Due to COVID-19... May's Power Reserve Rate Hits All-Time High

Electric Wholesale Price Hits Lowest in 4 Years... Power Generation Industry Concerns

[Asia Economy Reporter Moon Chaeseok] It has been revealed that electricity demand sharply declined due to the impact of the novel coronavirus infection (COVID-19). This is one of the main bases for economic diagnosis, showing a contraction.

According to the Korea Power Exchange's statistical information system (EPSIS) on the 7th, the day with the highest electricity usage last month was the 18th at 5 p.m., with 65,700 MW. The supply reserve capacity was 22,511 MW.

The supply reserve margin was 34.3%, the highest since related statistics began to be compiled in 1993 on a monthly basis.

The power supply reserve margin refers to the ratio of the amount of electricity that can be supplied immediately from power plants nationwide but has not been produced.

It is generally calculated based on the maximum power demand moment within a month. A rate of 34.3% means that even on the day with the highest electricity consumption in the month, more than 30% of electricity remained unused.

This year, the monthly power reserve margin has been on the rise, from 15% in January to 19.1% in February, 23.9% in March, and 25% in April.

According to the Korea Electric Power Corporation's power statistics bulletin, industrial electricity sales in the first quarter of this year totaled 70.97 million megawatt-hours (MWh), down 2.3% compared to the same period last year. The industrial electricity demand likely decreased due to the impact of COVID-19.

The electricity market price (SMP), which is the wholesale electricity price, also fell to the lowest level in four years. The SMP, which was about 84.3 won per kilowatt-hour (kWh) in January this year, dropped to approximately 69.5 won last month.

This summer is forecasted to be hotter than usual with frequent heatwaves, which may increase household electricity demand due to more air conditioner use. However, industrial demand, which accounts for about 60% of total electricity demand, is expected to decrease compared to previous years due to the impact of COVID-19. Because of this, concerns in the energy industry are deepening.