IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v219y2023ip1s0960148123012983.html
   My bibliography  Save this article

Carbon credit and economic feasibility analysis of biomass-solar PV-battery power plant for application in Indonesia remote area

Author

Listed:
  • Susilowati, Yuliana
  • Hardiyasanti, Dindamilenia Choirunnisa
  • Widianingrum, Sinta
  • Endrasari, Fitri
  • Djamari, Djati Wibowo
  • Bahar, Aditiya Harjon
  • Wahono, Jaya
  • Veza, Ibham

Abstract

The trend in the utilization of renewable energy is increasing worldwide, including in Indonesia. However, as an archipelago country, Indonesia is experiencing challenges in empowering its remote areas with green electricity. This study assesses economically the idea of a hybrid power plant of solar and/or biomass to alleviate remote areas electrification in Indonesia. The project is proposed in Sakti, Batukandik, and Batumadeg, in Nusa Penida, Bali. The project's ER is evaluated by CDM methodology; it is approximately 22,371.32 tCO2/year and potentially adds USD 447,426,32 annually. Afterwards, IRR and NPV are computed under two scenarios to access the worthiness of the project. IRR and NPV remain profitable after the electricity tariff reduction due to the additional carbon credits and biochar sales. Carbon credits alone contribute a slight improvement to the economic performance, yet it cannot be neglected. SA is then used to see the effect of feedstock price, electricity tariff, biochar sales, CAPEX/MW, and carbon credit towards IRR and NPV. Then, ERR is assessed to determine this project's feasibility and profit for the communities involved. The ERR value with and without the application of carbon credits are 32.66% and 28.19%, respectively. Moreover, this project can increase job opportunities by 62.60%. These values are obtained from several parameter calculations in the ERR analysis in this study, which include a producer surplus, costumer surplus, and job increase. The results of this study are expected to bring a contribution to the sustainable development goals and national economic activities in Indonesia.

Suggested Citation

  • Susilowati, Yuliana & Hardiyasanti, Dindamilenia Choirunnisa & Widianingrum, Sinta & Endrasari, Fitri & Djamari, Djati Wibowo & Bahar, Aditiya Harjon & Wahono, Jaya & Veza, Ibham, 2023. "Carbon credit and economic feasibility analysis of biomass-solar PV-battery power plant for application in Indonesia remote area," Renewable Energy, Elsevier, vol. 219(P1).
    • Handle: RePEc:eee:renene:v:219:y:2023:i:p1:s0960148123012983
    DOI: 10.1016/j.renene.2023.119383
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148123012983
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2023.119383?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Berrada, Asmae, 2022. "Financial and economic modeling of large-scale gravity energy storage system," Renewable Energy, Elsevier, vol. 192(C), pages 405-419.
    2. Odou, Oluwarotimi Delano Thierry & Bhandari, Ramchandra & Adamou, Rabani, 2020. "Hybrid off-grid renewable power system for sustainable rural electrification in Benin," Renewable Energy, Elsevier, vol. 145(C), pages 1266-1279.
    3. Zhang, Lihui & Li, Songrui & Nie, Qingyun & Hu, Yitang, 2022. "A two-stage benefit optimization and multi-participant benefit-sharing strategy for hybrid renewable energy systems in rural areas under carbon trading," Renewable Energy, Elsevier, vol. 189(C), pages 744-761.
    4. Tsokolis, D. & Tsiakmakis, S. & Dimaratos, A. & Fontaras, G. & Pistikopoulos, P. & Ciuffo, B. & Samaras, Z., 2016. "Fuel consumption and CO2 emissions of passenger cars over the New Worldwide Harmonized Test Protocol," Applied Energy, Elsevier, vol. 179(C), pages 1152-1165.
    5. Seo, Su Been & Go, Eun Sol & Ling, Jester Lih Jie & Lee, See Hoon, 2022. "Techno-economic assessment of a solar-assisted biomass gasification process," Renewable Energy, Elsevier, vol. 193(C), pages 23-31.
    6. Gordon Hazen & Carlo Alberto Magni, 2021. "Average internal rate of return for risky projects," The Engineering Economist, Taylor & Francis Journals, vol. 66(2), pages 90-120, April.
    7. Leite, Gustavo de Novaes Pires & Weschenfelder, Franciele & Farias, João Gabriel de & Kamal Ahmad, Muhammad, 2022. "Economic and sensitivity analysis on wind farm end-of-life strategies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    8. Ye Duan & Zenglin Han & Hailin Mu & Jun Yang & Yonghua Li, 2019. "Research on the Impact of Various Emission Reduction Policies on China’s Iron and Steel Industry Production and Economic Level under the Carbon Trading Mechanism," Energies, MDPI, vol. 12(9), pages 1-26, April.
    9. Mirzania, Pegah & Ford, Andy & Andrews, Deborah & Ofori, George & Maidment, Graeme, 2019. "The impact of policy changes: The opportunities of Community Renewable Energy projects in the UK and the barriers they face," Energy Policy, Elsevier, vol. 129(C), pages 1282-1296.
    10. Borhanazad, H. & Mekhilef, S. & Saidur, R. & Boroumandjazi, G., 2013. "Potential application of renewable energy for rural electrification in Malaysia," Renewable Energy, Elsevier, vol. 59(C), pages 210-219.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hongpeng Guo & Zhihao Lv & Junyi Hua & Hongxu Yuan & Qingyu Yu, 2021. "Design of Combined Auction Model for Emission Rights of International Forestry Carbon Sequestration and Other Pollutants Based on SMRA," Sustainability, MDPI, vol. 13(20), pages 1-18, October.
    2. Tang, Shengwen & Chen, Jingtao & Sun, Peigui & Li, Yang & Yu, Peng & Chen, E., 2019. "Current and future hydropower development in Southeast Asia countries (Malaysia, Indonesia, Thailand and Myanmar)," Energy Policy, Elsevier, vol. 129(C), pages 239-249.
    3. Grzegorz Ślusarz & Barbara Gołębiewska & Marek Cierpiał-Wolan & Jarosław Gołębiewski & Dariusz Twaróg & Sebastian Wójcik, 2021. "Regional Diversification of Potential, Production and Efficiency of Use of Biogas and Biomass in Poland," Energies, MDPI, vol. 14(3), pages 1-20, January.
    4. Wang, Jianjun & Liu, Fang & Li, Li & Zhang, Jian, 2022. "More than innovativeness: Comparing residents’ motivations for participating renewable energy communities in different innovation segments," Renewable Energy, Elsevier, vol. 197(C), pages 552-563.
    5. Mensah, Johnson Herlich Roslee & dos Santos, Ivan Felipe Silva & Tiago Filho, Geraldo Lúcio, 2023. "A critical analysis of the energy situation in the Benin Republic and its evolution over the last decade," Renewable Energy, Elsevier, vol. 202(C), pages 634-650.
    6. Alsharif, Mohammed H. & Nordin, Rosdiadee & Ismail, Mahamod, 2016. "Green wireless network optimisation strategies within smart grid environments for Long Term Evolution (LTE) cellular networks in Malaysia," Renewable Energy, Elsevier, vol. 85(C), pages 157-170.
    7. Xia, Wanjun & Murshed, Muntasir & Khan, Zeeshan & Chen, Zhenling & Ferraz, Diogo, 2022. "Exploring the nexus between fiscal decentralization and energy poverty for China: Does country risk matter for energy poverty reduction?," Energy, Elsevier, vol. 255(C).
    8. Yassine Charabi & Sabah Abdul-Wahab & Abdul Majeed Al-Mahruqi & Selma Osman & Isra Osman, 2022. "The potential estimation and cost analysis of wind energy production in Oman," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5917-5937, April.
    9. Alejandro López-González & Bruno Domenech & Laia Ferrer-Martí, 2021. "Sustainability Evaluation of Rural Electrification in Cuba: From Fossil Fuels to Modular Photovoltaic Systems: Case Studies from Sancti Spiritus Province," Energies, MDPI, vol. 14(9), pages 1-17, April.
    10. Hirsh Bar Gai, Dor & Shittu, Ekundayo & Attanasio, Donna & Weigelt, Carmen & LeBlanc, Saniya & Dehghanian, Payman & Sklar, Scott, 2021. "Examining community solar programs to understand accessibility and investment: Evidence from the U.S," Energy Policy, Elsevier, vol. 159(C).
    11. Ana Tereza Andrade Borba & Leonardo Jaime Machado Simões & Thamiles Rodrigues de Melo & Alex Álisson Bandeira Santos, 2024. "Techno-Economic Assessment of a Hybrid Renewable Energy System for a County in the State of Bahia," Energies, MDPI, vol. 17(3), pages 1-18, January.
    12. Chinna Alluraiah Nallolla & Vijayapriya Perumal, 2022. "Optimal Design of a Hybrid Off-Grid Renewable Energy System Using Techno-Economic and Sensitivity Analysis for a Rural Remote Location," Sustainability, MDPI, vol. 14(22), pages 1-25, November.
    13. Abdullah Al Abri & Abdullah Al Kaaf & Musaab Allouyahi & Ali Al Wahaibi & Razzaqul Ahshan & Rashid S. Al Abri & Ahmed Al Abri, 2022. "Techno-Economic and Environmental Analysis of Renewable Mix Hybrid Energy System for Sustainable Electrification of Al-Dhafrat Rural Area in Oman," Energies, MDPI, vol. 16(1), pages 1-23, December.
    14. Mahmoud H. Elkholy & Tomonobu Senjyu & Mohammed Elsayed Lotfy & Abdelrahman Elgarhy & Nehad S. Ali & Tamer S. Gaafar, 2022. "Design and Implementation of a Real-Time Smart Home Management System Considering Energy Saving," Sustainability, MDPI, vol. 14(21), pages 1-22, October.
    15. Pirjola, Liisa & Kuuluvainen, Heino & Timonen, Hilkka & Saarikoski, Sanna & Teinilä, Kimmo & Salo, Laura & Datta, Arindam & Simonen, Pauli & Karjalainen, Panu & Kulmala, Kari & Rönkkö, Topi, 2019. "Potential of renewable fuel to reduce diesel exhaust particle emissions," Applied Energy, Elsevier, vol. 254(C).
    16. Song, Jingeun & Cha, Junepyo, 2022. "Development of prediction methodology for CO2 emissions and fuel economy of light duty vehicle," Energy, Elsevier, vol. 244(PB).
    17. García-Villoria, Alberto & Domenech, Bruno & Ferrer-Martí, Laia & Juanpera, Marc & Pastor, Rafael, 2020. "Ad-hoc heuristic for design of wind-photovoltaic electrification systems, including management constraints," Energy, Elsevier, vol. 212(C).
    18. Lode, M.L. & te Boveldt, G. & Coosemans, T. & Ramirez Camargo, L., 2022. "A transition perspective on Energy Communities: A systematic literature review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 163(C).
    19. Renzi, Massimiliano & Nigro, Alessandra & Rossi, Mosè, 2020. "A methodology to forecast the main non-dimensional performance parameters of pumps-as-turbines (PaTs) operating at Best Efficiency Point (BEP)," Renewable Energy, Elsevier, vol. 160(C), pages 16-25.
    20. Elkadeem, Mohamed R. & Kotb, Kotb M. & Abido, Mohamed A. & Hasanien, Hany M. & Atiya, Eman G. & Almakhles, Dhafer & Elmorshedy, Mahmoud F., 2024. "Techno-enviro-socio-economic design and finite set model predictive current control of a grid-connected large-scale hybrid solar/wind energy system: A case study of Sokhna Industrial Zone, Egypt," Energy, Elsevier, vol. 289(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:219:y:2023:i:p1:s0960148123012983. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.