ACEN Corp., the renewable energy arm of the Ayala Group., said Monday it has signed a memorandum of understanding with GenZero and Keppel Ltd. to jointly explore transition credits for accelerating the retirement of the South Luzon Thermal Energy Corp. coal-fired power plant in Batangas and replace it with a clean energy dispatch facility.
This project aims to be among the first to convert a coal-fired power plant into a transition credits-generating facility, reflecting the partners’ commitment to advancing a just transition to clean energy in Southeast Asia.
Coal-fired power plants are the largest global source of carbon emissions, and Southeast Asia hosts the fourth largest fleet of such plants, with an average age under 15 years. The early retirement of South Luzon Thermal Energy is crucial for the region’s progress towards Paris Agreement goals and global net-zero targets by 2050.
The MOU outlines a development study to utilize transition credits in facilitating the project’s implementation, aiming to decommission the 246 MW SLTEC plant in Calaca, Batangas by 2030 and support just transition initiatives.
Keppel’s Infrastructure Division chief executive officer Cindy Lim highlighted the project’s role in advancing clean energy and setting a precedent for retiring coal-fired plants. GenZero CEO Frederick Teo emphasized the importance of cross-border collaboration and TCs in driving decarbonization. ACEN chairman Cezar Consing and ACEN president & CEO Eric Francia expressed optimism about the project’s potential to scale regionally and globally.
The initiative will explore an end-to-end solution for replacing the CFPP’s base load with a mid-merit integrated renewables and energy storage system featuring solar and battery storage. The partners will also address environmental, social, and governance considerations, including worker training, asset repurposing, and minimizing community and environmental impacts.
The project will be executed in partnership with the Rockefeller Foundation’s Coal to Clean Credit Initiative and the Monetary Authority of Singapore’s Transition Credits Coalition. It may also align with Article 6 of the Paris Agreement, which allows countries to transfer carbon credits earned from greenhouse gas reduction to assist others in meeting their climate targets. At COP28, the Singapore Government indicated its readiness to purchase Transition Credits that meet its rigorous environmental integrity standards.
This collaboration is not anticipated to materially affect Keppel’s earnings per share or net tangible assets per share for the current financial year.
