Assessment of Fuel Subsidy Influence on the Viability of Hybrid Pv-Diesel-Battery Systems in Binenok, East Nusa Tenggara

Remote regions, such as Binenok in East Nusa Tenggara, address significant challenges in providing reliable and sustainable electricity. This study assesses the technological and economic feasibility of two PV-diesel-battery hybrid systems under both subsidized and non-subsidized fuel pricing scenarios. The analysis accomplished with HOMER Pro software reveals that the subsidized fuel system results in a Net Present Cost (NPC) of <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$2,809,803$</tex> and a Levelized Cost of Energy (LCOE) of <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$0.410 / \text{kWh}$</tex>. In contrast, the non-subsidized system shows an NPC of <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$3,538,055$</tex> and an LCOE of <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$0.516 / \text{kWh}$</tex>. Although the non-subsidized system demonstrates a higher Internal Rate of Return (IRR), its increased operational expenses make the subsidized scenario more financially viable over time. This study lays the groundwork for policy development regarding energy subsidies to support the electrification of remote communities.