ACEN, along with GenZero and Keppel Ltd., has signed a Memorandum of Understanding (MOU) to explore innovative financial mechanisms, such as Transition Credits (TCs), to facilitate the early decommissioning of the South Luzon Thermal Energy Corporation (SLTEC) coal-fired power plant in Batangas.

“We appreciate the strong support of Keppel and GenZero for this pioneering initiative. 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,” said ACEN CEO and president Eric Francia.

Under the agreement, the involved parties will collaborate on a development study to assess the use of Transition Credits (TCs) in advancing the project’s goals, including the early retirement of the 246-megawatt (MW) SLTEC coal-fired power plant in Calaca, Batangas, by a decade. 

Additionally, the origination and sale of TCs will contribute to supporting just transition initiatives.

Keppel’s Infrastructure Division CEO Cindy Lim said that this partnership provided the firm with opportunities to strengthen technological and financing solutions to fast-track the transition to low-carbon and renewable energy (RE) sources.

“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,” said Lim.

Upon completion, this project is set to become one of the world’s first coal-fired power plants (CFPPs) to be converted and generate Transition Credits (TCs). 

This effort stressed the partnership’s dedication to advancing a just and orderly transition to clean energy in Southeast Asia.

The project will develop a comprehensive strategy to transition from coal to clean energy. This plan involves replacing the 246 MW coal-fired power plant’s baseload with a mid-merit Integrated Renewables and Energy Storage System (IRESS), which integrates solar energy with battery storage.

In phasing out the SLTEC CFPP, the collaboration will emphasize strong environmental, social, and governance (ESG) standards. This approach includes initiatives such as retraining workers, repurposing assets, and decommissioning the plant in an environmentally and socially responsible manner, minimizing disruption to local communities and ecosystems.