International Journal of Engineering Business
and Social Science
Vol. 1 No. 06, July-Augusts 2023, pages: 654-665
e-ISSN: 2980-4108, p-ISSN: 2980-4272
https://ijebss.ph/index.php/ijebss
654
Economic Analysis of Remaining Geothermal Reserves to Increase
Geothermal Power Plant Capacity in Achieving National Energy
Mix Target
Noval Suryadi
1
, Iwa Garniwa M. K.
2
1,2
Universitas Indonesia
Keywords
Abstract
Geothermal Proven
Reserves, Monte Carlo
Simulation, Net Present
Value
In order to meet the renewable energy mix target related to the installed capacity of
Geothermal Power Plants in 2025 of 7,200 MW, with the potential of geothermal
resources of 23,060 MW, only 2,360 MW has been utilized as a Geothermal Power Plant.
In the Geothermal Working Area "XYZ" there are potential geothermal reserves of 464
MW, but only 55 MW (12%) has been utilized as a Geothermal Power Plant. Increasing
the generating capacity in the "XYZ" Geothermal Working Area that has been operating
can reduce the risk level of geothermal resources, initial investment costs, and plant
construction time because the geothermal development process does not start from the
initial stage. The purpose of this study is to evaluate and analyze the investment in
geothermal power plant capacity development using Monte Carlo Simulation in
decision-making, by taking into account uncertain variables such as capacity factor,
interest rate, inflation, tax, proportion of equity financing, and construction period. The
analysis results show that the investment scheme for developing generating capacity by
maximizing geothermal reserves increases the probability of a positive Net Present
Value.
© 2023 by the authors. Submitted
for possible open access publication
under the terms and conditions of the Creative Commons Attribution (CC BY SA)
license (https://creativecommons.org/licenses/by-sa/4.0/).
1. Introduction
The continuous use of fossil energy will result in global problems, such as depletion of energy reserves,
thereby increasing the price of fossil fuels in the global market. In addition, the use of fossil fuels can cause
environmental damage that leads to global warming and climate change. Population growth can cause more severe
environmental damage, thus encouraging humans to explore and exploit fossil energy sources. The potential of
renewable energy in Indonesia is very diverse, including hydroelectricity, geothermal, wind, solar, and biomass.
However, in 2022, only 12.3% of the target of 23% of energy in 2025 will come from renewable energy sources
(Direktorat Jenderal EBTKE, 2023).