Transition Credits Gives Boost To Coal-To-Clean Project

Embracing green energy involves innovation, and more importantly, courage. It’s not only a matter of shifting away from old technology. Making the change means reconfiguration, which can be a difficult task when you’ve relied on the old system for so long.

If the Philippines is to move away from coal-fired power plants, then there needs to be some form of financial assistance to smoothen the transition. ACEN Corp. CEO Eric Francia believes that transition credits can play a pivotal role in the country’s shift towards cleaner energy.

“We rise to the challenge, thanks to transition credits,” he said during the recent 2024 Climate Week NYC. “We believe that this is a huge opportunity to show the world that it can be done.”

Accelerating The Transition

Transition credits are part of ACEN’s coal-to-clean pilot project, which aims to accelerate the transition to green energy by using carbon finance to phase out coal-fired power plants and replace them with renewable energy, such as wind and solar. 

This type of financing is designed to aid transitions from coal to renewable energy. It can help fill the gaps in resources, land acquisition, infrastructure, and technological updates.

The pilot project will be used to fast-track the retirement and eventual conversion of the 246 MW South Luzon Thermal Energy Corp. coal-fired power plant in Batangas City by 2030 into a renewable energy source. ACEN has other similar projects lined up in other Southeast Asian countries, believing that the region can serve as a model for the rest of the world.

Long Term Sustainability

“One of the challenges that we need to overcome is the global south mindset that we did not cause this global problem of climate change,” Francia said. “It is a challenge to overcome that mindset because that leads to inaction or a passive mindset.”

The project aims to convert the South Luzon coal-fired power plant to a clean energy dispatch 10 years earlier than its projected life span, which will serve as a huge boost to the country’s long-term energy goals.

In the Philippines, coal-fired power plants still account for 60% of the total energy mix. While renewable energy use has increased over the years, making up 22% of the country’s energy sources as of 2023, the goal is to hit 25% by 2030, and eventually 50% by 2040.

Out With The Old, In With The New

Transition credits could help the Philippines not only reach these long-term targets, but even surpass them by accelerating the conversion of coal-fired power plants into renewable energy generators.

Coal-fired power plants are major sources of carbon emissions, which are greatly responsible for climate change. There are currently still 60 coal-fired power plants in the country. Making them obsolete and transitioning to green energy could lead to powerful and lasting change that could be felt for generations.

Source: Transition credits catalyst for decarbonization – ACEN