Keppel has signed a memorandum of understanding with two Philippine companies to jointly explore the origination and utilisation of transition credits (TCs) to accelerate the retirement of a coal-fired power plant (CFPP) in Batangas, the Philippines.
The infrastructure arm of Keppel has joined forces with ACEN, GenZero and Keppel to decommission the South Luzon Thermal Energy Corporation (SLTEC) and replace it with a clean energy despatch facility.
ACEN is the listed energy platform of the Ayala Group with a fast-growing presence in the Philippines, Australia, Vietnam, India, Indonesia, Lao PDR and the US. The company currently accounts for 4.8GW of attributable renewables capacity in operation and under construction.
The project is expected to be one of the first converted CFPPs in the world to generate TCs.
The parties will jointly undertake a development study to explore the origination and sale of TCs would help to accelerate the decommissioning of the 246 MW SLTEC CFPP located in Calaca, Batangas by 10 years and also support just transition initiatives.
Cindy Lim, CEO of Keppel’s Infrastructure division, said: “This 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. The partnership provides us the opportunity harness both technological and financing solutions to accelerate the shift towards low-carbon and renewable energy sources in the Southeast Asia region.”
Frederick Teo, CEO of GenZero, said: “Cross-border collaboration is critical to achieve a just energy transition in Southeast Asia and help our economies achieve our decarbonisation objectives.
“Transition credits can help crowd in catalytic financing for such coal-to-clean energy initiatives. We are excited to partner with ACEN and Keppel to bring complementary expertise from the Philippines and Singapore to pilot a scalable model that can accelerate such decarbonisation efforts globally.”
Cezar Consing, Ayala Corporation CEO and ACEN chairman, said the partnership was an integral part of Ayala’s strategy and culture.
Eric Francia, president and CEO of ACEN, said: “The Philippines is at the forefront of energy transition initiatives, and this collaboration potentially unlocks further opportunities in the country. We also believe that this model can scale across the region, and even globally.”
The project will also explore the development of end-to-end technological solutions and economic model of the coal-to-clean transition focused on the replacement of the 246MW baseload of the CFPP with a mid-merit integrated renewables and energy storage system (IRESS) consisting of a solar plant and battery storage.
In retiring the SLTEC CFPP, the partners said they would also take into account environmental, social and governance considerations and best practices.
The project will be carried out in collaboration with the Rockefeller Foundation’s Coal to Clean Credit Initiative and the Monetary Authority of Singapore’s Transition Credits Coalition.
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