Energy company ACEN, part of the Ayala Group, announced last Friday that it will partner with Singapore’s GenZero and Keppel to convert a coal-fired power plant in the Philippines into a clean energy facility.
This innovative project will employ transition credits (TCs) to fast-track the decommissioning of the 246 MW South Luzon Thermal Energy Corporation (SLTEC) plant located in Batangas, the second largest international seaport in the Philippines.
The goal is to replace the coal plant with a solar energy system and battery storage, creating a model for other nations aiming to transition away from fossil fuels.
Remarkably, this project is set to become one of the first in the world to generate TCs from a repurposed coal facility.
Transition coal credits offer a groundbreaking method to finance the phaseout of coal power plants, a critical step in combating climate change.
These credits are designed to bridge the financial gap associated with decommissioning coal plants.
The avoided emissions from retiring coal plants ahead of schedule and replacing them with renewable energy sources are converted into carbon credits, which can then be bought and sold.
By providing financial incentives for early decommissioning and redirecting investment into renewable infrastructure, TCs could play a pivotal role in accelerating the global energy transition, particularly in coal-dependent regions and industries.
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The Philippines is leading in energy transition efforts, and this collaboration could open up more opportunities both within the country and on a global scale, ACEN’s President and CEO Eric Francia said.
Frederick Teo, CEO of GenZero, emphasized the importance of cross-border collaboration for achieving a just energy transition in Southeast Asia and highlighted that transition credits can attract essential financing for coal-to-clean energy projects.
According to Cindy Lim, CEO of Keppel Infrastructure, this joint initiative with ACEN and GenZero will pave the way for retiring more coal-fired plants and replacing them with cleaner energy facilities in Southeast Asia.
Aligned with the Paris Agreement’s objectives, the project will support both the Philippines’ and Singapore’s climate goals.
The consortium will also explore the possibility of trading carbon credits under Article 6 of the Paris Agreement.
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