Multifractal Analysis of the Impact of Fuel Cell Introduction in the Korean Electricity Market

• Published in: Fractal and fractional Vol. 8; no. 10; p. 573
• Main Authors: Ock, Seung Eun, Lee, Minhyuk, Song, Jae Wook
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.10.2024
• Subjects: 21st century; Alternative energy sources; Commodities industry; Computer centers; Cost control; crossover point detection; Efficiency; Efficient markets; Electric power; Electricity; Electricity distribution; Electricity generation; Energy industry; Energy resources; Fractal analysis; Fractals; Fuel cell industry; Fuel cells; Heterogeneity; Hydrogen as fuel; Hypotheses; Impact analysis; Industrial efficiency; Infrastructure; Korean electricity market; market efficiency; multifractal detrended fluctuation analysis; multifractality; Privatization; Renewable resources; Securities markets; Spectra; Supply & demand; Sustainable development; Time series; Volatility; South Korea; United States > US
• ISSN: 2504-3110; 2504-3110
• DOI: 10.3390/fractalfract8100573

This study employs multifractal detrended fluctuation analysis to investigate the impact of fuel cell introduction in the Korean electricity market via the lens of multifractal scaling behavior. Using multifractal analysis, the research delineates discrepancies between peak and off-peak hours, accounting for the daily cyclicity of the electricity market, and proposes a crossover point detection method based on the Chow test. Furthermore, the impacts of fuel cell introduction are evidenced through various methods that encompass multifractal spectra and market efficiency. The findings initially indicate a higher degree of multifractality during off-peak hours relative to peak hours. In particular, the crossover points emerged solely during off-peak hours, unveiling short- and long-term dynamics predicated on a near-annual cycle. Additionally, the average Hurst exponent for the short-term was 0.542, while the average for the long-term was 0.098, representing a notable discrepancy. The introduction of fuel cells attenuated the heterogeneity in the scaling behavior, which is potentially attributable to the decreased volatility in both the supply and demand spectra. Remarkably, after the introduction of fuel cells, there was a discernible decrease in the influence of long-range correlation within multifractality, and the market exhibited an increased propensity toward random-walk behavior. This phenomenon was also detected in the market deficiency measure, from an average of 0.536, prior to the introduction, to an average of 0.267, following the introduction, signifying an improvement in market efficiency. This implies that the introduction of fuel cells into the market engendered increased supply stability and a consistent increase in demand, mitigating volatility on both the supply and demand sides, thus increasing market efficiency.