AC Energy (ACEN), the power arm of the Ayala Group, is transitioning its generation portfolio to 100% renewable energy (RE) by relinquishing all thermal assets by 2025 through a “property-for-share-swap” scheme with subsidiary ACE Enexor (ACEX).
In a disclosure to the Philippine Stock Exchange on Monday, ACEN said the business shift is in full support of the Net Zero global movement to achieve zero greenhouse gas emissions by 2050. The movement is gaining traction worldwide as 59 countries have communicated net-zero emissions targets, including the United States and China – two of the world’s largest emitters.
Under the “property-for-share-swap” scheme, ACEN would spin-off all its thermal assets by 2025 by assigning 100% of its equity in Palawan 55 Exploration and Production Corporation, Bulacan Power Generation Corporation (BPGC), One Subic Power Generation Corporation (OSPGC), CIP II Power Corporation, and Ingrid3 Power Corporation, valued at Php3.39 billion, in exchange for 339 million primary shares from ACEX at Php10 per share.
In a separate disclosure, ACEX said it would undergo a stock rights offer of up to 105 million shares at Php10 apiece. ACEX, through Palawan 55, is the majority owner of the Service Contract 55 exploration block in the West Philippine Sea.
BPGC operates a 52-megawatt (MW) diesel power plant in Norzagaray, Bulacan. It also owns OSPGC, which has a 116MW diesel power plant inside the Subic Bay Freeport in Olongapo City.
CIP II operates a 21MW diesel plant in Bacnotan, La Union, while Ingrid3 is developing a 1,200MW dual-fuel power plant in Batangas City.
ACEN said will also be working towards the early retirement of its 270MW South Luzon Thermal Energy Corporation coal plant in Calaca, Batangas by 2040 — 15 years ahead of its technical life. This would be done through the use of the Energy Transition Mechanism, a funding scheme that leverages low cost and long-term funding geared towards early coal retirement and reinvestment of proceeds in favor of RE.
AC Energy President and CEO Eric Francia said last year that the company is dropping coal from its portfolio. Since then, it has divested from the GNPower Kauswagan plant in Lanao Del Norte. It also plans to let go of its stakes in the Mariveles and Dinginin plants in Bataan.
While ACEN is working towards its goal of having 5,000MW in RE portfolio, also by 2025, it currently has thermal assets, mainly catering to ancillary services and to address the energy transition process.
On Tuesday, the Ayala-led firm announced the takeover of its joint venture with UPC Renewables in Australia.