ACEN Accelerates Transition to Renewable Energy with Pioneering Coal Retirement Initiatives
Nov. 28, 2024, Manila — ACEN, the listed renewable energy platform of the Ayala Group, is marking a decade of transformative growth in renewable energy. From its establishment in 2011, ACEN has rapidly scaled up its portfolio to 6.8 GW of renewable energy capacity, with a footprint spanning the Philippines, Australia, Vietnam, India, and Indonesia. The company is now setting its sights on 20 GW of renewables by 2030 and achieving net-zero greenhouse gas (GHG) emissions by 2050.
Transitioning from Coal to Renewables
ACEN’s journey began with a modest investment in a 33 MW wind farm but initially leaned heavily on coal to meet the country’s energy demands. By 2016, the company’s portfolio included over 1,000 MW of capacity, of which 93% was coal-fired. However, a strategic pivot towards sustainability saw ACEN divest its coal assets and reinvest in renewables. Today, renewables account for the majority of the company’s capacity, positioning ACEN as a regional leader in clean energy.
Pioneering the Energy Transition Mechanism
In November 2022, ACEN successfully implemented the world’s first market-based Energy Transition Mechanism (ETM), involving the 246 MW South Luzon Thermal Energy Corp. (SLTEC) coal plant. This groundbreaking initiative commits to the early retirement of the coal plant by 2040—half its typical operating lifespan—and its transition to cleaner technology. Supported by Philippine banks BPI and RCBC, and equity investments from GSIS and Insular Life, the ETM is set to prevent up to 50 million tons of carbon emissions.
Recognizing the need for more ambitious timelines, ACEN has also retained the option to retire SLTEC as early as 2030, pending the emergence of suitable incentive mechanisms.
Driving Innovation with Transition Credits
A key component of ACEN’s strategy is the development of Transition Credits (TCs), high- integrity carbon credits that support early coal plant retirement, clean energy replacement, and a just transition for all stakeholders. This initiative is backed by global partners, including the Monetary Authority of Singapore (MAS) and Rockefeller Foundation’s Coal to Clean Credit Initiative (CCCI).
During COP28, ACEN announced its collaboration with MAS and CCCI to pilot the world’s first coal-to-clean credit project. The pilot seeks to accelerate SLTEC’s transition to clean energy by 2030, a decade earlier than planned. Proceeds from Transition Credits will ensure financial and social stability for workers, communities, and stakeholders while supporting the development of a replacement renewable energy facility.
Investing in Integrated Renewables and Energy Storage
To replace SLTEC’s 246 MW baseload capacity, ACEN plans to build a 400 MW mid-merit Integrated Renewables and Energy Storage System (IRESS). This $1.5 billion project will feature a 1,400 MWp solar plant integrated with a 1,600 MWh battery energy storage system, ensuring reliable and dispatchable power that meets grid requirements.
A Scalable Model for Climate Action
With the support of partners like GenZero and Keppel Infrastructure, ACEN aims to set a global benchmark for energy transition initiatives. By adhering to the highest standards of integrity and incorporating Article 6 mechanisms, the Transition Credit initiative is designed to catalyze similar projects worldwide.
“Our journey reflects the immense potential of transition credits to drive meaningful, scalable climate action,” said ACEN senior vice president for Sustainability, Irene Maranan. “While challenging, these efforts are essential to achieving a sustainable energy future for Southeast Asia and beyond.”
In photo L-R: Cezar Consing, Ayala Corporation president & CEO and ACEN chairman; Eric Francia, ACEN president & CEO; Fernando Zobel de Ayala, Ayala Corporation board director; Maria Antonia Yulo-Loyzaga, DENR secretary of the Philippines; Grace Fu, Minister for Sustainability and the Environment of Singapore; Jaime Augusto Zobel de Ayala, Ayala Corporation chairman; Jaime Alfonso Zobel de Ayala, ACEN board director; Frederick Teo, GenZero CEO; Cindy Lim, CEO, Keppel’s Infrastructure Division
ACEN president and CEO Eric Francia joined key figures in a panel discussion entitled “Harnessing Transition Credits to Drive a Coal to Clean Transition in Emerging Markets” that explored how transition credits can catalyze the early retirement of coal plants.
