THE IMPACT OF ADDITIONING ESG FACTORS IN THE FINANCIAL MODEL IN POWER PLANT DEVELOPMENT CAN BE CATEGORIZED AS A BURDEN OR BENEFIT IN PT XYZ

: The Indonesian government has set a roadmap to achieve a carbon neutral energy transition by 2060. In supporting this program, PT XYZ as a power generation company is focusing on building new power plants. Current power plant development only focuses on conventional concepts, namely price affordability and security of supply. However, in achieving a carbon neutral energy transition, it is necessary to add the pillar of acceptability. This acceptability pillar can be applied in the development of new projects by considering ESG factors (Environmental, Social, and Governance) which has an impact on the project's financial model. With the assignment allocation of 130 power generation projects from state own enterprise to PT XYZ assubholding, the author's suggestion is that PT XYZ should conduct a comprehensive study that evaluates the impact of ESG factors onfinancial model. This consideration aims to support the transition programnet zero emission, preventing environmental damage, allocating budgets efficiently, ensuring the long-term stability of the company's BPP, and maximizing company value. Although there are some opinions that consider ESG to be a burden, this research aims to evaluate or analyze that ESG is not a burden but a benefit for the development of new projects. The method used is to consider significant ESG factorsfinancial model projects, as well as assessing financial feasibility using methods such asInternal Rate of Return (IRR) andNet Present Value (NPV). This analysis takes into account the existence of limits on buying and selling prices set by state own enterprise (Persero


INTRODUCTION
In supporting this government program, the development of generating projects carried out by state own enterprise (Persero) and its subholdings including PT XYZ does not only focus on maximum profits but is in line with achieving NDC targets.This is stated in the 2021-2030 Electricity Supply Business Plan (RUPTL) published by state own enterprise (Persero), there is a target to carry out an energy transition with environmentally friendly technology in line with the transition program tonet zero emission (Niu et al., 2022).
With the energy transition, the conventional concept of generating plants generally only focuses on 2 pillars, namelyaffordability (least cost) andsecurity of supply (reliability), will move to the 3 pillars by addingacceptability (environmental consideration) in consideration of power plant development in accordance with RUPTL 2021-2030(Kabeyi & Olanrewaju, 2022).Fulfilling all these pillars is a challenge for state own enterprise because currently many thermal project webathons are needed considering that electricity needs continue to increase but using renewable energy requires a longer time in planning until the plant is operational.
To obtain efficient tariffs, the government has made regulations through the Decree of the Minister of Energy and Mineral Resources of the Republic of Indonesia (Kepmen ESDM 169/2021) No. 169.K/HK.02/MEM.M/2021 concerning the Amount of the Basic Cost of Supply (BPP) of State Own Enterprise (Persero) Generation in 2022, that the purchase of electricity by state own enterprise (Persero) is carried out referring to the amount of the basic cost of supply (BPP) national generation or in the local electricity system determined by the Minister (Adeko et al., 2022).
Research will be carried out where our company is the planner and executor of project development not only focusing on financial planning but also on business sustainability.In 2023, our company will build 130 assigned generator projects from the holding with various types of generators according to the RUPTL target (Halimanjaya, 2019).Integrated planning is required to map and optimize 130 projects with several integrated financial factors and ESG factors which influence project finances or several Financial Model items.
According to the author's observations, currently PT XYZ in developing new generators uses the NPV method conservatively and only focuses on reliable generators.As previously explained, the development of new generating projects has not yet considered ESG factors because several opinions stated that ESG is a burden or expense for the company.One of them is the opinion of Sullivan et al. (2015) emphasize the importance of ensuring that sustainability costs do not exceed the company's available budget.
So in this research, the author conducted research that considers ESG Factors for the construction of new generating projects, and proves whether ESG Factors are a burden orbenefit in its impact onfinancial model new generating project (Rusnaeni et al., 2023).In determining the buying and selling price of electricity, it will become the Basic Cost of Supply (BPP) for state own enterprise (Persero) so that the BPP amount can potentially increase significantly, which will increase the government's subsidy burden.So it is hoped that with these ESG factors, the construction of new power plants will not harm state own enterprise or PT

RESEARCH METHODS
The research was prepared using primary data and secondary data, including the following: a. Data Primer Conducting semi-structured interview data collection conducted with several interviewees who have expertise in the fieldthermal power plant, the interview aims to identify and validate factors that influence ESG factors, especially those related to emissions and efficiencyengine, efficiencyenergy andconsumable efficiency.b.Data Secondary Analyzing power plant projects through books, journals, theses and the internet.Study and analyze all regulations or provisions relating to electricity that currently apply in Indonesia For a detailed explanation regarding data sources and an explanation of the primary and secondary data used can be seen in the table below: The conclusion is: a. Nilai IRR Equity 10.4% b.Nilai IRR Project 9.57% c.Discounted Payback Period is 8 years 7 months d.DSCR = 1.45 is greater than 1, then the company has sufficient funds to pay its debts and obligations.
Table 3 Investment Analysisnon ESG Factor without funding and the potential to not operate due to the AMDAL not having been issued Source: Author's Processed Data The conclusion is: a. Nilai IRR Equity 12.3% b.Nilai IRR Project 13.5% c.Discounted Payback Period is 7 years 2 months

ESG Factors
As per Kumar, et.al., 2023, World Bank (2018) defines activitiesESG Investing as "Environmental, social and governance issues that are taken into account in the analysis, selection and management of assets in ESG investments.
ESG factors have an influence on itemsfinancial model, Those that have a significant impact can be seen in the following picture: Air and water pollution occurs due to fuel quality that does not meet standards and engine conditions that are not well maintained.Therefore, the government is making efforts so that all power plants can meet standards related to water & water pollution.One of the government's efforts through the Indonesian Ministry of Environment and Forestry with the issuance of Ministerial Regulation No. 13 of 2021 aims to obtain emission data and information correctly, accurately and continuously using the CEMS system (continuous measurement of levels of emission parameters and water flow continuously).
These factors influencerevenue and OPEX, expected to be thereoperation and maintenance If it is good then the generator will not get black proper so it can operate continuously.

b. GHG emissions
Gas emissions occur in the electricity generation industry as the largest contributor.In accordance with Ministerial Regulation No. P.15/MENLHK/SETJEN/KUM.1/4/2019concerning Quality Standards for Thermal Power Plant Emissions, considering that thermal power plants have the potential to cause air pollution, it is necessary to control emissions.
From year to year the regulations are made increasingly stricter in the future, so company efforts are needed to be able to meet increasingly stringent emission quality standards.
Through Proper, the Ministry of Environment and Forestry with the issuance of Ministerial Regulation No. 1 of 2021.There are types of assessment criteria that will determine the proper ranking, which is the basis for the Guidance is given to red proper participants and if they comply the status can be increased to blue.In accordance with Article 48 paragraph (1), law enforcement is given to black proper participants and will be carried out in accordance with the provisions of laws and regulations, even if the power plant cannot be operated.At each generator there is a set emission cap, if the total emissions produced are higher then the generator experiences a deficit emissions so that the generator has two options, namely to buy and sell CO₂ emissions and to pay the CO₂ emissions tax charged IDR 30,000/tCO₂ with detailed calculations below : In accordance with Minister of Environment and Forestry Regulation No.P.15/2019, there is a NO₂ limit for PLTMG generators.The following is the data I got from calculating the estimated concentration of NOx emissions from gas engines analyzed in the ICPEA 2023 international paper in accordance with regulatory limits in Indonesia (Reza et al., 2023).

e. Equipment Investment
In electricity generation, there is several equipment that can reduce GHG emissions.According to the interview results, special equipment is not needed for SO₂ emissions because the sulfur content in PLTMG tends to be low.To reduce NOx emissions there is an equipment solution called Selective Catalytic Reduction (SCR), the SCR equipment an investment of around 2.3% to 3.5% of the EPC Cost is required for a 10 MW to 30 MW PLTMG scale (this estimate was obtained from sources who have published journals related to SCR).

f. Energy Efficiency
According to the author's analysis, fuel quality determines generator efficiency, whether the specifications are appropriate or notout of specification then the energy that comes out will be efficient in producing electricity so that the electricity generator does not experience finesheatrate or SFC which is generally stated in the PPTL agreement due to fuel inefficiency.For fuel for the ABC project power plant, dual fuel (Oil and Gas) can be used.To achieve energy efficiency, it is hoped that gas can be used, which in addition to being cheaper, gas is also in accordance with research results that show greenhouse gas emissions.lower for gas compared  2021).Consumable efficiency What is meant is own use, if the use itself in the implementation in the field exceeds the use compared to the planning that has been carried out previously, then it will have an impact on the financial model for 20 years.
In Perdir 0283/2016, personal use cannot be provided by the electricity provider itself, so electricity provided by state own enterprise is treated as a state own enterprise customer and is subject to regular or premium rates in accordance with the applicable electricity tariff provisions.This will increase OPEX because it increases the expenses of electricity generation companies where the company only gets the ABD rate per kWh apart from the C rate for fuel.Pass through from state own enterprise.However, payments to state own enterprise are subject to regular rates, resulting in a difference in revenue generated and expenditure per kWh.

i. Stakeholder Engagement Holding (State Electricity Company (Persero))
State own enterprise (Persero), which is the Holding of PT .There are several obstacles in obtaining this agreement, including the discussion timeline which takes quite a long time, which can hinder the use of goods import tax exemption facilities.It is hoped that the PPTL/PPA/PJBTL can be completed soon or that the document will not be a requirement for utilizing the goods import tax exemption facility like state own enterprise considering that we are a subholding which aims to meet the electricity needs of the community and obtain tariff efficiency and considering that in the future state own enterprise will no longer build power plants, construction The generation will be carried out by subholding so that if the problem is not immediately mitigated, there will be many projects that will be tariff inefficient due to not getting the import tax exemption facility for goods.
In terms of the timeline for determining the PPTL/PPA/PJBTL is before the contract with the EPC Contractor.However, in field implementation of PPTL/PPA/PJBTL, this often occurs after a contract has been signed with the EPC Contractor, which can cause differences in the price planned by state own enterprise and the price set by the Owner.So it is not effective in setting tariffs because there is a process that is not in accordance with applicable procedures.

j. Stakeholder Engagement EPC Contractor
In the construction of new power plant projects, EPC Contractors andOwner has an interest in ensuring that the project schedule can run according to plan so that project costs are in accordance with the planned budget.However, in the implementation process, there are obstacles in the process of importing goods, where the Owner has an interest in utilizing the import tax exemption facility for goods which could potentially cause delays in the schedule because the process of utilizing this facility has various document requirements and the checking process also takes time.Therefore, there is a need for mutual cooperation and trust between the EPC Contractor and the Owner so that the potential for non-transparency in the process of importing goods does not occur.
Because documentation requirements are also inseparable from the role of the EPC Contractor, namely preparing a masterlist document which is used as one of the conditions for exemption from import tax on goods.In the author's analysis, apart from there being obstacles in utilizing the goods import tax exemption facility, there is also the potential for cost overruns caused by the Contractor's EPC or Owner delaying time in construction work and due to additional work requests that are not in accordance with initial planning, and the Contractor's EPC seeing opportunities to capitalize all types of work that can be capitalized.

k. Stakeholder Engagement Consultant
According to the author's analysis, consultants play an important role from planning to execution of power plant construction.Therefore, consultants have a potential conflict of interest if the consultant does not side with the Owner as an employer who requests the consultant's assistance so that they can provide assistance during the project planning stages, the tender process and supervise construction implementation.
According to the author's analysis, in the tender assistance process there are several vulnerabilities, namely the existence of asymmetric information which may occur if the consultant tends

Figure 2 .
Figure 2.ESG factors have a significant impact on Financial Model Source: Has been reprocessed With the following explanation: a. Air & Water PollutionAir and water pollution occurs due to fuel quality that does not meet standards and engine conditions that are not well maintained.Therefore, the government is making efforts so that all power plants can meet standards related to water & water pollution.One of the government's efforts through the Indonesian Ministry of Environment and Forestry with the issuance of Ministerial Regulation No. 13 of 2021 aims to obtain emission data and information correctly, accurately and continuously using the CEMS system (continuous measurement of levels of emission parameters and water flow continuously).These factors influencerevenue and OPEX, expected to be thereoperation and maintenance If it is good then the generator will not get

Figure 3 .
Figure 3. Illustration of Carbon Tax Calculation Source: Workshop related to SeminarCarbon Capture January 12, 2023

RESULTS AND DISCUSSION Analysis NPV and IRR on non ESG Factor Cash flow calculations from 2023 to 2043 are carried out by calculationpresent value
withdiscount factor as big asWeighted Average Cost of Capital (WACC) namely 8.4%.Based on the analysis resultsNPV positive project then the project is feasible.According to the capital budgeting analysis, the calculation details are as follows:

Table 2 Investment Analysisnon ESG Factor with funding Source
: Author's Processed Data The Impact of Additioning ESG Factors in The Financial Model in Power Plant Development can be Categorized as a Burden or Benefit in PT XYZ Page 1106Asian Journal of Engineering, Social and Health Volume 2, No. 9 September 2023 The Impact of Additioning ESG Factors in The Financial Model in Power Plant Development can be Categorized as a Burden or Benefit in PT XYZ Page 1108Asian Journal of Engineering, Social and Health Volume 2, No. 9 September 2023 government to provide awards, guidance and law enforcement.
The Impact of Additioning ESG Factors in The Financial Model in Power Plant Development can be Categorized as a Burden or Benefit in PT XYZ The Impact of Additioning ESG Factors in The Financial Model in Power Plant Development can be Categorized as a Burden or Benefit in PT XYZ Issue IUPTL if the AMDAL, KKPR, PPTL documents are complete.2. Get exemption from import tax on goods if the IUPTL and Masterlist are issued by ESDM. 3. Issue SLO if IUPTL is issued.If there is no SLO, the generator cannot operate commercially.With the ministry's role having a big impact on generation projects, it is hoped that project flexibility will impact electricity rates or even be equalized with state own enterprise so that Page 1115 Asian Journal of Engineering, Social and Health Volume 2, No. 9 September 2023

Table 5 Sensitivity Analysis ABC Project Source
: Processed Author's Data The table above shows several analyzes used to test and understand the extent to which changes to certain variables or assumptions can affect the results or output of a model, projection, or business decision.