Techno-economic analysis of solar photovoltaic integration as partial substitution of captive coal-fired power in nickel smelters
DOI:
https://doi.org/10.37577/sainteks.v8i02.1132Keywords:
Solar PV, Battery Energy Storage System, Captive Coal Power, Nickel Smelter, LCOE, Decarbonization, CBAMAbstract
The Indonesian nickel processing industry, concentrated in the Morowali (Central Sulawesi) and Obi Island (North Maluku) industrial parks, currently relies on captive coal-fired power plants (PLTU captive) to supply approximately 76% of its electricity demand. This dependency creates a structural barrier to decarbonization and exposes nickel exporters to forthcoming carbon border adjustment mechanisms (CBAM) in major destination markets. This study evaluates the techno-economic feasibility of integrating a 200 MWp ground-mounted photovoltaic (PV) plant coupled with an 80 MWh Battery Energy Storage System (BESS) as a partial substitute for captive coal generation in a representative nickel pyrometallurgical smelter (350,000 ton NPI/year, 132 MW captive load, 1,056 GWh/year electricity demand). The analysis combines solar resource assessment using long-term Global Horizontal Irradiation (GHI) data from the Global Solar Atlas (4.85–4.95 kWh/m²/day for the study locations), Levelized Cost of Energy (LCOE) calculation, and capital budgeting using NPV, IRR and Payback Period. Results show that the proposed configuration generates 279.0 GWh/year (substituting 26.4% of smelter consumption), with a total CAPEX of USD 197.76 million and LCOE of USD 0.0944/kWh (IDR 1,510/kWh). The avoided CO? emission reaches 237,155 tons/year. Although the project is not feasible under the current Indonesian carbon price (USD 2/ton, NPV negative), feasibility is achieved at carbon prices of USD 50/ton or above (NPV USD 19.84 million, IRR 11.33%) and becomes highly attractive at CBAM-equivalent USD 70/ton (NPV USD 61.34 million, IRR 14.01%, Payback Period 6 years 8 months). Sensitivity analysis identifies carbon price and PV CAPEX as the most influential variables. The study confirms that PV-BESS substitution is a strategically viable decarbonization pathway when supported by carbon pricing reform and ESG-aligned financing
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