The Use of Life Cycle Cost Analysis to Determine the Most Effective Cost of Installation of 500 kV Java-Sumatra Power Interconnection System

In order to transfer 3000-MW capacity of electricity from the mine-mouth coal-fired power plants in South Sumatra to the load center in Java, PLN Indonesia intends to build the Java-Sumatra Power Interconnection System. The scopes of these works of the Power Interconnection System are including: high voltage alternating current (HVAC) 500 kV Transmission Line in Java, HVAC 500 kV Transmission Line in Sumatra, high voltage direct current (HVDC) 500 kV Transmission Line in Java, HVDC 500 kV Transmission Line in Sumatra, and HVDC 500 kV Java-Sumatra submarine cables. This paper will analyze the financial feasibility study to ensure whether the project has economic benefit, and the asset would be used effectively and efficiently along its benefit period using life cycle cost analysis (LCCA). In this paper, an LCCA will be simulated to analyze three alternatives and to decide which alternative is the most profitable. Monte Carlo simulations and a break-even chart for a period of 30 years’ operation of the interconnection system are part of the LCCA models to achieve the objectives of this paper.