Economic analysis of renewable energy power plant in Sumatra, Indonesia

With the increase of Indonesian economy every year, it causes an increase in electricity consumption. Increased use of electricity, must be balanced with the growth of electricity generation. Indonesia is a country that has enormous renewable energy potential, but has not been utilized optimally for electricity generation, so the opportunity to invest in renewable energy in Indonesia is still wide open. To increase the interest of investors the government has issued regulations regarding the selling price of electricity based on the type and location of the power plant. In this paper, we will calculate the payback period of each type of renewable energy power plant in each province on Sumatra Island. Calculations were performed assuming a rate of 10%/year for 7 years, a loan of 70% of the total investment and a capacity of 1 MW for all types of plants. Based on the calculation, the results show that Bangka Belitung is the province with the fastest payback period of each type of power plant. The highest selling price of electricity is IDR 2,077 and the lowest is IDR 1,025. Types of power plants with the most rapid payback period derived from geothermal energy are 3 years. As for the longest payback period derived from biomass power plants is 15.6 years.