INVESTMENT IN GEOTHERMAL POWER PLANT: ECONOMIC RETURN VS "REGULATED" MARKET SELLING PRICE

• Main Author: RADITYO (NIM: 29107160) ; Pembimbing: Kin Tjendrasa, MBA, ARYO
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/15054
• Institution: Institut Teknologi Bandung

Although Indonesia is among only a handful of countries to develop geothermal energy, utilization of geothermal <br /> <br /> <br /> potential has proceeded very slowly and is currently facing difficult challenges and uncertainty. Over a span of 20 years, Indonesia developed only 787 MW of geothermal power, or 4 percent of 20,000 MW of geothermal potential. Geothermal future development will depend on its competitiveness against other electricity generation.High capital costs and the associated electricity tariff required remain core problems. <br /> <br /> <br /> The government has committed to increase renewable resources and low carbon sources in primary energy <br /> <br /> <br /> portfolio (4.5% to over 17%(2025)). A Presidential Decree No. 5 announced in 2006 that set the direction of <br /> <br /> <br /> National Energy Policies. The second crash program has been set to meet the growing demand. This crash program (2009-2014) contains over 60% of new capacity from renewable resources, and approximately 5,000 MW or 48% from geothermal resources. 70% of the investments in geothermal will be financed and developed by the private sector (IPPs), and some to receive support from international Financial Institutions and bi-lateral agencies, such as the World Bank, ADB, JICA, etc.This final project is to have a justification from an economic analysis of geothermal power plant that will provide return and growth. Economic analysis will be made base on CAPEX, OPEX and price, which are the sensitive input to gain the economic model. The result is a comparison between several possible prices. The main objective of this paper is to get an idea about investment in geothermal power plant related with the “regulated” market selling price. Some business solutions, such as scenarios (base case and upside potential), are prepared with implementation plan as a response to the current situation.