Financial Feasibility Study of the Business Model Transition From Captive Power Users in East Java to PT PLN Electricity Based on Renewable Energy

Abstract

The transition to renewable energy is a top priority to reduce carbon emissions, especially from the industrial sector, which contributes significantly through the use of fossil fuel captive power plants in East Java. This study aims to develop and evaluate a business model that can encourage the captive power user industry to switch to renewable energy-based electricity provided by PT PLN (Persero). The research method integrates a qualitative approach through the Sustainable Business Model Canvas (SBMC) to analyze the elements of the business model and SWOT analysis to identify strategic factors, with a quantitative approach through financial feasibility evaluation. Primary data were obtained from interviews with captive power users in East Java, while secondary data included costs and technical parameters. The results of the SBMC and SWOT analysis were used to design two main business models: (1) Integrated Renewable Energy with Priority Services, and (2) Integrated Renewable Energy with Steam as a Service. A financial feasibility evaluation shows that the Priority Service Model is economically feasible, while the Steam as a Service Model shows very limited feasibility—viable only at a 1 km distance with 8- and 10-inch pipe diameters—and is highly sensitive to small changes in revenue. This research is expected to contribute to the formulation of an effective and sustainable energy transition strategy for the industrial sector in East Java and support the achievement of the Net Zero Emission target.