ACEN plans to replace SLTEC with $1.5B solar farm

ACEN [ACEN 4.00, up 0.5%; 131% avgVol] [link] confirmed a report that it plans to replace the 246 MW coal-fired power plant owned by South Luzon Thermal Energy Corp. (SLTEC) with a solar farm and energy storage system, and that the estimated cost of that new project is approximately $1.5 billion. ACEN said that it plans to retire SLTEC by 2030, and that it plans to begin construction of the replacement solar facility in 2027 or 2028. The solar facility will have a capacity of 1,400 MW in peak conditions, and the energy storage system will have a storage capacity of 1,600 megawatt-hours. 

MB bottom-line: Interestingly, ACEN said that it is planning to use “revenues generated from selling transition credits” to fund a portion of the project’s development. I’m curious to know how significant this funding source could be. It would be disappointing to learn that it’s just enough to get on a press release but not significant enough to entice other coal power operators to put their killer coal plants into early retirement. Because that’s what ACEN is doing here: it’s retiring SLTEC 10 years early. I just want more visibility into the financials of the deal to see if this is something that other operators could replicate, or if this is a feel-good one-off.

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