Citation:

Takahide Furukawa, Harimukti Wandebori, Widhyawan Prawiraatmadja. "Analysis of the Investment Factors for the Replacement of Coal-Fired Power Plants Using Fuzzy AHP" International Research Journal of Economics and Management Studies, Vol. 3, No. 1, pp. 291-295, 2024.

Abstract:

Indonesia aims to reach net zero emissions by 2060 during the 2021 United Nations Climate Change Conference (COP26). This study investigated factors that might affect the decision-making process in the investment of coal-fired power plant replacement: Political, Economic, Social, Technological, Environmental, and Legal (PESTEL) factors. The fuzzy analytical hierarchy process (AHP) method was utilized, and 10 Indonesian and Japanese experts with prior experience in the investment of coal-fired power plant replacement projects in Indonesia participated in this study for a month. Economic and legal feasibility were found to be the most affluent factors in the decision-making process to mitigate from coal-fired power plants. Furthermore, gas-fired power plant was found to be the optimal alternative to mitigate from coal-fired power plants. Referring to the Levelized Cost of Electricity (LCOE), it was revealed that a geothermal power plant was also a possible alternative; however, private companies might face difficulties in accessing geothermal power sources as the Indonesian government manages it. This study provides insight and alternatives to consider replacing the current dependency on coalfired power plants and reaching full potential in low carbonization, decarbonization, and net zero emissions in Indonesia.

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Keywords:

Investment Decision-Making, Net Zero Emission, Coal-Fired Power Plant, Fuzzy Analytical Hierarchy Process, PESTEL.