(An) expansion plan with a constraint on the foreign exchange expenditure

Abstract

Recently, Korea Electric Power Corporation has been suffering difficulties from foreign debt which is the major financial source because of ongoing depreciation of won and deteriorating loan conditions in the international financial markets. On the other hand, however, power system expansion that requires a very large amount of foreign exchange should be carried out almost every year in order to meet the rapidly growing demand of electricity. Most of the foreign exchange is raised through loans, thus taking KEPCO``s financial state from bad to worse. The purpose of this thesis is to find out an expansion plan exerting less pressure upon KEPCO in terms of its foreign exchange requirement. In an attempt to make WASP, the most frequently used computer package in system planning, consider this purpose of the thesis, a constraint on foreign exchange expenditure is introduced into WASP via modification of its objective function using a Lagrangian multiplier method. With this method, desirable solutions which can save foreign exchange expenditure economically in some senses are identified in an example case.