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First update on MAS’s coal plant retirement initiative since COP28

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First update on MAS’s coal plant retirement initiative since COP28

SINGAPORE: In a significant development, the Philippines-based Acen Corporation and The Rockefeller Foundation announced on April 17 that the first Coal to Clean Credit Initiative (CCCI) pilot project being considered in the Philippines could prevent up to 19 million tonnes of carbon dioxide emissions.

The Edge Singapore reported that the primary objective of the CCCI is to facilitate the transition from coal-fired power plants (CFPPs) to renewable energy sources by unlocking carbon finance.

The initial pilot project under consideration involves the closure of the South Luzon Thermal Energy Corporation (SLTEC) coal plant by 2030, a decade earlier than its scheduled retirement.

Acen Corporation, which divested from the 246-megawatt SLTEC in 2022, is spearheading efforts to coordinate the plant’s early closure in collaboration with its owners.

The goal of the project is to substitute SLTEC’s power output with renewable energy sources and battery storage, while also ensuring support for the affected workforce during the transition period.

Technical evaluation of the project’s feasibility has been conducted by RMI, a partner of The Rockefeller Foundation. This assessment, presented during the Financing Asia’s Transition (FAST) Conference, examines SLTEC’s eligibility for carbon financing. The findings indicate that early decommissioning by 2030 would require financial assistance to cover various associated costs.

Acen aims to finalise the Project Design Document (PDD) for the pilot by 2024, which will outline the strategies for a smooth transition, including community consultation and plans for an “affordable and reliable” clean energy adoption, through wind, solar, as well as battery.

Looking ahead, Acen aims to secure buyer agreements and achieve financial closure for what could be the world’s first coal-to-clean carbon credit transaction by 2025.

Acen, a subsidiary of the Ayala Group, is leading the charge in renewable energy development across key markets in the Philippines, Australia, Vietnam, India, and Indonesia. The company is focused on expanding solar and wind power capacities, with a recognition of the need for battery storage integration.

Mr Eric Francia, president and CEO of Acen, said in a presentation on April 17, We’re going to be building potentially 1,000MW of solar [power] and 250MW of wind [power]. The missing piece, though, is that if we did that, if we stopped there, we would put a lot of strain on the grid.

“So therefore, we need to incorporate battery storage, which is still expensive, and therefore we need to subsidise that through transition credits.”

This update marks the first progress report since COP28, where the partnership between Acen, CCCI, and the Monetary Authority of Singapore (MAS) was unveiled.

MAS views transition credits as a potential catalyst for encouraging the early retirement of coal assets and transitioning to renewable energy sources.

The Asian Development Bank (ADB) is also actively involved in facilitating the transition away from coal, advising the Philippine government on the retirement of coal plants through its Energy Transition Mechanism (ETM).

Ms Elizabeth Yee, executive vice-president of program strategy at The Rockefeller Foundation highlighted that coal remains a significant contributor to global emissions, saying, It accounts for 20% of global emissions and 70% of power emissions. And it is, most importantly, the leading cause of premature death in the world. Worldwide, 800,000 people perish early because of coal.”

Ms Yee, speaking at the FAST Conference during Temasek’s Ecosperity Week 2024, highlighted the worsening situation: “We’re seeing coal power growing by about 3% annually with over 1,000 plants coming online or being under construction. That’s a real problem.

She also added the urgency of addressing coal, noting when they dug into data that they didn’t like what they saw, stating, “We saw that solving for coal was an immediate urgent priority for us to ensure that we accelerate climate action, and also ensure that we protect the well-being of humanity.” /TISG

The post First update on MAS’s coal plant retirement initiative since COP28 appeared first on The Independent Singapore News - Latest Breaking News

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