COP28: The Rockefeller Foundation, ACEN Corporation, Monetary Authority of Singapore Partner to Explore Phasing Out Coal Plant in Philippines

The project, the South Luzon Thermal Energy Corporation (SLTEC) coal plant, would become the world's first coal-fired power plant to leverage carbon credits to enable its early decommissioning. While financial tools are already in place to support the early retirement of coal-fired power plants and their replacement with clean power, these are challenging to deploy in emerging markets and developing economies (EMDEs). The partners will explore the viability of an early retirement and repurpose the plant towards cleaner energy options as early as 2030, a decade ahead of its current retirement date. 

Launched in June 2023, CCCI's 'coal-to-clean' credits will aim to incentivize a just transition away from coal plants to clean energy in EMDEs, while also generating funding to support just transition plans that would invest in routes to new employment, entrepreneurship, and reskilling for workers in communities that have traditionally relied on the fossil fuel economy for their livelihoods. 

"Today's development marks a critical contribution to accelerating a global energy transition. Without a rapid and proactively managed transition away from coal-fired power, the world will not meet its climate goals; the urgency of solving this problem cannot be understated. ACEN is proud to be working with The Rockefeller Foundation's Coal to Clean Credit Initiative and the Monetary Authority of Singapore to develop this world-first project," said Eric Francia, President & CEO of ACEN Corporation, which has ~4,500 megawatt (MW) of attributable capacity in the Philippines, Australia, Vietnam, Indonesia, and India, with a renewable share that is among the highest in the region.

CCCI is also helping countries to work together and raise their climate ambitions through the growth of regulated carbon markets under the Paris Agreement.

"The economics of phasing out coal fired power plants are challenging. There is a need for effective market-based financing solutions, including the use of transition credits to improve the economic case of retiring these plants early and we are pleased to collaborate with ACEN Corporation and Climate Smart Ventures to pilot the use of CCCI's methodology. Through the pilot transactions that MAS has convened, we hope to road-test and learn from different approaches that can catalyze the use of high-integrity transition credits to support the early retirement of coal plants on a significantly larger scale," said Gillian Tan, Assistant Managing Director and Chief Sustainability Officer, Monetary Authority of Singapore

CCCI is working with the COP28 Presidency to secure interest and engagement from more sovereign buyers and gain high-level interest from power producers in EMDEs, making the first use of 'transition credits' a nearer-term reality.

The work on the pilot is subject to CCCI's project methodology being approved by Verra, a leading global carbon standard, the conclusion of the public consultation, and its application to the pilot project. The methodology enables organizations seeking to develop bespoke coal-to-clean energy projects that prioritize the needs of local communities, and issue transition credits to global buyers.

Once finalized after the consultation, launched today and running from December 4 2023 to January 16 2024, CCCI's methodology would be expected to facilitate one of the first transactions of transition credits in the global carbon markets, either for voluntary use or compliance purposes. As such, it would help with the operationalization of Article 6 of the Paris Agreement while supporting sovereign efforts to limit global warming to 1.5°C.

"The transition from coal-to-clean energy in emerging markets is stuck," added Dr. Joseph Curtin, Managing Director of the Power and Climate team at the Rockefeller Foundation. "We need new solutions that can support the retirement of a fleet of coal fired power plants across the globe. Today's announcement could be the first of many, if we can prove it's possible, which we hope to do next year."

Supportive Statements

Notes to Editors

About The Rockefeller Foundation

The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We make big bets to promote the well-being of humanity. Today, we are focused on advancing human opportunity and reversing the climate crisis by transforming systems in food, health, energy, and finance. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on X @RockefellerFdn.

About the Coal to Clean Credit Initiative (CCCI)

The Coal to Clean Credit Initiative (CCCI) is a consortium of global experts, led by The Rockefeller Foundation and supported by the Climate Policy Initiative and South Pole. RMI (founded as Rocky Mountain Institute) provided technical support for the creation of the draft methodology. The consortium is focused on ensuring that CCCI's methodology is established according to the highest level of environmental integrity, technical best-practice, and credible, cross-societal stakeholder engagement.

The draft methodology, currently under review by Verra, has been developed in a transparent and inclusive manner over the past 18-months, with input from a technical advisory group of leading experts, and considering real-world cases that are most suitable for the generation of coal-to-clean credits. CCCI has already hosted five global and local consultations (two in Indonesia) on earlier versions of the methodology, where it received buy-in from a cross-section of energy market participants, NGOs, and civil society organizations. The draft methodology will invite two rounds of public comment through a consultation process led by Verra in 2024.

CCCI aims to set a new benchmark for carbon-financed coal transition projects, accelerating the managed and equitable phase-out of coal-fired power plants while incentivizing their replacement with clean power. By providing a nearer-term opportunity at a project level, CCCI's methodology can align with jurisdictional approaches and incentives for system-level decarbonization if they are introduced.

At the forefront of the methodology is the recognition that workers and communities will require investment and support to manage the coal-to-clean transition. To this end, CCCI's methodology will require that a share of carbon revenue is reserved to meet the needs outlined in a project-level just transition plan and ensure communities are not left behind.

CCCI's project approach recognizes that coal-fired power plants are strategic assets operating within a national power system, and that their accelerated retirement requires careful consultation with local and federal/national authorities and a consideration and evaluation of  potential system-wide impacts. CCCI will also be intentionally designed to integrate with existing and future compliance and voluntary markets.

For this reason, CCCI complements other carbon market and public climate finance initiatives that are focused on delivering this same ambition, while working on an accelerated transition timeline. For example, CCCI can help to unlock the private financing needed for larger-scale initiatives, such as Just Energy Transition Partnerships. It can also promote broader carbon market development, by growing the supply of high-integrity credits and setting clear standards for buyers.

CCCI will continue to share expertise with stakeholders and other coal transition initiatives, including carbon standards, international finance institutions, and other organizations working on financial mechanisms. CCCI will continue to engage with stakeholders in developing this new benchmark for coal-to-clean projects.

About the Monetary Authority of Singapore (MAS)

The Monetary Authority of Singapore (MAS) is Singapore's central bank and integrated financial regulator. As a central bank, MAS promotes sustained, non-inflationary economic growth through the conduct of monetary policy and close macroeconomic surveillance and analysis. As an integrated financial supervisor, MAS fosters a sound financial services sector through its prudential oversight of all financial institutions in Singapore and financial market infrastructures. It is responsible for well-functioning financial markets, sound conduct, and investor education. MAS also works with the financial industry to promote Singapore as a dynamic international financial center.

In September 2023, MAS and McKinsey & Company jointly published a working paper that sets out how high-integrity carbon credits can be utilized as a complementary financial instrument to accelerate and scale the early retirement of coal-fired power plants (CFPPs). The paper considers the use of Transition Credits, which are high-integrity carbon credits generated from the emission reduced through retiring a CFPP early and replacing it with clean energy sources, to reduce the economic gap for early retirement of CFPPs.

To further develop the approach and establish solutions for Transition Credits to be utilized as a viable market solution, MAS launched the Transition Credits Coalition (TRACTION) MAS also collaborated with partners to test the feasibility of integrating transition credits for early CFPP retirement through pilot projects. For more details, please refer to https://www.mas.gov.sg/development/sustainable-finance/transition-credits

About ACEN

ACEN (PSE:ACEN) is the listed energy platform of the Ayala Group. The company has ~4,500 MW of attributable capacity from owned facilities in the Philippines, Australia, Vietnam, Indonesia and India, with a renewable share of 98%, which is among the highest in the region.

ACEN's aspiration is to be the largest listed renewables platform in Southeast Asia, with a goal of reaching 20 GW of renewables capacity by 2030. ACEN is committed to transition the company's generation portfolio to 100% renewable energy by 2025 and to become a Net Zero greenhouse gas emissions company by 2050.

https://www.acenrenewables.com

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