Perpustakaan Digital ITB

Tidal energy presents a promising solution for Indonesia’s clean energy transition, reducing reliance on fossil fuels while supporting sustainable electricity generation. This study evaluates the financial feasibility of a tidal power plant at Larantuka Strait, focusing on key economic indicators such as the Levelized Cost of Energy (LCOE), Net Present Value (NPV), and Internal Rate of Return (IRR). The results indicate that the project is financially viable, with an LCOE of Rp1,193.72/kWh—significantly lower than East Flores' regional electricity generation cost (BPP) of Rp1,856.59/kWh. Two financing scenarios were assessed: (1) 100% equity financing, yielding an NPV of Rp263.83 billion, an IRR by more than 100%, and a discounted payback period (DPP) of 9 years; and (2) a 70% loan and 30% equity structure, which resulted in a higher NPV of Rp96.97 billion, an IRR of 39.74%, and a shorter DPP of 12 years. The 1st scenario demonstrates superior financial viability, providing a more attractive investment case. Sensitivity analysis further supports this scenario, showing higher tolerance for variations in turbine power output and capital expenditure (CAPEX). These findings contribute to policy considerations for integrating tidal energy into Indonesia’s national energy mix, highlighting its potential to meet projected electricity demands in Adonara Island and Larantuka City while ensuring cost-effectiveness and long-term sustainability.