Electricity rates have been frozen… Wholesale electricity prices surge due to rising oil prices

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As the global electricity wholesale price (SMP) is on a high rise on the rise of international oil prices, the average SMP for this month is expected to record the highest in the past five years.

According to the Korea Power Exchange and the industry, the average SMP (on land basis) from the 1st to the 25th was 141.53 won per kilowatt-hour (kWh).

In particular, the industry expects that the average SMP for five consecutive days from the 21st will exceed 140 won and this month’s average will exceed 140 won.

SMP is the unit price of electricity purchased by KEPCO from power plants, and is determined by the price of oil, a raw material for power generation.

Although international oil prices have been on a downward trend in recent years, the upward trend of SMP is expected to continue for the time being even if the international oil price rise is slowing down.

This is because SMPs tend to lag oil prices by half a year in general.

Comparing the flow of SMP and international oil prices, the lowest recent Dubai oil price was in April of last year ($20.39 per barrel), and the lowest SMP was in November of the same year (49.65 won), with a 7-month lag between SMP and international oil prices. It followed oil prices.

(Photo = Yonhap News)

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Reference-news.sbs.co.kr

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