A Critical Review of Generation Expansion Planning based on Independent Power Producer Delay Problem in Indonesia

Abstract

Delay on the construction of independent power producer (IPP) power plants in Indonesia is caused by the use of inappropriate electricity market type, optimization method, and optimization program. A critical review of generation expansion planning (GEP) based on those factors is needed to analyze and mitigate the IPP delay. Therefore, this paper reviews and critically analyzes the previous studies related to those factors that are related and caused delays in the IPP development, along with alternative solutions that can be taken. Based on the review and analysis, it is found that PT. Perusahaan Listrik Negara (PLN) carried out a GEP for IPP planning using inappropriate electricity market type, optimization method, and GEP software. PT. PLN carried out the GEP using the WASP IV program based on a regulated market assumption. The WASP IV is appropriate for the regulated market but inappropriate for the deregulated market. Previous studies show that the GEP of IPP should be used as a deregulated market assumption, and the proper optimization method for the market is game theory. Therefore, game theory can be used as the optimization method to overcome the problem. The game theory can be modelled either by using proven or handmade software.