The Bankable Economic Potential of Utility-Scale Solar Pv: A Novel Gis-Based Framework with Application to Indonesia

34 Pages Posted: 4 Mar 2023

See all articles by Jannis Langer

Jannis Langer

Delft University of Technology

Ziad Ashqar

Delft University of Technology

Yilong Zhou

Delft University of Technology

Olindo Isabella

Delft University of Technology - Photovoltaic Materials and Devices Group

Aaron Praktiknjo

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN)

Jaco Quist

Delft University of Technology

Zenlin Kwee

Delft University of Technology

Kornelis Blok

Delft University of Technology

Abstract

Geospatial analysis is useful to calculate and map solar photovoltaic’s (PV) economic potential. However, recent studies do not address PV’s bankable potential for practical implementation and show limitations in (1) potential and input reporting, (2) studied metrics, (3) uncertainty analysis, and (4) policy analysis. To tackle these limitations, we propose a novel framework for utility-scale PV’s bankable potential, which combines geospatial analysis and project finance. The framework involves 20 years of hourly solar electricity production, a debt sizing and cash flow analysis model, and Monte Carlo simulation. We report a conservative technical potential of 9.3 TWpeak and 12.1 PWh/year in Indonesia. Considering expected 2030 demand, PV’s bankable potential is up to 40.8 TWh/year mostly situated in East Indonesia where population and demand are low. PV’s bankability is currently limited by strict loan maturities and low electricity tariffs, and could be improved to up to 232 TWh/year (52% of 2030 demand) via a feed-in tariff of 11.5 US¢(2021)/kWh and a temporary lift of local content for solar panels. Despite their effectiveness, policymakers should be aware of possible side effects of PV policies, e.g. for local coal-based industries and rural communities with limited electricity access.

Keywords: Solar PV, geospatial analysis, project finance, Economic analysis, Indonesia, Monte Carlo simulation

Suggested Citation

Langer, Jannis and Ashqar, Ziad and Zhou, Yilong and Isabella, Olindo and Praktiknjo, Aaron and Quist, Jaco and Kwee, Zenlin and Blok, Kornelis, The Bankable Economic Potential of Utility-Scale Solar Pv: A Novel Gis-Based Framework with Application to Indonesia. Available at SSRN: https://ssrn.com/abstract=4378057 or http://dx.doi.org/10.2139/ssrn.4378057

Jannis Langer (Contact Author)

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Ziad Ashqar

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Yilong Zhou

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Olindo Isabella

Delft University of Technology - Photovoltaic Materials and Devices Group

Delft
Netherlands

Aaron Praktiknjo

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN) ( email )

Mathieustrasse 6
Aachen, 52074
Germany

Jaco Quist

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Zenlin Kwee

Delft University of Technology ( email )

Kornelis Blok

Delft University of Technology ( email )

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