DUBAI, UAE -- The South Luzon Thermal Energy Corp (SLTEC) generating asset of Ayala-led ACEN Corporation is catching the attention of the world, as this has been tapped as a ‘candidate plant’ for transition credits that will potentially showcase to the world that earlier retirement or phaseout of coal plants can be viably achieved.

On a side event of the ongoing COP28 Climate Change Summit here, there was a ‘big reveal’ on the Ayala firm’s signing of a ‘letter of agreement’ with collaborative-partners Monetary Authority of Singapore (MAS) and The Rockefeller Foundation on employing transition credits to accelerate the retirement of coal plants by at least 10 years earlier from their typical operating life cycle.

Ashvin Dayal, senior vice president for Power & Climate at The Rockefeller Foundation, noted that “if we can succeed with this pilot that ACEN has signed up for, then we create a model that can be replicated for dozens or hundreds of power plants across the world.”

He explained “the idea if we get this right is: we would be able to retire the plant 10 years sooner than it would have actually be on its full normal life which would be until 2040, so that target is 2030.”

Dayal conveyed there’s high degree of excitement on this undertaking because “it’s the first one…and it will be a model not just to the Philippines, but for the whole world if we get it correct.”

To accurately calculate and set a pricing for the transition credits in the ACEN candidate-plant, Dayal indicated that the Verra methodologies will be enforced – as that is currently the world’s most widely used greenhouse gas (GHG) crediting program.

Due diligence on the facility will be carried out between January to March next year; and ACEN’s decision on the application of transition credits for that particular coal facility is expected to be rendered by April next year.

Pricing for the transition credits, according to Dayal, “will be part of the due diligence that we’re going to do – we’re going to use the Verra standard and Verra had just announced that methodology for this, which will go through consultation for the next few weeks – so that will form the basis for the pricing of the credits.”

ACEN President and CEO Eric T. Francia said “we are really committed to do this with speed and scale,” qualifying that this pilot initiative could serve as important game-changer in targeted retirement of coal plants globally, which is the rallying call in the COP28 climate change summit.

In pursuing that initiative, Francia opined that for the transition credits, “there’s a lot of commonality of vision and passion” that ACEN shares with its collaborative-partners.

With the Ayala firm plant being lined up for this trailblazing initiative, MAS Managing Director Ravi Menon qualified that “we have an outstanding pilot that we’re glad to collaborate on because this is an interesting idea to put into actual case.”

ACEN, he added, is an ideal contender because “their presence has a lot of credibility in what they are eyeing to achieve…they already started with the journey and they’ve already brought forward the decommissioning substantially.”

In addition, Rockefeller Foundation Managing Director Joseph Curtin cited the stance of Francia as “a very progressive leader of his company and he understands that coal is coming to an end; and renewables is beginning and he’s looking for an offer to a more sustainable future.”

He stressed “we need a courageous leader to be the first and Eric (Francia) is willing to be the first and so we want to support him in every way we can.”

Curtin qualified “we want to provide ACEN with technical support to understand what is the potential of transition credit today. By April next year, Eric will have an opportunity to assess if he wants to proceed on the basis of information that we will provide him.”

He qualified “right now, we’re still in that ‘learning by doing phase’; and he considers the announcement on Monday (December 4) as their initial but very major critical step on the acceleration of coal plants’ phaseout.