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Economic Indicators Assessment of
NPP Project in Indonesia
Suparman
Centre for Nuclear Energy Development
INTRODUCTION
• Indonesia has performed:
• economics assessment using INPRO Methodology within its 2012-
2014 NESA project
• economics assessment in the feasibility study for NPP project in
Bangka in 2012-2013
• In the FS: The evaluation uses the IEA’s long-term CO2
trade price forecast to convert the CO2 reduced amount by
a NPP as money value
3
Bangka NPP Feasibility Study
Bangka Sites:
Feasibility study
(2011-2013)
CONSTRUCTION
Deeply - costly
Construction cost
No. Item
NPP
(W.Bangka)
NPP
(S.Bangka)
1. M & E system cost 6107 6107
2. Building cost 659 571
3. Civil cost 1060 987
4. Initial core fuel cost 553 553
5. Contingency 1,676 1,644
6. Owner’s cost 1,398 1,385
7. IDC 1,467 1,442
8. VAT 1175 1154
Total (Unit cost: USD/kW) 14,095
(5,972)
13,843
(5,866)
(million USD)
Owner Cost
No. Item
Cost (million USD)
NPP
(W. Bangka)
NPP
(S. Bangka)
1 Electricity supply system 8 8
2 Temporary house cost on site 6 6
3 Cost for land resettlement,
compensation 52 52
4 Project management cost 16 15
5 Consultancy cost 64 62
6 Miscellaneous costs 26 25
7 Transmission between Java and
Sumatra 1126 1118
8 Training center 98 98
9 Cost of land 2 1
Total 1398 1385
Generation cost
LCOE = Σt [ (Ct + Ot + Ft + Dt) x (1+r)-t ] / Σt [ Et x (1+r)-t ]
With:
Ct = Capital cost in the year t
Ot = Operation and maintenance (O&M) cost in the year t
Ft = Fuel cost in the year in t
Dt = Decommissioning cot in the year t
Et = Electricity generation in the year t
r = Discount rate
Capital cost components
1) Depreciation cost
Depreciation in the generation cost is a method of expensing the value of fixed assets,
and the means to recover the invested capital. In this study, the 20 years is regarded
as useful life based on Indonesian law, and the specified amount is evenly
depreciated every year for the period.
2) Interest payment
Interest of the loan is added to the generation cost in case of raising funds from
outside. The interest rate applied is 2.73 %, and the repayment terms is regarded as
18 years.
3) Fixed asset tax
As for the lands and buildings, 0.5 % of the net taxable amount is subject to the fixed assets taxation according to the tax law of Indonesia.
Interest rate
• Interest rate and repayment period for nuclear power project refers to:
Commercial Interest Reference Rates (CIRRs) - OECD The
Arrangement for Officially Supported Export Credits as May 2013 for
US dollar
• In year 2014 CIRRs for US Dollar:
Technical and Economic Parameter
Plant output : 1,180MWe
Internal consumption : 5%
Availability : 93%
Economic Lifetime : 40 years
Discount rate : 10%
Generation cost
No. Item
Cost (UScent/kWh)
NPP
(W. Bangka)
NPP
(S. Bangka)
1. Capital cost 3.60 3.53
2. Operation and maintenance cost 1.10 1.10
3. Fuel costs 1.22 1.22
4. Decommissioning cost 0.17 0.17
Total 6.14 6.01
Economic Evaluation Methodology
• The alternative thermal power method is applied to this evaluation.
When the electricity supply is set to economic benefit, then, how
the same benefit could be obtained by different ways. The expense
which is necessary to obtain, it is defined as “benefit” (B).
• On the other side, any cost to install and operate a NPP in
Indonesia is set to “cost” ( C). The cost includes any NPP specific
costs, such as policy cost, any possible risk measure
expenditures.
• The balance of (B) and (C) is considered to be the benefit which is
brought by NPP introduction into Indonesia. With this balance,
Economic evaluation is conducted by calculating Economic IRR
(EIRR) and NPV.
CO2 PRICE ASSUMPTION
Years High/2DS Low
2020 30 10
2025 55 17
2030 80 24
2035 95 30
2040 110 35
2045 120 38
2050 130 41
0
20
40
60
80
100
120
140
2020 2025 2030 2035 2040 2045 2050
High/2DS
Low
USD/tCO2
Economic Indicators
Parameter NPP (W. Bangka) NPP (S. Bangka)
NPV 2,156 2,285
IRR 13.1% 13.4%
Parameter NPP (W. Bangka) NPP (S. Bangka)
NPV -1,550 -1,421
IRR 7.3% 7.5%
Based on High price of CO2
Based on Low price of CO2
Economic Assessment using INPRO
Methodology
• Investment cost of NPP (including owner and contingency cost ) :
5254 USD/kWe
• Selling price of Electricity : 12 cent/kWh*
• Economic indicators:
* Average electricity tariff per 1 September become 1280 Rp/kWh or 11.6
cent/kWh (1 USD = 11,000 Rp)
Parameter Selling price (cent$/kWh)
12 11.6
LUEC 11.7Cent/kWh 11.7Cent/k
IRR 10.13% 9.75%
ROI 16.06% 15.44%
Sensitivity analysis
Discount Rate (%)
3.7 5 8 10
LUEC (c$/kWh) 6.39 7.27 9.7 11.7
CFPP : USD 1.250/kW
CCPP : USD 850/kW
GTPP : USD 600/kW
GEOPP : USD 1.600/kW
(Power Plant Only)
OVERNIGHT COST
Coal : USD 70/ton
Gas : USD 6/MMBTU
HSD : USD 80/barrel
Geo. steam : USD 4,2 c/kWh
FUEL PRICE
ASSUMPTIONS: L evelized C os t [c /kWh]
8.04
18.33
10.12
7.256.33
-
2
4
6
8
10
12
14
16
18
20
C OA L G A S (C C ) L NG (C C ) OIL G E OT HE R MA L
C apex IDC F uel C ost O &M C ost
Source: PLN
Levelized Cost of Electricity Generation for Different Technologies [c/kWh]
Conclusion
• Based on the Feasibility Study, NPP project in Indonesian highly
depends on the CO2 price market. In CO2 price low scenario, NPP
does not seem to be beneficial from the view of Indonesian
economy. This is because some costs (risk cost and policy cost)
are considered in the study.
• Based on assessment using INPRO methodology indicate that
NPP with total capital cost of 4765 USD/kWe seem to be attractive
when selling price is 12 USD cent/kWh
THANK YOU