Keppel, ADB to explore Asia-Pacific energy transition

Singapore conglomerate Keppel has signed an agreement with the Asian Development Bank (ADB) and Enterprise Singapore (EnterpriseSG) to explore $800mn worth of decarbonisation projects and blended finance opportunities in Asia-Pacific.

Keppel, ADB, and EnterpriseSG will focus on energy transition and environmental sustainability projects,said Keppel on 20 August, and the firms are targeting a total project value in excess of $800mn over 2025-30. The projects will collectively be able to abate at least 1mn t/yr of CO2 equivalent, once they are completed.

Keppel will develop and operate these projects, which include the decarbonisation of power generation, renewable energy, electric mobility and green buildings, as well as water treatment, and resource recovery from waste including bio-energy and waste-to-energy in Asia-Pacific.

The firms will also collaborate on blended finance and explore the potential use of concessionary financing, which "will further improve bankability, support development outcomes, and help mobilise private investment for the projects," said Keppel. The collaboration will begin with opportunities in southeast Asia, although more details were not provided.

Carbon credits to accelerate coal-fired phaseout

Keppel last week also signed an agreement with Philippine energy firm Acen and Temasek subsidiary and investment platform GenZero to accelerate the retirement of the 246MW South Luzon coal-fired power plant in Batangas, the Philippines, through the use of carbon credits, and replace it with a clean energy despatch facility.

The firms will jointly explore the origination and utilisation of Transition Credits (TCs), which are high-integrity carbon credits generated from the emissions reduced through retiring a coal-fired power plant early and replacing this with clean energy sources. They serve as a complementary financing instrument to reduce the economic gap for the early retirement of these plants.

The project is expected to be one of the first converted coal-fired plants in the world to generate TCs, said the firms. The origination and sale of the TCs will help to finance and expedite the retirement of the 246MW South Luzon power plant by 10 years to 2030, as well as support just transition initiatives.

The firms will collaborate with the Rockefeller Foundation's coal to clean credit initiative (CCCI) and the Monetary Authority of Singapore's (MAS) Transition Credits Coalition (Traction).

The project will "explore the development of end-to-end technological solutions and economic model of the coal-to-clean transition," said Keppel, and will focus on the replacement of the South Luzon plant with a mid-merit integrated renewables and energy storage system consisting of solar plant and battery storage.

The project "could also come under Article 6 of the Paris Agreement collaboration between the Philippines and Singapore," said the firms. Singapore and the Philippines last week signed an agreement to collaborate on cross-border trade of carbon credits, whereby the countries will work towards a legally binding implementation agreement on carbon credits, to develop high-integrity carbon markets.

By Joey Chan and Prethika Nair