PLN and PTBA Explore the Early Retirement of Pelabuhan Ratu Coal-fired Station

Bali, October 19, 2022 - PT PLN (Persero) and PT Bukit Asam Tbk (PTBA) are exploring the early retirement of Pelabuhan Ratu coal-fired station, West Java.

This commitment was stated in the signing of the Principal Framework Agreement in the agenda series of the Stated-Owned Enterprises (SOE) International Conference in Bali on Tuesday October 18, 2022.

PTBA President Director Arsal Ismail expressed his commitment to support the Government's policies that encourage early retirement of coal-fired station in the context of the transition to clean energy. PTBA is very concerned with the issue of climate change and is ready to contribute to achieve the Net Zero Emission target in 2060.

"The collaboration with PLN in conducting the early retirement of coal-fired station is in line with PTBA's vision to become a world-class energy and chemical company that cares about the environment. We hope that the targets for reducing carbon emissions can be achieved and energy security is maintained," said Arsal Ismail.

Arsal explained that various aspects were considered in this cooperation, both environmental and economic aspects. This Principal Framework Agreement is a joint commitment that gives space to reach the best agreement to provide maximum value for both parties. "This cooperation benefits all parties, both PLN and PTBA," he said.

With the early termination program, the operational period of the Pelabuhan Ratu coal-fired station will reduce 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 Pelabuhan Ratu coal-fired station is based on several strategic considerations. Pelabuhan Ratu coal-fired station is the backbone of electricity supply in the southern part of Java Island.

Based on geographic location, the governance of the Pelabuhan Ratu coal-fired station is relatively easier to integrate with the PTBA supply chain system. The need for coal from Pelabuhan Ratu coal-fired station 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 for the utilization of PTBA's coal reserves.

With the best technology and support systems, this coal-fired station is able to guarantee optimal reliability. The performance of the coal-fired station is efficient, so it has the potential to increase the added value of the economic value of coal as a raw material. The potential for additional income from electricity sales is Rp 6 trillion per year.

After signing the Principal Framework Agreement, PTBA and PLN will carry out a due diligence process for the coal-fired station early retirement program.

The takeover of the coal-fired station will use low-cost funding with the Energy Transition Mechanism (ETM) scheme drawn up by the Ministry of Finance, a blended finance that involves investors.

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