DEUNG-YONG HEO

Iowa State University

Department of Economics
178A Heady Hall, Ames
IA 50011
Citizenship:
Education:
(Expected) May 2015

dyheo@iastate.edu
https://sites.google.com/site/deungyongheo
Office: +1-515-294-5574
Cell: +1-515-708-3312
Republic of Korea (South Korea)

Ph.D. candidate, Economics, Iowa State University, Ames, Iowa, U.S.A

Advisor: Leigh S. Tesfatsion
Major Fields: Environmental and Resource Economics,
Industrial Organization, Financial Economics
Research Interests: Electric Power Market Design and Policy,
Renewable Energy, CO2 Emission Policy.
Agent-Based Computational Economics
Tentative Thesis: Studies on Electric Power Markets: Preparing for
the Penetration of Renewable Resources

2009

MA, Economics, Department of Agricultural Economics and Rural

Development, Seoul National University, Seoul, Korea
Advisor: Oh Sang Kwon
Graduation with Highest Honor, College of Agriculture and Life Sciences
Thesis: A CGE Analysis of the Influence of Carbon Emission Charge on South
Korean Economy : Direct and Indirect Emission Approach

2003

BA, Economics, Magna Cum Laude, Department of Agricultural

Economics and Rural Development, Seoul National University, Seoul,
Korea
- The early graduation of an excellent student (3 years)

Published Papers:
1. Oh Sang Kwon and Deung-yong Heo, The Incidence of Green Tax in Korea, Korean Studies
in Public Finance, pp. 147-172, 2011.
Papers under Review:
1. Deung-Yong Heo and Leigh Tesfatsion, Facilitating Appropriate Compensation of Electric
Energy and Reserve through Standardized Contracts, October 2014.

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Working Papers:
1. Deung-Yong Heo and Leigh Tesfatsion, Energy and Reserve Procurement Through
Standardized Contracts in Linked Electricity Markets: Illustrative Examples, WP #13018,
November 2013 Revised on June 2014 .
(http://www.econ.iastate.edu/sites/default/files/publications/papers/p16747-2013-11-29.pdf)
The current design of wholesale electric power markets makes it difficult to ensure
appropriate compensation for many important services, such as flexibility in start-up times,
ramp-rates, power dispatch levels, and duration. This study examines the possibility of
facilitating appropriate compensation through the introduction of standardized
energy/reserve contracts with swing (flexibility) in their contractual terms. Concrete
examples are used to demonstrate how the trading of these standardized contracts can be
supported by linked day-ahead and real-time markets in a manner that permits efficient realtime load balancing subject to system constraints and reserve requirements. Comparisons
with existing wholesale electric power markets are given, and key policy implications are
highlighted.
Papers in Progress:
1. Deung-Yong Heo, An Improved Method for the Short-Term Forecasting of Electric Power
Market Performance with Increased Penetration of Renewable Energy.
This study extends system pattern method for short-term forecast system variables such as
locational marginal prices, power generation levels, and power flows in transmission lines to
incorporate non-dispatchable renewable energy into conventional electric power system. This
study also extends system pattern method for CO2 emission forecast. System pattern denotes
the structural generation capacity and transmission line condition as consisting of a vector
of flags indicating the marginal status of committed generation and the congestion status of
available transmission lines at any given system operating point. In addition, this study
clarifies topological aspects of system pattern region on net load space and broadens the
scope of system pattern method application. First, this study suggests constructing
empirically-based system pattern transition matrix from historical data, and applies it to
forecast system variable status without load forecasting. Second, this paper investigates
possible application of system patterns in load scenario reduction. Extended system pattern
method and application are verified and illustrated through 5-bus test bed with data from
MISO.
2. Deung-Yong Heo, An 9-Zone Electric Power Market Test Platform Based on Data from the
Midcontinent Independent System Operator.
This study provides an 9-Zone test bed based on the Midcontinent Independent System
Operator (MISO) data for application in electric power market studies. This 9-zone consists
of pre-existing seven Midwest zones and newly added two South zones. Generators can have
different fuel type and capacity. They submit hourly supply offers in day-ahead market. Loadserving entities also submit hourly demand bids in day-ahead market. System operator clears
the hourly bid and offer by solving optimal power flow problem under constraints of 9-zone
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AC transmission grid. This 9-zone bed allows a wide range of implementable sensitivity
studies. To illustrate possibility of implementation, this study reports change of Day-Ahead
(DA) Locational Marginal Prices (LMPs) through a comparative study of 7-Zone Midwest
test bed before South sub-region integration versus 9-Zone test bed after South sub-region
integration. Simulated DA LMPs are determined through Security Constrained Unit
Commitment (SCUC) and Security Constrained Economic Dispatch (SCED) processes in
both test beds. The simulation result shows that LMPs are decreased after the integration of
South sub-region during the peak load day, July 18 2013. The result is consistent with the real
world MISO LMP changes.

3. Deung-Yong Heo, The Effects of Wind Power and Carbon Tax on Electric Wholesale Power
Market: 7-Zone Test Bed based on MISO Data.
President Barack Obama committed in the December 2009 Copenhagen Climate Change
Summit to gradually reduce CO2 emissions by 2050. Thus the U.S. federal government
considers several policy options to reduce CO2 emissions. In the U.S., the largest source of
CO2 emissions is the electricity sector, which was responsible for 32% of total CO2
emissions in 2012. Especially, this paper analyzes the impact of carbon tax and wind power
generation on CO2 emissions and other market variables using Midcontinent Independent
System Operator (MISO) data based on agent-based model platform for electricity market.
Sensitivity studies over extensive scenarios are implemented to analyze the effects of CO2
policies on net-load, average price, dispatch level and profits of each generator in electricity
market. Results show that wind power integration is more effective than carbon tax in CO2
emissions reduction without load-price responsiveness. Profit of coal generator decreases
through all policy scenarios, while profit of other generators increase or decrease across
policy scenarios. Also, wind power generator faces severe loss in wind power generation and
the loss increases as wind power penetration rate increases. However, this study shows that
carbon tax revenue can be sufficient to subsidize for all losses of wind power generator and
government even can have some residuals of the revenue, when carbon tax rate is equivalent
to 2013 EU-ETS average spot market carbon price. Comparisons with current power market
situations are given, and key policy implications are provided.
4. Deung-Yong Heo and Hyun-Seok Kim, The Estimation of the U.S. Residential Electricity
Consumption: Does obesity matter?.
This study investigates the residential electricity demand with nationwide household-level
panel data, Panel Study of Income Dynamics (PSID), that covers recent seven odd numbered
years from 1999 to 2011. On the contrary to the data set used in previous researches such as
short term panel data or mixture of panel data and multi-year cross-sectional data, PSID is
long term panel data and self-sufficient to contain full information for matching household
electricity consumption with household characteristics without combining multi-year crosssectional data. Our data set covers all U.S. states and District of Columbia except Alaska and
Hawaii, and household-level data can be aggregated into family-level data based on 1968
identification. This study uses static and dynamic models to estimate short and long term
price elasticities of residential electricity demand respectively. Static model reports that the
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range of own price elasticities is -0.402 to -0.389 across aggregation level (household- familyand state-level). We show the robustness of these estimates through various checks. Dynamic
model reports that long term own price elasticity is -0.432 which is slightly higher than short
term own price elasticities. Short and long term own price elasticities estimated in this study
lie between the results of previous researches. This study also takes into account obesity of
household head in estimating residential electricity demand which has not been investigated
in previous researches. Our results show that obesity has positive and significant impacts on
residential electricity consumption in several models. Moreover, we can observe that the
positive effect of obesity on residential electricity consumption becomes greater and more
significant as income increases and own price elasticity is concave function of income. Our
results provide the evidence that obesity can be one of the important attributes of energy
consumption and policymaker needs to take into account obesity in establishing energy
policies together with other existing explanatory variables.

Presentations:
1. (Invited Paper) Deung-Yong Heo and Leigh Tesfatsion, Facilitating Appropriate
Compensation of Electric Energy and Reserve through Standardized Contracts with Swing,
INFORMS 2014 Annual Meeting, San Francisco, California, U.S., November 09-12, 2014.
2. (Invited Paper) Leigh Tesfatsion and Deung-Yong Heo, Facilitating Appropriate
Compensation of Electric Energy and Reserve through Standardized Contracts with Swing,
GridWise Architecture Council Meeting & Workshop, California ISO, Folsom, CA,
September 10-11, 2014
3. (Invited Paper) Leigh Tesfatsion and Deung-Yong Heo, Facilitating Appropriate
Compensation of Electric Energy and Reserve through Standardized Contracts with Swing,
Federal Energy Regulatory Commission (FERC) Technical Conference On Increasing RealTime And Day-Ahead Market Efficiency Through Improved Software (AD10-12-005),
Washington, D.C., U.S., June 23-25, 2014.
4. (Invited Paper) Oh Sang Kwon and Deung-Yong Heo, The Incidence of Green Tax in Korea,
The 1st Congress of East Asian Association of Environmental and Resource Economics,
Hokkaido University, Sapporo, Japan, August 18-19, 2010.
5. (Invited Paper) Oh Sang Kwon and Deung-Yong Heo, The Incidence of Green Tax in Korea,
The 14th International Conference of The Korean Economic Association, Chung-Ang
University, Seoul, August 10-11, 2010.
Research Experiences:
June 2013 Aug 2013

Ph.D. Internship in Field of Energy System, Pacific Northwest National

Laboratories, Richland, WA (mentored by Dr. Somani)

Working in field of energy system

System pattern analysis with wind power penetration
PJM and ERCOT market survey for capacity and scarcity payment
Transactive energy survey
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Fall 2011 Spring 2013

Research Assistant, Ancillary Service Market Design Project (collaborate

with Dr. Tesfatsion and SANDIA national lab supported by DOE), Ames,
Iowa, USA
Ancillary Service Market Design Project (collaborate with Prof.
Tesfatsion and SANDIA national lab supported by DOE)
Survey of FERC energy regions for ancillary services,
day-ahead, real-time, market clearing and settlement
Contributor of SANDIA report , New Wholesale Power Market Design
Using Linked Forward Markets: A Study for the DOE Energy Storage
Systems Program (SAND2013-2789) and A Survey of Operating Reserve
Markets in U.S. ISO/RTO-managed Electric Energy Regions
(SAND2012-1000)

Dec 2009

Visiting Researcher, Korea Energy Economics Institute, Uiwang,

Gyeonggi, Korea
Build Matlab based model and program for calculating CO2 emission
from Input-Output table

Sep 2008 Spring 2010

Research Assistant, Department of Agricultural Economics & Rural

Development, Seoul National University, Seoul, Korea

Dec 2007 - Aug 2008

Researcher, Research Planning Office, Korea Rural Research Institute,

Ansan, Gyeonggi, Korea

Teaching Experiences:
Fall 2013 - Current

Teaching Assistant, Econ 101, 102, 355., Iowa State University, Ames,
Iowa, USA.

Fall 2010 - Spring 2011

Teaching Assistant, Econ 101, 102, 355, 455., Iowa State University,
Ames, Iowa, USA.

Spring 2004

Teaching Assistant, Microeconomics (Professor Oh Sang Kwon),

Seoul National University, Seoul, Korea.
- Instructed regular T.A. sessions

Spring 2003

Teaching Assistant, Calculus and Ordinary Differential Equation,

(Professor Jae Ryong Kwon), Postech, Pohang, Korea
- Instructed regular T.A. sessions

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Research Reports:
1. Leigh S. Tesfatsion, Csar A. Silva-Monroy, Verne W. Loose, James F. Ellison, Ryan T.
Elliott, Raymond H. Byrne, and Ross T. Guttromson, New Wholesale Power Market Design
Using Linked Forward Markets: A Study for the DOE Energy Storage Systems Program,
Sandia Report, SAND2013-2789, April 2013, Contributor.
2. James Ellison, Leigh Tesfatsion, Verne Loose, A Survey of Operating Reserve Markets in
U.S. ISO/RTO-managed Electric Energy Regions, Sandia Report (SAND2012-1000),
Contributor.
3. Jong Won Kim et al., Research on Korean Territory Development Strategy : Green-Growth
Type Approach, Korea Research Institute For Human Settlement, 2009.
4. Oh Sang Kwon and Deung-Yong Heo, Building Korean CGE Model including Water
Resources, Korea Water Resources Corporation, 2009.
5. Oh Sang Kwon et al., Forecasting and Developing Non-R&D Workforce in the New ClimateChange-Related Industries, Korea Government, 2009.
6. Oh Sang Kwon et al., Valuation of Agricultural, Environmental and Recreational Water,
Sustainable Water Resources Research Center. 2006.
7. Oh Sang Kwon et al., Forecasting and Reforming of Korean Fertilizer Industry, Korea
Fertilizer Industry Association, 2005.
8. Taeho Lee et al., Studies on Improvement of Agriculture and Rural Area in North Korea after
Unification, Seoul National University, 2004.

Honors and Awards:

Fall 2013 - Current

Teaching Assistant Scholarship, Iowa State University

Spring 2011 Spring 2013 Research Assistant Scholarship, Iowa State University
Fall 2010 Spring 2011

Teaching Assistant Scholarship, Iowa State University

Spring 2009

Graduation with Highest Honor, College of Agriculture and

Life Sciences (M.A. course), Seoul National University

Spring 2005

Distinguished Trainee, Korea Coast Guard Academy

Fall 2003 - Fall 2004

Teaching and Research Assistant Scholarship, Seoul National University

Fall 2003 - Fall 2004

Merit-based Scholarship, Graduate School of Seoul National University

Spring 2003

Teaching Assistant Scholarship, Department of Mathematics, Postech

February 2003

Magna Cum Laude, Seoul National University

(graduated at the 2nd highest in the department, 3-year graduation)

Fall 2000 - Fall 2002

Merit-based Scholarship, Seoul National University

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Other Professional Activities:

Reviewer for : Energy Economics, The Energy Journal
Computer Skills: Matlab, R, JAVA, LaTex, MS Office
Languages: Korean (native), English (fluent)

References
Leigh S. Tesfatsion (Advisor)
Professor of Economics

John R. Schroeter (Committee member)

Professor and Interim Chair of Economics

Iowa State University

375 Heady Hall
Ames, IA 50011
Phone: 515-294-0138
Email: tesfatsi@iastate.edu

Iowa State University

266B Heady Hall
Ames, IA 50011
Phone: 515-294-5876
Email: johns@iastate.edu

Sergio H. Lence (Committee member)

Professor of Economics

Gray Calhoun (Committee member)

Assistant Professor of Economics

Iowa State University

368E Heady Hall
Ames, IA 50011
Phone: 515-294-8960
Email: shlence@iastate.edu

Iowa State University

467 Heady Hall
Ames, IA 50011
Phone: 515-294-6271
Email: gcalhoun@iastate.edu

Oh Sang Kwon (Advisor for MA course)

Professor of Agricultural Economics

Abhishek Somani (Mentor for Ph.D. internship)

Scientist

Seoul National University

Room 8228, Building #200
San 56-1 Sillim-dong, Gwanak-gu,
Seoul 151-742, South Korea
Phone: +82-2-880-4728
Email: kohsang@snu.ac.kr

Pacific Northwest National Laboratory

902 Battelle Boulevard
P.O. Box 999, MSIN K1-85
Richland, WA 99352
Phone: 509-375-6407
Email: abhishek.somani@pnnl.gov

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