Financial Feasibility Analysis of the Relocation of the 2 X 30 Mw PLTG from East Halmahera to Bintan (Case Study: PT PLN Nusantara Power)
Abstract
The growth in electricity demand on Bintan Island shows a significant upward trend, while the current electricity system still relies on the Batam-Bintan interconnection and diesel-based backup generators with relatively high operating costs. To bridge the potential power deficit in the period before the interconnection and new generators are operational, PT PLN Nusantara Power plans to relocate the Haltim ex-Batanghari 2x30 MW gas-fired power plant to the Bintan system. This study aims to analyze the financial feasibility of the relocation project as a basis for investment decision-making. The research used a quantitative descriptive approach based on case studies with a financial feasibility analysis using Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PP), and Benefit Cost Ratio (BCR) indicators. The analysis was conducted using two electricity selling price schemes: the existing Basic Electricity Tariff (TDL) scheme and a tariff scheme based on the target rate of return on investment (target IRR). Furthermore, a sensitivity analysis was conducted to changes in investment costs, electricity selling price, gas fuel price, capacity factor, and project life to assess the project's financial resilience. The results of the study indicate that in the electricity selling price scheme based on TDL, the relocation project is declared financially unfeasible because it produces a negative NPV, an IRR lower than the Weighted Average Cost of Capital (WACC), and a BCR less than one. In contrast, in the target IRR-based tariff scheme, the project meets the feasibility criteria with a positive NPV, an IRR higher than the WACC, a BCR greater than one, and an investment payback period still within the project's lifespan. However, the results of the sensitivity analysis indicate that the project has a high level of sensitivity to changes in electricity tariffs and gas fuel prices.
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DOI: https://dx.doi.org/10.30659/jrbi.v23i2.53053
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