Professional Documents
Culture Documents
PLTM dan
PLTMH
a/o: 2016
Financing Possibilities
In-kind community participation
to aim for sustainable operation
Level 1
Public and Level 2 Level 3
government PPP
funding Private investment
4. Economic Analysis Methodology
The project with the highest incremental net benefit is the preferred
option from the economics point of view.
Time Value of Money
Costs and benefits can have very different values for society
or for the developer depending on when they occur.
Present values are better than the same values in the future,
and early returns are better than later returns.
In other words, we need less money in our pocket today if the
investment is due next year as compared with the same
investment payable now.
In order to take account of these facts in our economic and
financial analysis the concept of discounting project worth is
used.
Contoh Compound Interest
Tahun (n) Deskripsi IDR
1 Modal awal (Principal – P) 1.000.000
Bunga (i) di tahun ke 1: @ 5% 50.000
Nominal pada akhir tahun ke 1 1.050.000
2 Bunga di tahun ke 2: @ 5% 52.500
Nominal pada akhir tahun ke 2 1.102.500
3 Bunga di tahun ke 3: @ 5% 55125
xx Jumlah Nominal (S) pada akhir tahun ke 3 1.157.625
1
Discount Factor
(1 i)n
where:
i discount rate, must be absolute, not in %
(i.e.: 10% 0.1)
n number of periods (years) from the present (year 0) to
year n when the value occurs (end of that year)
Pengaruh Faktor Diskon
Discount rate : 10 %
Contoh investasi PLTD : 5 kW
Jam operasi : 10 jam/hari
Ketersediaan : 300 hari/tahun
Jam kerja : 3,000 jam/tahun
Produksi listrik tahunan : 15,000 kWh
Harga Solar (BBM) : 10,000 IDR/liter
Nilai kalor BBM : 10 kWh/liter
Opsi 1 Opsi 2
Harga per-kW USD 300 150
Efisiensi 30% 28%
Harga Unit USD 1,500 750
Kurs IDR/USD 13,500 13,500
Harga Unit IDR 20,250,000 10,125,000
Contoh: Pengadaan Disel
Tahun ke Pengeluaran
Opsi 1 Opsi 2
IDR IDR
0 20,250,000 10,125,000
1 52,437,500 54,968,750
2 52,437,500 54,968,750
3 52,437,500 54,968,750
4 52,437,500 54,968,750
Total cash-flow 230,000,000 230,000,000
0 1 2 n periode
𝑅
𝑃1 =
(1 + 𝑖)
𝑅
𝑃2 =
(1 + 𝑖)2
𝑃𝑛 =
𝑅 𝑖(1 + 𝑖)𝑛
(1 + 𝑖)𝑛 𝑅=𝑃
(1 + 𝑖)𝑛 −1
Payback period: Time in years from the beginning of the project until the time
when the sum of the revenues from electricity sales (and other income) equals
the capital invested for the project.
Break-even point: The break-even point is usually taken as the minimum
tariff level required at which annual revenues from electricity sales exceed the
cost of production. For a given tariff, the break-even point can also mean the
year when due to increasing electricity sales the annual revenue exceeds
annual costs.
Annuity: An annuity is an amount paid or received annually. With the annuity
method, all costs and revenues (benefits) are expressed in equal annual
amounts. This allows quick calculation of unit production costs, pay-back
period and break-even point.
Terminology (cont.)
Inflation: In order to simplify economic analysis, inflation-free
values should be used, i.e., costs and benefits should be stated at
current prices and interest / discount rates should be inflation
corrected.
Inflation corrected interest rates are called real as opposed to
nominal rates which include inflation.
(1 i)
real interest / discount rate i
*
1
(1 a )
where
i = discount rate (absolute, not in %)
a = inflation rate (absolute, not in %)
Inflation rate
Note: This simplification does not do away with the need to
make an estimate of the expected inflation rate over the project
period.
Historical trends may be extrapolated as a first
approximation
Predictions by the World Bank or other lending institutes
for a particular country may be consulted
Note: Different cost / benefit items of a project may have very
different escalation rates, e.g. the price of fuel may increase
faster as the salary cost of operators.
Simple Payback Method
• This method is categorized as a static method and does not look at benefits, it
only compares costs of the project and its alternatives.
• Divide the total cost of the investment by the projected annual cash inflow.
• If we predict different annual inflows during the payback period Take the
average of the cash inflows.
𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 𝑠𝑖𝑚𝑝𝑙𝑒 =
𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑠ℎ 𝑖𝑛𝑓𝑙𝑜𝑤𝑠
Wages
Engineer 42,000,000 Rp/th 1.35 56,519,221.42 2 % 1,130.38
Technician 21,000,000 Rp/th 1.35 28,259,610.71 25 % 7,064.90
Helper 12,000,000 Rp/th 1.35 16,148,348.98 100 % 16,148.35
Cost Fixed to Operation (B) 29,258.06
C. Recapitulation
Electricity Cost Breakdown
Total Cost (A+B) 443,321,469 Rp/a Capital 491.73 Rp/kWh 91.63 %
Energy Generated 826,080 kWh/a Maintenance 9.51 Rp/kWh 1.77 %
Operational 35.42 Rp/kWh 6.60 %
Average Electricity Cost 536.66 IDR/kWh ----------- ---------- ---------- ---
6.26 US₡/kWh Total 536.66 Rp/kWh 100.00 %
28
Case MHP 30kW
Case MHP 30kW
Cost-Benefit Analysis
All cash expenditure and revenues are tabulated during the
chosen period separately for each year.
A net benefit for each year can be calculated by subtracting
expenditure from revenue.
Each year’s net benefit is then discounted to the present
and cumulatively added to a single sum, the so-called net
present value (NPV) of the project.
This NPV is then compared with the NPV of alternatives.
The project with the highest NPV is the preferred option.
Discounted Cashflow Method
The net present value does not say anything about the
value of the project as compared to other infrastructure
projects (e.g. a road or a school). For this we can calculate
the internal rate of return (IRR) of a project.
Annual Energy
Operation & Total Energy Sell Gross Investment
Production Investment Net Cash-Flow
Maintenance Payback
Year total PLN Selling Tariff PLN Revenue
kWh/a IDR IDR/a kWh/a IDR/kWh IDR/a IDR/a IDR/a IDR/a
2004 0 -1,759,502,400 -1,759,502,400 -1,759,502,400 -1,759,502,400
2005 1 971,598 -39,957,293 886,098 443.46 392,948,830 392,948,830 352,991,537 -1,406,510,863
2006 2 971,598 -39,957,293 886,098 456.76 404,737,295 404,737,295 364,780,002 -1,041,730,861
2007 3 971,598 -39,957,293 886,098 470.47 416,879,414 416,879,414 376,922,121 -664,808,741
2008 4 971,598 -39,957,293 886,098 484.58 429,385,796 429,385,796 389,428,503 -275,380,238
2009 5 971,598 -39,957,293 886,098 499.12 442,267,370 442,267,370 402,310,077 126,929,839
2010 6 971,598 -39,957,293 886,098 514.09 455,535,391 455,535,391 415,578,098 542,507,937
2011 7 971,598 -39,957,293 886,098 529.51 469,201,453 469,201,453 429,244,160 971,752,097
2012 8 971,598 -39,957,293 886,098 545.40 483,277,496 483,277,496 443,320,203 1,415,072,300
2013 9 971,598 -39,957,293 886,098 561.76 497,775,821 497,775,821 457,818,528 1,872,890,828
2014 10 971,598 -39,957,293 886,098 578.61 512,709,096 512,709,096 472,751,803 2,345,642,631
2015 11 971,598 -39,957,293 886,098 595.97 528,090,369 528,090,369 488,133,076 2,833,775,706
Depreciation
Depreciation or the writing down of project assets need not be
taken into account when using the discounted cash-flow
method, because all costs and benefits throughout the service
life of the project are already included.
Exception: In the financial cash-flow analysis depreciation of
project assests can have an impact on profit taxes to be paid on
income generated by the project.
Remarks on discounted cash-flow
In the discounted cash-flow method the same period of years
must be used for each alternative project. For small-scale
hydropower schemes an analysis period of 20 to 25 years is
usually applied.
The alternatives must be able to supply the same demand
profile (both energy and peak power).
If the period of analysis is shorter than the service life of the
equipment then the discounted salvage value must be
deducted from expenditure.
Investment cost
Estimated investment costs for grid-connected small-scale
hydropower plants (example):
Section 3: Forebay
Total Section 3 (carried forward to summary Part A) Rp. 23,942,479
Operation and maintenance cost
Cost item Description Annual O&M costs in
% of capital cost
a) Personnel Operators, linesmen, according to local salary
revenue collectors (if levels
applicable)
b) Administration Insurance, customer according to local rules
service costs, land rent, and regulations
taxes, water fees, other
duties
c) Maintenance of civil materials (paint, cement, 0.2 to 1 % of capital costs
works (incl. access etc.) and local manpower of the civil works
roads, powerhouse,
fuel tanks etc. of diesel
power stations)
Operation and maintenance cost..
Cost item Description Annual O&M costs
in % of capital cost
d) Maintenance of E/M spare-parts and salaries of 1 to 3 % of capital costs of
equipment local fitters, electricians E/M equipment of MHP
e) Maintenance of spare parts and repairs of 1 to 3 % of capital costs of
electrical gear of switch gear, control panels, diesel switch gear,
diesel generators transformers transformers etc.
f) Maintenance of bush cutting, fuses, 1 to 3 % of capital costs of
transmission & insulators, cross-arms, poles T&D
distribution works
g) Overheads of communications, postage, according to local
electricity utility or staff housing, head office conditions
local operator charges, management costs
Specific O&M Variable Costs
Cost item Description Specific costs
High-speed a) Fuel consumption of high-speed 0.28 - 0.40 l/kWh of
diesel diesel generators diesel fuel (costs for fuel
generators transport, storage and
handling to be included)
8
[USc/kWh]]
6
Electricity
0
2,000 2,500 3,000 3,500 4,000
Specific Investment Cost [USD/kW]
Ex: Sensitivity of O&M cost
Cost
(US₡/kWh) 12
10
Production
8
[USc/kWh]]
Cost
6
Energy
Electricity
4
Average
0
1 2 3 4 5
Annual O&M Cost [% of Investment]
Ex: Sensitivity of plant capacity factor
12
(US₡/kWh)
CostProduction Cost 10
8
[USc/kWh]]
6
Energy
Electricity
4
Average
0
55 60 65 70 75
Plant Capacity Factor [%]
Ex: Sensitivity of Plant Availability
12
Average Energy Production Cost
Cost (US₡/kWh)
10
8
[USc/kWh]]
6
Electricity
0
90 91 92 93 94 95 96 97 98 99 100
Plant Availability [%]
Ex: sensitivity of interest rate
8
[USc/kWh]]
6
Electricity
0
6 8 10 12 14
Discount Rate [%]
Ex: Sensitivity of Service Life
12
0
0 10 20 30 40 50
Service Life [years]
6. Common deficiencies in E&F analyses