Economic Analysis of the 55 MWe Gedongsongo Geothermal Power Plant Project

One of the eco-friendly renewable energies with high potential in Indonesia is geothermal. Indonesia's geothermal energy potential is recorded at 28,579 MW but has only been utilized for electricity generation of around 1,948.5 MW. Investment in geothermal power plants is an investment that is capital intensive with high investment risk factors. This study aims to determine the financial feasibility of investing in geothermal power plants in the Gedongsongo geothermal field with 55 MWe of potential electrical energy. Besides, research is conducted to find out from the beginning of the project implementation to the end of the project's economic life and to determine the feasibility level of the financial feasibility of investment in the project.The inflation rate for operating costs such as operation and maintenance (O&M) make up well drilling and overhaul is assumed to be 2% per year. Project financing is assumed to originate from personal capital of 30% and loans of 70%. To get the value of the internal rate of return on personal capital or the equity of internal rate of return by PLN (the sole provider of electricity in Indonesia) standards of 14%, the electricity tariff for the Gedongsongo Geothermal power plant is 11.48 cent/ kWh.