Scenario Planning for Strategic Decision-Making in Captive Power Plant: A Case Study of EBC Company Facing Global Net Zero Emission Challenges Beyond 2031

Abstract

Greenhouse gas emissions from human activities, especially the combustion of fossil fuels, increased world surface temperatures by 1.1 °C between 2011 and 2020 compared to the 1850–1900 period. In order to limit global temperature rise, and achieve net-zero emissions by mid-century, as outlined in the Paris Agreement—which Indonesia signed in 2016—a substantial decrease in coal usage is imperative. This poses uncertainties for coal-dependent companies like Eastern Borneo Coal (EBC) in Indonesia. This study investigates the business environment uncertainties faced by EBC, particularly regarding its captive coal power plants, and assesses the potential risks associated with various future scenarios using scenario planning method. Findings suggest EBC must prioritize equipment upgrades and compliance measures in stricter regulatory environments, enhance operational efficiency and diversify investments in favourable conditions, implement cost reduction strategies and focus on high-quality coal production in challenging markets, and maintain flexibility and explore export opportunities under looser regulations. Emphasizing the importance of monitoring key indicators, engaging with stakeholders, and investing in sustainable technologies, the study provides strategic insights to help EBC navigate future uncertainties and maintain competitiveness, positioning it as a leader in sustainable energy practices beyond 2031.