In line with the government’s program to retire the Steam Power Plant (PLTU), the State Electricity Company (PLN) will transfer the operations of two PLTUs, including the PLTU Pelabuhan Ratu 3 x 350 Mega Watt (MW) and the PLTU Pacitan.
On Tuesday (18/10/2022), PLN and PT Bukit Asam Tbk (PTBA) signed the Principal Framework Agreement (PFA) as PLN’s commitment to transfer the PLTU Pelabuhan Ratu to PTBA.
The transfer of the two PLTUs sourced from coal is a support for the government to shorten the life of the Steam Power Plant or retire the PLTU. The PLTU transition will use the Energy Transition Mechanism (ETM) scheme prepared by the Ministry of Finance.
Furthermore, PLN’s Director of Transmission and System Planning, Evy Haryadi, revealed that the plan to release the two PLTU assets would later use an asset spin-off scheme with mixed financing involving investors.
The two PLTUs to be transferred are worth US$ 1.6 billion, each with US$ 800 million.
“The total is US$ 1.6 billion for the two PLTUs. The Pacitan PLTU will cooperate with international investors. This one (PLTU Pelabuhan Ratu) is in synergy. We are looking for investors because basically, it depends on the refinancing concept. There is a need for a blended finance cheaper ones,” said Evy in Nusa Dua, Bali, Tuesday (19/10/2022).
Evy said the PLTU asset transfer scheme uses blended financing that has been designed by the Ministry of Finance. The transfer of generator assets is intended as an effort by the company to shorten the operational life of the power plant.
With the early termination program, the operational period of the PLTU Pelabuhan Ratu will be cut from 24 years to 15 years. The reduction in operational life will be accompanied by the potential for cutting carbon dioxide (CO2) emissions equivalent to 51 million tons or equivalent to Rp 220 billion.
PTBA’s participation in the early retirement plan for PLTU Pelabuhan Ratu is based on several strategic considerations. PLTU Pelabuhan Ratu is the backbone of the electricity supply in the southern part of Java Island.
Based on geographic location, the governance of the Pelabuhan Ratu PLTU is relatively easier to integrate with the PTBA supply chain system. The need for coal from PLTU Pelabuhan Ratu is 4.5 million tons per year or 67.5 million tons for 15 years.
This is in line with the Company’s Long Term Plan (RJPP) for the utilization of PTBA’s coal reserves.