Abstract
Real-time pricing of electricity ensures that market equilibrium is achieved by both consumers and generators. In this study, the effect of real-time pricing on consumer surplus was analyzed in the context of Korean electricity markets by using the model proposed by Borenstein and Holland[3]. In addition, the authors analyzed the impact of emission cap on consumer surplus. Real-time pricing was shown to affect the composition of generation capacities. It increased the change in consumer surplus up to 7.12% compared to the reference electricity bill. When the cap of 95% of the reference emission was applied, the change in consumer surplus decreased on average by 0.58%. In the study, it is suggested that the implementation of real-time pricing and the investment to increase the price elasticity are necessary to improve consumer surplus.
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