During the Financing Asia’s Transition Conference, ACEN Corporation and The Rockefeller Foundation announced a pilot project called the Coal to Clean Credit Initiative (CCCI) in the Philippines in their efforts to combat climate change. The project aims to close the South Luzon Thermal Energy Corporation (SLTEC) coal plant 10 years early, by 2030, and replace it with clean power and battery storage.
The analysis conducted by RMI, with support from The Rockefeller Foundation, revealed that this early retirement and transition to renewable energy could avoid up to 19 million tons of carbon dioxide (CO2) emissions. The project’s eligibility for carbon financing was assessed using the draft methodology of the CCCI, which is currently under review by Verra. It was found that the project meets the criteria and would not be possible without carbon finance.
Eric Francia, President & CEO of ACEN Corporation, expressed his delight at confirming the project’s eligibility, stating that it sets the stage for the development of a successful pilot project. Dr. Rajiv J. Shah, President of The Rockefeller Foundation, emphasized that this pilot project can provide valuable data and lessons to replicate similar approaches in other emerging markets, potentially reducing billions of tons of carbon emissions globally.
The Coal to Clean Credit Initiative aims to accelerate the phase-out of coal plants in emerging economies and incentivize their replacement with clean power. This is crucial because there are over 6,500 coal-fired units worldwide that, if operated until their scheduled retirement, will collectively emit an estimated 190 billion tons of CO2. The initiative also focuses on supporting the livelihoods of affected workers during the transition.
ACEN Corporation and CCCI are working with the Monetary Authority of Singapore (MAS) to advance the project. ACEN plans to complete the Project Design Document (PDD) by 2024, which will provide detailed plans for the just transition of affected communities and workers, as well as the decommissioning of SLTEC. By 2025, ACEN aims to finalize buyer discussions and reach a financial close for this groundbreaking coal-to-clean carbon credit transaction.
ACEN Corporation, as a renewable energy platform, is committed to increasing its renewable capacity to 20 GW by 2030 and achieving 100% renewable energy in its generation portfolio by 2025. The Rockefeller Foundation, a leading philanthropic organization, is focused on transforming systems in food, health, energy, and finance to promote human opportunity and address the climate crisis.
Replacing the South Luzon Thermal Energy Corporation (SLTEC) coal plant in the Philippines with renewable energy has the potential to cut up to 19 million tons of carbon dioxide (CO2) emissions, according to an analysis conducted by RMI with support from The Rockefeller Foundation. This early retirement and transition to clean power and battery storage is part of the pilot project called the Coal to Clean Credit Initiative (CCCI) announced by ACEN Corporation and The Rockefeller Foundation.
One key advantage of replacing the coal plant with renewable energy is the significant reduction in greenhouse gas emissions. The Philippines, like many other countries, is committed to reducing its carbon footprint and combating climate change. By closing the coal plant early and shifting to clean power, the country can make significant progress towards its climate goals.
Another advantage is the potential for job creation and economic growth. The transition to renewable energy will require the development and deployment of new technologies, infrastructure, and services, which can create employment opportunities. Additionally, renewable energy projects can attract investments and stimulate economic development in the region.
However, there are also challenges and controversies associated with the transition. One challenge is the cost of renewable energy technologies and infrastructure. While the long-term benefits are significant, the initial investment may be substantial. Finding the necessary funding and ensuring affordability for consumers can be a hurdle.
Another challenge is the need for a smooth and just transition for affected workers and communities. Coal plant closures can have an impact on local economies and livelihoods. It is crucial to provide support and alternative employment options for workers in affected industries and ensure the well-being of communities during the transition.
In terms of market trends, the global shift towards renewable energy is gaining momentum. Many countries, including the Philippines, have set renewable energy targets and are actively investing in clean energy projects. The declining costs of renewable technologies, such as solar and wind, make them increasingly competitive with fossil fuels.
Forecasters predict continued growth in the renewable energy sector, driven by advancements in technology, supportive policies, and increasing awareness of the environmental and economic benefits. This growth is expected to lead to a decline in coal-fired power generation globally.
Overall, replacing the SLTEC coal plant with renewable energy in the Philippines presents an opportunity to significantly reduce CO2 emissions, create jobs, and contribute to the country’s climate goals. However, it will require careful planning, financial support, and a just transition for affected workers and communities.
Suggested related link: RMI News – Replacing a Philippines Coal Plant with Renewable Energy Could Cut 19 Million Tons of CO2 Emissions