ACEN Corporation President and CEO Eric T. Francia highlighted the company’s transformation from a coal-heavy portfolio to a renewables-focused leader, underscoring the importance of bold pivots and innovative financing in achieving a just energy transition.

Speaking at the Building a Sustainable Future through Just Energy Transition event, held by the SGV Knowledge Institute (SGV KI) and powered by SGV Sustainability, Francia recalled ACEN’s beginnings in 2011 with only a modest investment in a 33-megawatt wind project. At the time, however, the company relied heavily on coal to meet the country’s demand for reliable and affordable power. 

“We ended up with more than 93% of our portfolio based on coal and only 7% on renewables. But we believe that this is what the country needed, otherwise some of the lights may be off from time to time,” he said.

By 2016-2017, shifting market conditions and growing environmental, social, and governance (ESG) considerations pushed ACEN to pivot fully to renewables. The company now operates about 7,000 megawatts of renewable capacity in markets including Australia, India, Vietnam, Laos, Indonesia, and the United States.

Francia said ACEN pioneered the Early Transition Mechanism (ETM) in the Philippines, inspired by the Asian Development Bank. The ETM uses low-cost, purpose-driven capital to finance the early retirement of coal plants, with commitments to replace them with clean energy.

He cited the example of the SLTEC coal plant, which began operations in 2015. Instead of running for 40 to 50 years, ACEN committed to retire it by 2040. “We will only let it run until 2040. That will help reduce emissions by about 1.92 million metric tons per year or up to 50 million metric tons over the 25 years short of life,” Francia said.

Francia also pointed to transition credits, which were developed in cooperation with the Monetary Authority of Singapore and the Rockefeller Foundation. These high-integrity carbon credits are designed to fund accelerated coal retirement while ensuring proper replacement with clean energy and supporting affected communities.

“One special feature of this deal… we were encouraged to consider accelerating the retirement by 10 years. I said, no, that’s crazy. We will need financial support. Refinancing is not going to be enough. I will need a subsidy,” he said, noting that transition credits could close that gap.

Francia cautioned, however, against misleading claims that renewables are already cheaper than coal in all cases. “It’s not, if you compare apples to apples. It’s cheaper when the sun is shining and you don’t have a battery. But that’s an unfair comparison. You have to look at it from a whole system standpoint,” he explained.

For Francia, the challenge lies in balancing immediate energy needs with long-term sustainability. “We are truly hopeful that while there is need for more energy today, we also have to remember that energy transition, we should not lose out of sight,” he said.

He closed his talk by framing ACEN’s initiatives as proof of concept for the industry. “We are hopeful that our proof of concept is enough to spark a hope, to keep the burning desire alive, and to a path of human ingenuity to give our beloved planet a chance.”

As the Philippines and the region grapple with rising demand and climate imperatives, what bold steps should companies and policymakers take to accelerate a just energy transition?

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