ACEN, GenZero, Keppel join to catalyse retirement of coal-fired plants in Southeast Asia.(Photo: ACEN)
On the 16th, Philippine energy giant ACEN, Singapore’s green investment company GenZero, and multinational company Keppel signed a memorandum of understanding to develop clean energy solutions aimed at helping coal-fired power plants retire early and obtain "transition credits." If successful, this could become a global first.
Singapore and Philippines cross-national collaboration
By the end of 2023, ACEN, along with the Rockefeller Foundation and the Monetary Authority of Singapore, will jointly promote the "Coal to Clean Credit Initiative" (CCCI). The goal is to retire the 246 MW coal-fired power plant in Batangas, operated by South Luzon Thermal Energy Corporation, ten years ahead of schedule. The signing of this agreement signifies the addition of new partners.
Founded in 2022, GenZero focuses on nature-based decarbonization solutions and, like Keppel, is backed by Singapore's sovereign wealth fund, Temasek. ACEN, on the other hand, is supported by the Ayala Group, one of the Philippines' major conglomerates.
According to the Monetary Authority of Singapore’s website, large coal-fired power plants in Asia were established relatively recently and have long operational lifespans. They require additional financial mechanisms to facilitate early closure. Consequently, they collaborated with McKinsey & Company in 2023 to introduce the concept of "transition credits." These credits are obtained through reduced carbon emissions during the process of transitioning coal-fired power plants, serving as an investment incentive.
Coal-fired power plants in Southeast Asia have not yet reached their natural retirement time. (Photo: iStock)
CIX CEO suggests transition credits price starting at $30
Transition credits must meet global standards, such as the Core Carbon Principles (CCP) of the Integrity Council for the Voluntary Carbon Market (ICVCM) and the quality requirements under Article 6 of the UN Framework Convention on Climate Change (UNFCCC). The Singapore government believes that high-quality transition credits can address the shortcomings of conventional financial mechanisms and accelerate and expand the early retirement of coal-fired power plants.
Mikkel Larsen, CEO of the Singapore carbon trading platform Climate Impact X (CIX), has suggested that transition credits should be priced at least $30 per ton to stimulate investment and accelerate the transition.
GenZero’s statement indicates that this collaboration will also seek technological and economic models for transitioning from coal to clean energy, including solar power plants and energy storage systems. The transition credits obtained in the future may be transferred internationally under Article 6 of the Paris Agreement to meet climate goals for both the Philippines and Singapore.
Source: Philstar、GenZero、Straits Times
