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This paper analyses the business sustainability of on-grid mini hydropower plants. It helps to improve the implementation effectiveness of renewable energy in Indonesia. The sustainable business of on-grid mini hydropower plants is a key for increasing renewable portion and emission reduction. Twelve mini hydro installations with more than one-year operational record were studied. Panel data from 27 respondents were collected in 2018 and analysed qualitatively using stakeholder theory and resource-based theory. The on-grid mini hydropower plants were built and operated at certain cost and the revenue is derived from the sales of electricity. The feed-in-tariff determined by the government policy and each mini hydropower plant has different competitive advantage. Although five mini hydropower plants agreed on the business sustainability throughout the power purchase agreement, only one of them has met the profit expectation. Cost overrun in construction, less profitability and cash flow issue are problems identified in the mini hydropower plants business.

Business Performance and Sustainability of On-Grid Mini Hydro Power Plants in Indonesia