A Value Of IDR 12.37 Trillion, PLTU Pelabuhan Ratu Officially Switched From PLN To PT Bukit Asam

PLTU Pelabuhan Ratu. (Photo: Doc. Antara)

PT PLN (Persero) is determined to realize early retirement of Steam Power Plants (PLTU). This commitment is reflected in the cooperation between PLN and PT Bukit Asam Tbk (PTBA) which agreed to explore the possibility of an early termination of one of the PLTUs, namely the PLTU Pelabuhan Ratu.

The transition value of the PLTU, which is located in West Java, reached US$800 million or equivalent to Rp12.37 trillion.

Director of Corporate Planning and Business Development of PLN Hartanto Wibowo said PLN had prepared a roadmap for early retirement of steam power plants (PLTU) to achieve Net Zero Emission (NZE) by 2060.

"The total capacity of the PLTU to be retired is 6.7 GW to 2040, consisting of 3.2 GWs who were retired naturally and 3.5 GWs were retired early following conditions," Hartanto said in an official statement, Wednesday, October 19.

Hartanto revealed, there are three early retirement scheme options considered by PLN to finance PLTU early retirement, the first is the write off from PLN's book, the spin off with blended financing and IPP refinancing.

"In collaboration with PTBA, it is possible that the early retirement process of PLTU will be carried out through a spin off with blended financing scheme with a commitment to shorten the PLTU operation period to 15 years from the previous 24 years," he said.

In addition, Hartanto also emphasized that with this blended financing, it is hoped that funding will be obtained with cheaper interest rates, thereby accelerating the cessation of coal-fired power plants operations.

"On the other hand, through this spin off PTBA can optimize the use of coal from its mines," he added.

In addition to early retirement, PLN will also operate PLTU with Carbon Capture, Utilization, and Storage (CCUS) of 19 GW. Other initiatives such as biomass co-firing in several PLTUs will also be carried out to prevent future emissions.

"Not only will PLTU retire, according to the road map to NZE 2060, PLN will also not carry out PLTU development, except for the current completion of development which is already in the construction stage," he explained.

On the PLN roadmap, the acceleration of early retirement of PLTU of 3.5 GW can be done before 2040, for PLTU with subcritical technology. The acceleration of retirement can be done when the replacement EBT capacity is operational, thus not causing an increase in financial burdens that burden the government, and the existence of funding assistance from the international community.

Meanwhile, PTBA President Director Arsal Ismail expressed his commitment to support the Government's policy of encouraging early retirement of PLTU in the context of transition to clean energy. PTBA is very concerned about the issue of climate change and is ready to contribute so that the NZE target in 2060 can be achieved.

"Cooperation with PLN in carrying out early retirement of PLTU is in line with PTBA's vision to become a world-class energy and chemical company that cares about the environment. We hope that carbon emission reduction targets can be achieved and energy security is maintained," he said.

On the same occasion, Managing Director of Investment Banking Mandiri Sekuritas Harold Ciptajaya revealed, there are many ways to support PLTU's early retirement, one of which is by spin off as PLN and PTBA did.

"We mean to consider many ways how to get there and one of them is as mentioned, namely the spin off," he said.

Harold revealed that the signing of the cooperation between PLN and PTBA in exploring the possibility of early retirement of PLTU is a historic moment, and marks the start of the Energy Transition Mechanism (ETM) mechanism.

"The signing of this cooperation marks PLN and PTBA as well as collaborating to ensure that the energy transition in Indonesia is realized," he added.