Strategy to Reduce the Main Cost of Electricity Supply in PT PLN Batam
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PT PLN Batam recorded a negative operating margin in 2024, as its electricity supply cost (Biaya Pokok Penyediaan, BPP) reached IDR 1,497/kWh, exceeding the average electricity selling price of IDR 1,462/kWh. This condition was primarily attributed to the heavy reliance on natural gas, which accounted for approximately 85% of the fuel mix, rising natural gas prices, and the absence of government subsidies or compensation. This study aimed to identify the primary factors contributing to the high electricity supply cost in the Batam power system and formulate strategies to reduce it. A quantitative case study approach was employed, incorporating cost-volume-profit (CVP) analysis to distinguish fixed and variable costs and determine the break-even point (BEP) for the 2020–2024 period. The analysis was complemented by an examination of the 2024 daily electricity load curve and a merit-order-based generation redispatch simulation. The findings revealed that variable costs, predominantly associated with natural gas consumption, accounted for up to 77.91% of operating expenses, while actual electricity sales in 2024 were 419.35 million kWh below the break-even sales volume. The simulation indicated that increasing the capacity factor of combined-cycle gas turbine (CCGT) power plants while reducing generation from gas engine power plants could lower the BPP to IDR 1,494/kWh, which remained above the average selling price. These findings demonstrated that operational efficiency improvements alone were insufficient to achieve financial sustainability. Therefore, government compensation mechanisms and long-term investments in solar photovoltaic (PV) generation integrated with battery energy storage systems (BESS), or the development of a Sumatra–Batam submarine power transmission cable, were identified as potential strategies for reducing electricity supply costs and improving the financial sustainability of PT PLN Batam.
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