FINANCIAL FEASIBILITY STUDY OF GAS ENGINE POWER PLANT FUELED BY LANDFILL GAS - CASE STUDY PT XYZ

• Main Authors: , Mohammad Riza, ST., , Prof. Dr. Abdul Halim, MBA
• Format: Theses and Dissertations NonPeerReviewed
• Published: [Yogyakarta] : Universitas Gadjah Mada 2012
• Subjects: ETD
• Online Access: https://repository.ugm.ac.id/98282/; http://etd.ugm.ac.id/index.php?mod=penelitian_detail&sub=PenelitianDetail&act=view&typ=html&buku_id=52156
• Institution: Universitas Gadjah Mada

Waste to energy or landfill gas to energy project is one of solution to overcome lack of electric supply and environment problems caused by municipal waste disposal. Landfill gas is methane gas (CH4) produced from decomposition process of organic waste by anaerobic bacteria that could be supplied as fuel of gas engine to generate electric power. Landfill gas power generation is one of solution in providing electric power from renewable energy in Indonesia especially in dense population city such as Jakarta and Surabaya. Big population will supply big volume of organic waste and creating bigger opportunity to running waste to energy project. The Surabaya�s Benowo Municipal Solid Waste Disposal is receiving approximately 1,200 ton of waste per day with containing 75 percent organic waste such as paper, wood, food waste and vegetable. With average rate disposal as above number, since opened in 2001 until plan to closed in 2015, Benowo MSW disposal cumulatively could produce 210,466 Ton of CH4 in 2035. It is equivalent with 11,077,164.01 MMBTU and potentially could be converted to 1,303,195,765.96 kWh electric powers. The supplied landfill gas to the power plant can generate 6.96 MW of electricity by using 3 set of 2,731 kW gas engines along 20 years of operation. The availability of landfill gas supply, growth of electric needs in the near future, opportunity in generating revenue not only from selling electric production but also from selling CER (Certified Emission Reduction) scheme under Clean Development Mechanism, as well as supportive business environment under new law number 30 / 2009 concerning Electricity (UU No 30 Tahun 2009 Tentang Ketenagalistrikan) is creating supportive investment environment and attracting several business entities to carry out investment in this segment. This thesis tries to analyze whether Benowo landfill gas power generation is a kind of financially feasible and profitable project to execute or not. The financial feasibility analysis is carried out by using sensitivity analysis with considering variance data of plant capacity, selling price of electric production and cost of debt within several combination scenarios: worst, base and best scenario to calculate Project�s NPV, Payback Period, Discounted Payback Period, IRR, MIRR and Profitability Index. In normal condition or base condition scenario: plant capacity 85%, selling price USD 0.089 per kWh, cost of debt 8% and WACC 10.70%, the revenue projection is USD 5,070,706.62 yearly and will generate project�s NPV as much as USD 5,703,608.49, payback period is in 6 th year, discounted payback period is in 8 th year, providing IRR at 19.97%, MIRR at 13.45% and PI at 1.61. Based on sensitivity analysis result in normal condition or base condition scenario, Benowo Landfill Power Generation Project is an attractive project and feasible to executed for.