AC Energy pursues early retirement of coal plant
BY LENIE LECTURA – APRIL 6, 2022
from Business News
AC ENERGY Corp. (ACEN) has moved to pursue the early retirement of its remaining coal plant under South Luzon Thermal Energy Corporation (SLTEC) in line with the parent firm’s “net-zero” target through year 2050.
This after the Executive Committee of ACEN has approved some of the requirements for the refinancing of SLTEC.
“The Executive Committee approved today the execution by ACEN, as the project sponsor of SLTEC, of relevant documents for the refinancing of SLTEC under an energy transition financing with certain Philippine banks as lenders,” it said in a disclosure last Tuesday.
Also, ACEN President Eric T. Francia and Chief Finance Officer Maria Corazon G. Dizon were authorized by the committee to finalize the terms and conditions of the said documents and the list of lenders for SLTEC’s energy transition financing.
ACEN, which earlier vowed to transition its generation portfolio to 100-percent renewable energy by 2025, will also use the Energy Transition Mechanism (ETM) for the early retirement of the 270-megawatt (MW) coal plant by 2040, 15 years ahead of its technical life.
The ETM is an innovative funding mechanism that leverages low-cost and long-term funding geared towards early coal retirement and reinvestment of proceeds to enable renewable energy.
The board approved in October last year to leverage on the innovative ETM to enable the earlier transition of the coal plant to a cleaner technology,
BPI Capital Corp. will be the lead arranger for the ETM for SLTEC.
One option to execute this is for the company to possibly carry out the operation and maintenance (O&M) of the plant even if it is sold.
“An asset divestment does not necessarily translate to a separation or termination of the O&M arrangement,” Francia said. “We have to make sure that in whatever transaction we enter into entails ensuring O&M to the highest standard, whether that’s us or new investors.”
ACEN and global climate solutions provider South Pole are now working to achieve net zero greenhouse gas emissions by 2050.
Both will develop a detailed greenhouse gas footprint that includes all relevant Scope 3 emissions from the value chain, which is considered net zero best practice; assess potential emission reduction activities and strategies to help ACEN prioritize and budget for these interventions across its core business units, ensuring practical steps are taken to reduce emissions as quickly as possible; and establish interim targets aligned with a science-based 1.5°C pathway across the core business units to ensure ACEN has robust and measurable milestones along its journey to net zero by 2050.
“Being at the forefront of the energy transition goes hand in hand with our commitment to Net Zero,” said Francia. “We will work closely with the Ayala group and continue to collaborate with our stakeholders as we carry out this important journey.”
