집단에너지사업의 규모의 경제성에 대한실증 분석

There exist thirty-five integrated energy business (IEB) operators in Korea. Of them, Korea District Heating Corporation (KDHC), a public utility, is a representative IEB operator because its market share is 59% in 2014. This paper aims to investigate the economies of scale of KDHC by the use of a variable cost function over the period 1988-2014.
To this end, we employ the translog cost function based on the quarterly data. The results show that KDHC is operating its business as of 2014 in the process that the scale economy is decreasing but appearing. Considering that L-shaped average cost function frequently prevails in the network industries that demand large-scale initial investments, the scale economy of the KDHC will be sustained for the time being. As the minimum efficient scale indicating constant economies of scale is computed to be 15.119 million Gcal quarterly or 60.474 to 78.904 million Gcal yearly, it is forecasted that the scale economy of KDHC will be continued to the extent of 3.1 to 4.0 times of 2014 production level.
According to the forecast, the KDHC will enjoy the economies of scale for a considerable time. Therefore, expanding the KDHC’s production quantity until the disappearance of the scale economy is more efficient in terms of cost than regulating the KDHC’s new entry to a new IEB.