IN SEARCH OF FAVORABLE BUSINESS INVESTMENT AND OPERATION METHODOLOGY IN DEVELOPING GEOTHERMAL ELECTRICITY IN INDONESIA

• Main Author: Rizal, Mohamad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63016
• Institution: Institut Teknologi Bandung

Indonesia is blessed with abundance of geothermal energy potential. Ministry of Energy and Mineral Resources estimated that the potential for geothermal in Indonesia is around 23.9 GW. Meanwhile, as of November 2021, total installed capacity for geothermal power plant in Indonesia is only 2.1 GW (9% of potential). Current regulation on electricity tariff for geothermal power plant is capped by PT PLNs Power Generation Cost. The latest national level Power Generation Cost is 7.05 cents USS/kWh, of which there are variation among regionals. Therefore, with capped electricity price, a geothermal firm in Indonesia should elaborate options to develop and operate a geothermal power plant to be able to give a fair economic return to investor. To measure business conditions, the PESTLE framework is used to analyze the effect of external factors to the business environment, in addition, the framework of Porter’s Five Forces is performed to assess the attractiveness of geothermal industry. On the other side, the internal analysis of firm ability is using the VRIO framework to identify the level of the sustainable competitive advantage. Furthermore, key drivers in shareholder value network by Alfred Rappaport is used as framework to elaborate options to increase shareholder value. Business decisions such as: implementation of carbon credit, business consolidation and/or strategic partnering, going public (IPO) and issuance of green financing could help the economics of geothermal firm operating in Indonesia.