Abstract
Indonesian villages are facing dangerous condition. Every year, young people are deserting the villages. To overcome this problem, Tangsi Jaya hamlet, West Java, has been provided with 18 kW micro-hydro to supply electricity both to the community and to Small Processing Center for ground coffee production. Results of cash flow analysis for ground coffee in Tangsi Jaya hamlet, with total investment of IDR 110 750 000 and discount rate of 18 % for 5 yr. Banyumeneng I hamlet, Yogyakarta with an investment cost IDR 95 000 000 and production cost of IDR 34 195 000 yr–1 and the interest rate of 14 % yr–1, the payback period was estimated to be 3 yr with ROI of 40 %. PEST analysics indicate that the higher electricity tariff and interest rate while the higher the value of technology and number of people involve with the SPC will result in the bigger value of ROI. Renewable energy technology could be used for value added activities in rural areas, create small industries, provide job opportunities to the local people and create conditions for sustainable economic development. However, vigilance is needed because small industries can also cause pollution because they produce waste
Highlights
Indonesian villages face dangerous conditions if corrective action cannot be taken immediately
Villages in rural areas are blessed with abundant renewable energy sources such as solar, wind, hydro and biomass which may be converted into power and thermal energy
A1 = -0.001, a2 = -0.014, a3 = 0.0047 and a4 = 0.077 which indicate that the higher electricity tariff and interest rate while the higher the value of technology and number of people involve with the Small Processing Center (SPC) will result in the bigger value of ROI
Summary
Indonesian villages face dangerous conditions if corrective action cannot be taken immediately. If this trend will continue, there is a consequence that only old peoples remain in the villages and have to take the responsibility to feed the nation with food enough to balance the ever increasing number of its population. In order to prove this postulate three hamlets have been chosen, one each in West Java, in Special Region of Jogjakarta and in West Nusa Tenggara, Indonesia [1,2,3,4,5] Survey to these hamlets were conducted to collect data on the availability of renewable energy sources as well as leading economic sectors determined by construction of each I/O Tables for the chosen hamlet [6, 7]. The PEST analysis will be used to determine the proper policy on electricity tariff to be imposed, the economic aspect regarding the interest rate of loan, social awareness on number of people involve in the business venture and the technology being used in order to ensure sustainable development
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