ACEN, GenZero, and Keppel Partner to Accelerate the Retirement of Coal-Fired Plants in Southeast Asia

Carbon, Energy, Environment, Solar

ACEN, GenZero, and Keppel Partner to Accelerate the Retirement of Coal-Fired Plants in Southeast Asia

ACEN, GenZero, and Keppel Ltd. have signed a Memorandum of Understanding (MOU) to jointly explore the use of Transition Credits (TCs) to expedite the retirement of the South Luzon Thermal Energy Corporation (SLTEC) coal-fired power plant (CFPP) in Batangas, Philippines, and replace it with a clean energy facility. Upon completion, this project is expected to be among the first coal-fired power plants globally to generate TCs, underscoring the partners’ commitment to promoting a just transition to clean energy in Southeast Asia.

Coal-fired power plants are the largest source of carbon emissions worldwide, and Southeast Asia has the fourth largest fleet of these plants, many of which are relatively new, with an average age of under 15 years. Retiring plants like SLTEC early is crucial for the region to achieve the Paris Agreement goals and reach global net-zero emissions targets by 2050.

The MOU signing was witnessed by key officials, including Grace Fu, Singapore’s Minister for Sustainability and the Environment, and Maria Antonia Yulo-Loyzaga, the Philippines’ Secretary for the Department of Environment and Natural Resources. Signatories included Cindy Lim, CEO of Keppel’s Infrastructure Division; Frederick Teo, CEO of GenZero; Cezar Consing, Chairman of ACEN; and Eric Francia, President and CEO of ACEN. Other notable attendees were Jaime Augusto Zobel de Ayala, Chairman of Ayala Corporation; Fernando Zobel de Ayala, Board Director of Ayala Corporation; and Jaime Alfonso Zobel de Ayala, Board Director of ACEN.

Under the MOU, the parties will conduct a development study to explore how TCs can be utilized to achieve the early retirement of the 246 MW SLTEC CFPP by 2030, ten years ahead of schedule. The initiative aims to support a just transition, focusing on environmental, social, and governance considerations, including worker training and community engagement.

Cindy Lim of Keppel emphasized the project’s potential to serve as a model for retiring coal-fired plants and replacing them with cleaner energy solutions. Frederick Teo of GenZero highlighted the importance of cross-border collaboration in achieving a just energy transition in Southeast Asia. Cezar Consing of Ayala Corporation expressed excitement about the partnership, and Eric Francia of ACEN noted the potential for the initiative to scale across the region and globally.

The project will also explore developing an Integrated Renewables and Energy Storage System (IRESS) to replace the baseload of the CFPP with solar power and battery storage. The collaboration will involve partners such as the Rockefeller Foundation’s Coal to Clean Credit Initiative (CCCI) and Singapore’s Transition Credits Coalition (TRACTION), potentially under Article 6 of the Paris Agreement, allowing carbon credits to be transferred between countries to meet climate targets.

The collaboration is not expected to materially impact Keppel’s earnings per share or net tangible assets per share for the current financial year.