Mitsubishi reinforces ACEN’s coal phaseout

MANILA, Philippines —  Ayala-led ACEN Corp. has ramped up its push to retire a coal plant in Batangas ahead of schedule by joining forces with Japan’s Mitsubishi Corp. and its unit, Diamond Generating Asia Ltd.

Mitsubishi and DGA recently inked a deed of accession to the memorandum of understanding (MOU) signed last year by ACEN and partners GenZero and Keppel Ltd. to formally join the landmark partnership.

The new partners are poised to strengthen ACEN’s efforts to explore the use of transition credits in accelerating the early retirement of the 246-megawatt South Luzon Thermal Energy Corp. (SLTEC) coal plant.

The deal also involves developing end-to-end technological solutions to replace the generation output of the coal plant with clean and reliable energy.

ACEN president and CEO Eric Francia said the partnership with Mitsubishi and DGA marks a crucial step toward addressing the “enormous challenges” of energy transition.

“By pioneering the transition credits mechanism, we are not only accelerating decarbonization but also demonstrating a viable pathway for coal-dependent economies to transition sustainably,” Francia said.

Transition credits are a type of carbon credit earned when coal plants are decommissioned ahead of schedule and replaced with renewable energy (RE) sources.

Governments, investors and corporations may purchase such credits to offset their carbon footprint. The proceeds from the sale are typically allocated for the development of RE facilities.

Initially, ACEN committed to retiring SLTEC by 2040, slashing the plant’s typical 50-year technical life in half as part of the company’s bold energy transition push.