Risk-Based Feasibility Analysis of Battery Energy Storage System (BESS) Business Development Against Geopolitical, Technological, and Regulatory Threats: A Case Study of an Electricity Asset Management Company

Abstract

This research aimed to formulate a risk-tested Battery Energy Storage System (BESS) business development strategy for the utility segment through the development of an Integrated Strategic Risk Management Framework. The study employed a mixed-methods approach with an exploratory case study design focusing on an electricity asset management company operating 762 power plants with a total capacity of 1,082 MW in remote, frontier, and outermost (3T) areas. Data were collected through interviews with five key informants, a review of internal documents from 2020 to 2025, relevant regulations (RUPTL 2025–2034, Minister of Energy and Mineral Resources Regulation No. 19/2025, and Presidential Regulation No. 112/2022), and industry reports from the IEA, BNEF, and Wood Mackenzie. The analysis was conducted in three stages: strategic analysis using PESTLE, Porter’s Five Forces, VRIO, and quantitative SWOT; risk analysis using a probability–impact matrix and risk exposure calculations; and strategy–risk integration using risk creation and risk reduction analysis, the Risk-Adjusted Discount Rate (RADR), and a Monte Carlo simulation with 10,000 iterations. The results identified nine strategic risks, four of which were classified as critical, each with a score of 9, resulting in total risk exposure of IDR 765 billion relative to an investment of IDR 500 billion. The combination of Diversified and Integrated Risk Management, Service Differentiation, and 3T Niche Focus strategies generated an NPV of IDR 180–235 billion, an IRR of 26–30% at a RADR of 20%, a payback period of 4–5 years, and a 94.2% probability of achieving a positive NPV. This research operationalized the integration of risk and strategy in the context of BESS business development in emerging markets.