RESOURCE ASSESMENT

In geothermal projects, apart from conducting survey activities, it is also

necessary to conduct financial analysis to find out whether the project is profitable
or not if it is realized. There are various methods used to assess whether a project
is financially viable or not, and the most commonly used are the Net Present
Value (NPV) and internal rate of return (IRR) methods. If the value of NPV and
percent IRR is greater than 0 or positive then a project is feasible to be realized,
on the other hand, if the value is negative then the project is not feasible to be
realized or needs to be reviewed on the investment costs.

The calculation of the NPV and IRR values begins with calculating the cashflow
from the project from the beginning of construction to the end of the power plant
operating. In calculating cash flow, it is necessary to first calculate the investment
value that needs to be spent for the construction of the ABC power plant. The
amount of investment value that needs to be issued is shown in the following
table.

No Tahapan Budget ($)

1. Preeliminary survey, 500.000
permits, and market
analysis
2. 3G survey 3.000.000
3. AMDAL Permitting cost 300.000
4. WellPad cost 3.000.000
5. Access road 1.500.000
6. Feasibility study, project 7.000.000
planning, funding,
contracts, insurances, etc.
7. Single flash power plant 1.800.000
8. Steam gathering system 150.000
EPC
9. Start up and commissioning 5.000.000
 10 OPEX 4.410.000
.
11 Drilling 18.750.000
.
Total 44.400.000

After calculating the total investment value, the next step is to calculate the value
of production capacity for the ABC power plant to operate. Based on the rock
characteristics variables and the estimation of geothermal capacity using the
Monte Carlo method, the annual production capacity can be determined by using.
The diagram below shows the distribution of ABC geothermal plant production
capacity for 30 years of production and the revenue earned each year.

From the value of the revenur each year, the NPV and IRR values can be
determined with the following equation:

T
Ct
NPV =∑
t=0 (1−r)t

IRR=NPV =0

Where, C is the cash flow at time t, r is the discount rate (%), and t is the time
period. Taking into account the assumption of a discount rate of 12%, income tax
of 32.5% and investment costs of IDR 632,478,632,478.00 during the calculation,
the results obtained are NPV of IDR 697,472,464.45 and IRR of 12.01%. The
NPV and IRR values show positive values which indicate that the ABC Power
plant project is feasible to be realized.
 General Information
Date 2021-09-18
202
Project Case study Exp. Beginning (year) 1
202
  Firt operation (year) 4
Currency of project   Years of operation (years) 30

Production
Produce electricity yes
CO2 quota sold
CO2 saving (ton/MWh) 0,75

Capital Cost (million USD)

Preliminary survey,
permits, and market
analysis IDR 7,120,000,000.00
3G survey IDR 42,720,000,000.00
AMDAL permitting cost IDR 4,272,000,000.00
WellPad cost IDR 28,480,000,000.00
Acces road (40 km) IDR 21,360,000,000.00
Feasibility Study,
Project Planning,
Funding, Contracts,
Insurances, etc. IDR 99,680,000,000.00
Single-flash power plant IDR 25,632,000,000.00
Steam Gathering
System EPC (Steam) IDR 2,136,000,000.00
Start-up and
Commissioning IDR 71,200,000,000.00
OPEX IDR 62,798,400,000.00
drilling IDR 267,000,000,000.00
Total IDR 632,398,400,000.00
  
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
51 51 51 51 51 51 51 51 51 51 51 51 51 51 51

4E+0 4E+0 4E+0 4E+0 4E+0 4E+0 4E+0 4E+0 4E+0 4E+0
4E+08 4E+08 4E+08 4E+08 4E+08
8 8 8 8 8 8 8 8 8 8

3E+0 3E+0 3E+0 3E+0 3E+0 3E+0 3E+0 3E+0 3E+0 3E+0
3E+08 3E+08 3E+08 3E+08 3E+08
8 8 8 8 8 8 8 8 8 8
1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1
1E+11 1E+11 1E+11 1E+11 1E+11
1 1 1 1 1 1 1 1 1 1
6E+0 6E+0 6E+0 6E+0 6E+0 6E+0 6E+0 6E+0 6E+0 6E+0
6E+09 6E+09 6E+09 6E+09 6E+09
9 9 9 9 9 9 9 9 9 9
1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1 1E+1
1E+11 1E+11 1E+11 1E+11 1E+11
1 1 1 1 1 1 1 1 1 1