LCOE vs PV Penetration in Indonesia De-dieselization Program

Abstract

The conversion of fossil fuel power plants to green and renewable power plants has been gaining traction in many countries to ensure access to an affordable, reliable, sustainable, and modern energy source. Recently, the de-dieselization program is one of the programs carried out by the Government of Indonesia through its state-owned electricity company, namely PLN, to convert diesel-powered electricity to green and sustainable hybrid PV-BESS power plants to electrify their remote and off-grid islands. However, this investment in hybrid PV-BESS power plants needs to be analyzed to see its attractiveness compared to the local electricity tariff. One of the methods is by analyzing the Levelized Cost of Electricity (LCOE) of the hybrid Diesel-PV-Battery that is proposed in the de-dieselization program. As PV is variable renewable energy, the amount of PV penetration that goes into the system will highly depend on the size of the BESS. The higher PV penetration, the higher the BESS capacity which, therefore, the higher the LCOE. This paper studies the LCOE of the hybrid diesel-PV-BESS power plant with variation of PV penetration that can go into the system. From this study, it can be observed that it is essential to determine the PV-Battery capacity to achieve the lowest LCOE for a specific PV penetration. It also can be noted that when the PV penetration goes beyond 90%, especially if it goes to 100%, there is a substantial increase in LCOE since the PV-Battery required capacities also increase significantly. In this study, the optimum value of LCOE is 33.5 cUSD/kWh. This optimum LCOE can be achieved in 97% PV penetration with PV capacity of 12,118 kWp, PCS capacity of 8,250 kWh, and battery capacity of 24,750 kWh.