Techno-Economics Analysis of Off-Grid Solar Photovoltaic (PV) Systems in Remote Areas in Indonesia for Rural Village Electrification: Case Study of Pantar Island

Abstract

Electricity demand in rural villages in Indonesia is typically supplied by diesel power plants due to the dispersed, remote, or isolated villages' geographical location. However, the operation cost of such standalone diesel generators depends on the subsidised fuel prices, which are highly influenced by the fluctuating international market price and are also affected by the incurred transportation cost to the remote area from the distribution centres. The resulting gas emissions from the combustion also leave another concern for the environmental aspect. On the other hand, Indonesia has an abundance of renewable energy potential, particularly solar energy, due to its location along the equator. This paper aims to assess the feasibility of off-grid photovoltaic (PV) systems for rural villages' electrification in remote islands and isolated areas in Indonesia. The study focuses on analysing various configurations, namely diesel generator as the base scenario, solar PV only, solar PV with battery, solar PV with diesel, and solar PV with battery and diesel. The levelized cost of energy (LCOE), Net Present Value of Cost (NPC), and CO2 emissions approaches are utilized to assess the competitiveness of the off-grid PV systems economically and environmentally compared to the diesel generator as a typical rural electrification solution in Indonesia. The study uses Homer software to model and evaluate these different scenarios. The results show that the renewable PV-battery configuration is the most economical solution at LCOE of 0.35 $/kWh, almost a quarter of the baseline with the diesel configuration at LCOE of 1.2 $/kWh.