ECONOMIC VALUATION ANALYSIS OF FLOATING PHOTOVOLTAIC POWER PLANTS USING MULTIVARIABLE RISK-BASED FINANCIAL MODELING

Abstract

Indonesia has set an ambitious target to reduce carbon emissions in the energy sector to 358 million tons of CO2 by 2030, as stated in the press release of the Ministry of Energy and Mineral Resources (ESDM). This target aligns with the international commitment under the Paris Agreement, which aims to limit global warming to 1.5°C by significantly reducing greenhouse gas emissions. Therefore, Indonesia must transition to renewable energy sources, such as solar energy, to meet the growing energy demand while supporting global climate control efforts. This study aims to analyze the risks and economic feasibility of the floating solar photovoltaic (FPV) project at the Mrica Reservoir using literature data and Monte Carlo-based economic simulations. The evaluation focuses on feasibility indicators such as NPV, IRR, and PIR with a 95% confidence level. The risk analysis results identify 8 potential risks that could impact the project's economic value, with the most significant risks being Trash, Flood, and Sedimentation, Electricity Sale, and Degradation Performance.