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Energies 2018, 11(3), 504; https://doi.org/10.3390/en11030504

Economic Analysis of Diesel-Fuel Replacement by Crude Palm Oil in Indonesian Power Plants

1
Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcká 129, 169 21 Prague 6, Czech Republic
2
Department of Strategy, Faculty of Business Administration, University of Economics, Prague, W. Churchill Sq. 1938/4, 130 67 Prague 3, Czech Republic
*
Author to whom correspondence should be addressed.
Received: 19 January 2018 / Revised: 20 February 2018 / Accepted: 22 February 2018 / Published: 27 February 2018
(This article belongs to the Section Sustainable Energy)
View Full-Text   |   Download PDF [1534 KB, uploaded 27 February 2018]   |  

Abstract

Indonesia needs to find an alternative fuel to substitute diesel in their power plants in order to reduce the use of nonrenewable energy sources. The Indonesian government has a target to reduce oil fuel consumption while improving the efficiency of energy utilization. Crude palm oil is proposed to be used for this substitution. In this paper, the authors conduct an economic analysis of the replacement of diesel by crude palm oil. To predict future prices, a time series analysis is conducted using AutoRegressive Integrated Moving-Average method. A financial analysis of a specific project (0.75-MW power plant) is conducted using static financial indicators (payback period, return on investment). Results show that replacing diesel with crude palm oil may be profitable. This is especially true for the proposed prospects of diesel price evolution. Analysis shows that the price of crude oil, which is the main factor in the pricing of diesel, may go up. Also, recently Indonesian currency depreciated against the US dollar, which also implies a higher cost of diesel. View Full-Text
Keywords: biomass; renewable energy; power plant; diesel; crude oil biomass; renewable energy; power plant; diesel; crude oil
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Procházka, P.; Hönig, V. Economic Analysis of Diesel-Fuel Replacement by Crude Palm Oil in Indonesian Power Plants. Energies 2018, 11, 504.

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