased.

Disclaimer

KEPCO - Korea Electric Power Corporation published this content on 21 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 June 2021 09:32:05 UTC.


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Average target price 28 333,33 KRW
Spread / Average Target 13,6%
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Seung-il Cheong President, Chief Executive Officer & Director
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Jwa-Kwan Kim Independent Director
Hyo-Seong Park Independent Director
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