By 2025, AC Energy Corp.’s (ACEN) portfolio will be 100-percent renewable. On Tuesday, the power arm of conglomerate Ayala Corp. said the board approved this transition as part of the company’s commitment to achieve net zero emissions by 2050.
Net zero is a global movement to achieve zero net greenhouse emissions to limit global warming to 1.5 degrees Celsius by 2050.
“Transitioning the company’s generation portfolio to 100 percent renewable energy by 2025,” AC Energy said.
To achieve this, the company will retire its 270-megawatt (MW) coal plant operated by South Luzon Thermal Energy Corp. (SLTEC) by 2040, or 15 years ahead of the plant’s technical life.
When asked to elaborate, the power firm said its coal divestment policy remains, but in addition to this, “we will work towards an early retirement and transition to cleaner technology for SLTEC.”
“We will ensure that the divestment process incorporates the just transition approach,” said ACEN President and CEO Eric Francia. “This means that we will work towards an early retirement of SLTEC coal plant, targeting 2040 or 15 years earlier than its technical life, and transition SLTEC to a cleaner technology.”
The coal plant is located in Calaca, Batangas. AC said the retirement approach for the plant will make use of an Energy Transition Mechanism (ETM), which leverages low cost and long-term funding geared towards early coal retirement and reinvestment of proceeds to enable renewable energy.
BPI Capital Corp. is the lead arranger for the ETM for SLTEC.
Part of its move to fully generate power via renewable energy is to spin off all its thermal assets by 2025. This will be done via share-swap with ACE Enexor Inc. whereby ACEN will assign 100 percent of its equity in Palawan 55 Exploration and Production Corp., Bulacan Power Generation Corp., One Subic Power Generation Corp., CIP II Power Corp., and Ingrid 3 Power Corp., valued at P3.339 billion, in exchange for 339 million primary shares at P10 per share.
Separately, ACEN said it will acquire the remaining 51.6-percent stake in UPC\AC Renewables Australia joint venture to raise its ownership in the renewables development platform to 100 percent.
ACEN, through its subsidiary AC Renewables International Pte Ltd, will acquire the interest of its joint venture partner UPC Renewables Asia Pacific Holdings and Anton Rohner in UPC\AC Renewables Australia for $ 243.3 million.
The sellers will in turn subscribe to up to 942 million common shares of ACEN with a subscription price of P11.32/share.
The deal is still subject to regulatory approvals.
“This transaction marks a strategic pivot for ACEN, as the company embarks on its first wholly owned development and operations platform outside of the Philippines,” said Francia. “We are excited to scale up investment in our Australia platform, as we expect the country to accelerate its energy transition.”
Since its formation in 2018, UPC\AC Renewables Australia has developed over 8,000 MW of renewable energy pipeline across New South Wales, Tasmania, Victoria, and South Australia and is currently constructing the 520 MW New England Solar Farm.
ACEN has about 2,600 MW of attributable capacity in the Philippines, Vietnam, Indonesia, India and Australia. The company’s renewable share of capacity is at 80 percent, among the highest in the region.
ACEN’s aspiration is to become the largest listed renewables platform in Southeast Asia, with a goal of having 5,000 MW of renewables capacity by 2025.