Techno-economic analysis with financial risk identification for solar power plant as post-mining land use in Indonesia

Ronyastra, I Made and Saw, Lip Huat and Low, Foon Siang (2024) Techno-economic analysis with financial risk identification for solar power plant as post-mining land use in Indonesia. Energy for Sustainable Development, 80. 101462/1-11. ISSN 0973-0826; E-ISSN 2352-4669

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Abstract

Post-mining land usage (PMLU) is a critical concern in Indonesia as the country needs to figure out alternatives for repurposing mined land into productive activities which could utilize the available potential. This paper analyzed the technical feasibility, economic viability, socioeconomics, and environmental impact of building a solar power plant as a post-mining land use option. Solar energy generation potential near the equator line can complement the land availability after coal mining operations cease. The technical analysis, financial model, and Monte Carlo simulation were conducted for the techno-economic analysis. The 300 MWp project was estimated to be able to generate 464 gigawatt-hours annually with a setup cost of around 3.1 trillion Rupiah (USD 200 million). The base case net present value (NPV) was 437 billion rupiah (USD 28 million), while the discounted payback period (DPP) was 13 years, suggesting the viability of the project. The simulation results returned 93.99 % certainty that the NPV would be positive, and 94.71 % certainty the DPP would be <25 years. The sensitivity analysis revealed that the top financial risk factors are loan interest, tax rate, feed-in tariff, operating cost, structure cost, array efficiency, solar irradiance, and inflation rate. Solar irradiance and inflation rate are systematic risks that cannot be controlled internally, and array efficiency is limited by 100 %. Five risk factors could be internally managed: loan interest, tax rate, feed-in tariff, operating cost, and structure cost. Furthermore, this system would offer additional socio-economic and environmental benefits such as job creation, biodiversity preservation, and pollution reduction. The system would generate 281,780 tCO2 annual GHG emission savings.

Item Type:	Article
Uncontrolled Keywords:	Solar power plant; Techno-economic; Indonesia; Monte Carlo simulation; Post mining land usage
Subjects:	T Technology > T Technology (General) T Technology > TA Engineering (General). Civil engineering (General)
Divisions:	Faculty of Engineering > Department of Industrial Engineering
Depositing User:	I MADE RONYASTRA
Date Deposited:	21 May 2024 07:40
Last Modified:	21 May 2024 07:40
URI:	http://repository.ubaya.ac.id/id/eprint/46384

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