ECONOMIC EVALUATION IN THE SELECTION OF POWER PLANTS

• Main Author: Ova Triandi, Adrian
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/65072
• Institution: Institut Teknologi Bandung

Based on the 2020-2029 PLN Batam Electricity Business Plan, it is planned that several diesel power plants will be decommissioned starting in 2023 while maintaining an average reserve margin of 14.5%. The highest load on the Batam-Bintan Electricity System in 2019 was recorded at 483.7 MW with a total capacity of 594.18 MW or 18.5% of the reserve margin. Considering that some of these existing power plants are diesel-powered, new power plants are needed to replace diesel power plants that will be decommissioned and maintain an average reserve margin of 14.5%. Although PLN Batam chooses a gas engine as a power plant, a financial analysis test needs to be carried out to assess whether it is feasible or not by comparing other available options such as diesel and dual-fuel engines. A construction project is considered financially feasible if it produces a positive NPV and IRR on Equity above 12% using Discounted Cash Flow with an electricity tariff is set at 8.7511 cents USD/kWh based on the Minister of Energy and Mineral Resources of the Republic of Indonesia's Decree No. 55 of 2019. Based on the analysis conducted, the best results of NPV, IRR on Project, and IRR on Equity are in the selection of the Gas Engine type. The Dual Fuel Engine option could be considered as the results of the IRR on the Project and the IRR on Equity were positive, although below expectations of 12% and the NPV was negative. The Diesel Engine option does not appear to be financially viable for this project.