Ayala-led ACEN Corporation has broadened partnership deals with two Singaporean firms for transition credits (TC) trading that could financially support the advanced retirement of its 246-megawatt South Luzon Thermal Energy Corporation (SLTEC) coal-fired power plant in Batangas.

The latest memorandum of understanding (MOU) for that transformative journey was sealed by the Ayala energy firm with GenZero, which is a decarbonization investment platform under Singapore’s Temasek; and also with sustainability anchored Singaporean infrastructure firm Keppel Ltd.

ACEN President and CEO Eric Francia emphasized that the deal with GenZero and Keppel will “potentially unlock further opportunities in the country” – primarily on the sphere of transition credits trading for the phasedown or phaseout of coal plants; while emphasizing that the model they are working on “can scale across the region, and even globally.”

According to the Ayala firm, the coal retirement project will be undertaken in collaboration with the Rockefeller Foundation’s Coal to Clean Credit Initiative (CCCI) and the Monetary Authority of Singapore’s (MAS) Transition Credits Coalition (TRACTION) – and this trailblazing initiative shall be carried out in line with Article 6 of the Paris Agreement, which enables the transfer of carbon credits across countries for greenhouse gas emissions reduction.

To that end, GenZero CEO Frederick Teo highlighted that “cross-border collaboration is critical to achieve a just energy transition in Southeast Asia and help our economies achieve our decarbonization objectives.”

He explained “transition credits can help crowd in catalytic financing for such coal-to-clean energy initiatives,” as he added that their tie-up with ACEN could yield “complementary expertise from the Philippines and Singapore to pilot a scalable model that can accelerate such decarbonization efforts globally.”

The newly signed MOU with GenZero and Keppel, ACEN expounded, requires the relevant parties to “jointly undertake a development study to explore utilizing TCs to facilitate the project’s implementation and achievement of the early retirement goal.”

Cindy Lim, CEO of Keppel’s Infrastructure Division, asserted that the project “will serve as a pathfinder and pave the way for more coal-fired power plants to be retired and replaced with cleaner energy facilities.”

She qualified “the partnership provides us the opportunity to harness both technological and financing solutions to accelerate the shift towards low-carbon and renewable energy sources in the Southeast Asia region.”

As targeted, the sale of transition credits to offshore funders must accelerate the decommissioning of the SLTEC coal plant by 10 years – prospectively by 2030 to support ‘just transition initiatives’ that shall abate climate change risks.

ACEN specified that upon the project’s completion, its SLTEC coal plant will be the first converted fossil fuel facility that will generate economically viable transition credits.

“This pioneering initiative reflects the shared commitment of the partners to accelerate the orderly and just transition to clean energy in Southeast Asia. CFPPs (coal-fired power plants) are the single largest source of carbon emissions globally,” the Ayala energy firm stressed.

Ayala Corporation CEO and ACEN Chairman Cezar Consing underscored that the newly cemented partnership with the Singaporean firms “is an integral part of Ayala’s strategy and culture,” adding that “we look forward to this potential partnership among regional champions in energy transition.”

Beyond the retirement of the SLTEC coal-fed facility, the collaborative partners will similarly “explore the development of end-to-end technological solutions and economic model” for capacity replacement to the decommissioned generating asset.

One viable option seen by ACEN will be prospective offer of mid-merit capacity that may be drawn from the integrated renewables and energy storage system (IRESS) investment platform that the Department of Energy (DOE) is eyeing to include in the next green energy auction (GEA) for RE capacities.