UPDATES ON UNIT PRICE OF THE FUEL COST ADJUSTED CHARGE
For the three-month period from January 2022 to March 2022
December 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.
- 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)
- 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 2022, the twelve-month average fuel price is Won
338.87 per kilogram measured by taking the average of monthly fuel prices from twelve preceding months from December 2020 to November 2021.
Table 1. The average of monthly fuel prices for the three-month period from September 2021 to November 2021
Before customs duties, individual consumption tax and surcharges, in Won/kg
Fuel type | September 2021 | October 2021 | November 2021 | Average | ||||||||||
Bituminous | 122.14 | 131.46 | 153.82 | 135.81 | ||||||||||
Coal | ||||||||||||||
LNG | 667.99 | 791.08 | 945.52 | 801.53 | ||||||||||
Bunker C oil | 557.85 | 639.75 | 632.33 | 609.98 | ||||||||||
After customs duties, individual consumption tax and surcharges*, in Won/kg | ||||||||||||||
Fuel type | September 2021 | October 2021 | November 2021 | Average | ||||||||||
Bituminous | 168.14 | 177.46 | 199.82 | 181.81 | ||||||||||
Coal | ||||||||||||||
LNG | 703.83 | 822.70 | 970.78 | 832.43 | ||||||||||
Bunker C oil | 607.58 | 691.94 | 684.30 | 661.27 | ||||||||||
- 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 September 2021 to November 2021
Average Price after tax, etc. | Scale Factor | Multiplied Value | |||||||||
Bituminous | Won 181.81/kg | × 0.9649 (α) | Won 175.42/kg | ||||||||
Coal | |||||||||||
LNG | Won 832.43/kg | × 0.3163 (β) | Won 263.33/kg | ||||||||
Bunker C oil | Won 661.27/kg | × 0.0117 (γ) | Won 7.74/kg | ||||||||
Actual Fuel Cost (Total of multiplied values) | Won 446.49/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.
- the difference between the Base Fuel Cost and the Actual Fuel Cost (refer to the Table 3)
- 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 446.49/kg | Won 338.87/kg | Won 107.62/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 107.62/kg | Won 0.1376 kg/kWh | Won 14.8/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 | ||||
3. The Unit Price of the Fuel Cost Adjusted Charge to be applied for the first quarter of 2022
The Unit Price of the Fuel Cost Adjusted Charge to be effective from January 2022 to March 2022 is Won 0 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 Guidelines state that if the Korean government notifies us that it does not wholly or partially adjust the quarterly Fuel Cost Adjusted Charge in case of extenuating circumstances, the Unit Price of the Fuel Cost Adjusted charge shall be applied in accordance with such notification.
The government notified the Unit Price of the Fuel Cost Adjusted Charge to be effective for the first quarter is Won 0 per kilowatt-hour, same as the fourth quarter of 2021, citing that even though the Unit Price of the Fuel Cost Adjusted Charge for the first quarter of 2022 was derived to be equal to Won
29.1 per kilowatt-hour due to the rapid increase in global fuel prices, there is the need to alleviate the hardship of the Korean people caused by the prolonged economic effects of Covid-19 pandemic and high inflation rates.
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KEPCO - Korea Electric Power Corporation published this content on 28 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 December 2021 07:46:02 UTC.