By Myrna Velasco | Manila Bulletin
While other Filipino companies are still starry-eyed doodling project ideas or slow to take off from drawing boards, ACEN Corp is already way ahead, turning blueprints into concrete, thriving green gigawatts – and it’s not just within its shores; it’s taking the frontlines on the global stage of the clean energy revolution.
As one of the major investment driving forces of the Ayala group, ACEN is turning this Filipino conglomerate into a heavyweight brand in global energy markets – and it’s doing so in a roaring, clear, and impossible-to-ignore way.
At this point, ACEN President and CEO Eric Francia is no longer just charting a course to build an energy empire; he’s leading a relentless and results-driven team that knows its mission: not just to quench the energy thirst of power markets at home and abroad, but to help pull the planet back from total peril.
And as the energy investment game breaks free from coal’s chokehold, ACEN is out there, boots on the ground, installing ‘clean power flags’ across the Philippines, Australia, India, Vietnam, and every new frontier it’s carving out next.
Scaling the 5GW to 20 GW Investment Journey
ACEN is gunning for 5 gigawatts of renewable energy by 2025 and a massive-scale 20 gigawatts by 2030 – and with that, it now knows how to navigate not just the calm but even rough waters of global markets to concretize those green energy ventures.
“For the 5GW, we already achieved it almost three years ahead of schedule – we achieved it at the end of 2023, beginning of 2024. How we define it is this: our 5GW goal includes projects in operation, under construction, and committed,” Francia qualified.
He narrated that “right now, our operating capacity is about 3.5GW. And this year, we expect Stubbo solar in Australia, that’s 500 megawatts. Then by the end of this year or conservatively the beginning of 2026, we’ll have another 300MW in the Philippines, that’s Palauig solar; then we have the initial phase of the Monsoon wind project in Vietnam – essentially, more than a gigawatt should be operating in the next 12 months, and that will bring us to 4.5GW capacity. So by 2026, that’s when the 5GW will be operating.”
Francia expounded that the impact of these new capacity additions on ACEN’s top and bottom lines will be fully felt in the next three years – by far, that’s the window when shareholders will see exactly how hard their capital is working and what kind of value these projects will be packing for them.
The ACEN chief executive added, “By the end of 2027, we should have all of our roughly 7GW operational already – that’s the outlook based on where we are today, so we should basically enjoy a full year impact of the 7GW by 2028.”
Charging toward the 2030 target of 20GW, ACEN will likewise be zeroing in on new battlegrounds like Indonesia, then it will continually size up green energy auctions (GEAs) at home; while also advancing into new frontiers like floating solar and offshore wind developments.
“In theory, we should be doing around 2GW per year of new projects. We’re going to be participating in several clean energy auction projects slated for this year – we obviously need to win those. And in order to win, we need the right tariff and pathway to transmission. But we’re not just going to put on megawatts for the sake of putting on additional megawatts – it has to make sense,” he stressed.
Francia noted, “Most of these projects that we will be bidding into are already in fairly advanced stages of development – some of it, we’re still finalizing transmission connectivity, but the key variable would be the right tariff, especially in a world where the cost of capital is not as low as before. There has been a tightening of liquidity – not overly – but the equity component is not as fluid as before – the return expectations are materially higher.”
He similarly highlighted that what remains a dilemma for RE investors – especially publicly listed ones – is the disconnect between their share prices, as these are still relatively viewed as ‘tamed’ or trailing far behind the true market value they should be commanding.
“In the stock price of RE companies globally, not only ACEN but globally, it’s been depressed – they’re significantly off recent highs, and that’s a reflection of higher interest rates – despite the fact that solar panel prices and battery storage have been declining. Then when you look at the tariffs, despite tightening supply, they haven’t really increased much – but on the cost of capital, both on debt and equity, the return expectation of investors has gone up because of interest rates and the risk premium that they are appraising,” he explained.
Riding the Wild Currents of RE Investment Markets
To date, most of ACEN’s capital is still flowing straight into its home turf, the Philippines, where the need for new energy capacity is glaring, and the roadmap for a 35% shift to renewable energy by 2030 and 50% by 2040 is a call to action that the government has been spearheading.
Francia admitted, though, that the investment climate in the Philippines isn’t all sunshine and gentle wind breeze. Beyond lingering concerns of grid integration for capacity additions, there’s also that constant worry among investors about whether the tariffs approved by regulators for GEAs will actually be high enough to make their projects viable.
“Our four largest markets today are in this particular order: Philippines and Australia, then India overtook Vietnam. The Philippines is about 40%; Australia is about 20%; India and then Vietnam are 10% each; and then the rest of the world is roughly 10%,” he conveyed.
Francia emphasized, “Whatever happens, the Philippines remains our core. But we’re not going to make do with a couple of gigawatts if most of them will not have a green energy auction or a market or a power purchase agreement. In other words, we are dependent on policy and the market.”
He asserted, “We’re going to participate in green energy auctions, but hopefully, it will be at the right volume in terms of megawatts, and there’s also the right timeline – that it’s not too unrealistic, where you have to develop and reach commercial operations in two years or one year – like for IRESS (integrated renewable energy and energy storage system) because that takes time; we need to build the infrastructure, then transmission connectivity, etc.,” he expounded.
Francia acknowledged that Australia remains a ‘sweet spot’ for Ayala-led ACEN and its partners in that market – given the massive solar projects already in full swing and their latest major win, the 900MW wind park in Coolah, New South Wales, locked in as underpinned by a government-backed investment incentive scheme akin to a power purchase agreement (PPA).
“We’re hoping to win more, we’re hoping to bid more capacity in Australia – but again, it depends on the market and the government’s policy – how much will they bid, what price will they tolerate, etc. Australia needs additional capacities and also energy storage because their coal plants are going to be shut down in the next decade. So, it’s going well – there’s definitely momentum in the Philippines and Australia,” he said.
Shifting focus to India, Francia stated that this offshore market has been “a big surprise for us, because frankly speaking, until a year ago, we hadn’t grown our portfolio in India since 2020 – we waited for 3-4 years” – and when ACEN finally reignited its interest, it landed a 1.2GW hybrid wind and solar project that it is now pursuing in partnership with BrightNight at the Optima Maharashtra site.
He explained that ACEN had been losing bid after bid in India in recent years as competitors were going all-in with their aggressive offers. But when the macro factors – interest rates and other pressures – squashed those reckless bidders, ACEN saw an opening. The company jumped back in, and in the last 12 months, it added enough capacity to make its footprint in India almost rival its holdings in Australia.
The ACEN executive further asserted that the positive flashpoints they’ve been seeing in India are the facts that “their economy is growing strongly, and they have a 500GW target for renewables until 2030. While they’re already behind that target, that presents a very good market opportunity for us.”
For the Vietnamese market, on the other hand, ACEN is seeing fresh interest as the country’s economy surges and its government has been stepping up to address investor concerns – especially around the curtailments that some solar developers have been battling. By far, that market is starting to show it can handle the heat, and ACEN is ready to take another plunge on targeted investments.
“Vietnam is a market where we were quite successful between 2018 and 2021 – we put on a lot of new capacities for solar and wind, working with partners. The issue with Vietnam is that because of their success in deploying a lot of renewables, they had curtailments and they had excess capacity – but because of their growth post-Covid, they’re now back to their double-digit growth in power…so, we’re hopeful that Vietnam is a market that will come back because it has no choice but to address the tightening supply situation,” he pointed out.
Indonesia is also on ACEN’s radar, but it’s still a waiting game because plans for concrete renewable energy projects are not materializing yet, as the country remains hooked on coal as its dominant power supply source.
“Indonesia – it will take quite some time – there’s a bit of an abundance of supply from coal, and I think we’re just keeping our options open in Indonesia,” he said.
Grid Reliability: When Capital Hesitates, Strategy Must Move
Where capital is not smoothly flowing in, the ACEN chief executive reckoned that it’s up to industry policymakers and regulators – specifically the DOE and ERC – to step up with strategies that guarantee investors a fair shot at solid returns. The focus? Making sure installations not only plug the massive capacity gap but also keep the grid stable and reliable.
He opined that for a market like the Philippines – which is facing the dual dilemmas of supply tightness and grid integration insufficiencies – the government-designed clean energy auctions would need to close that ‘viability gap financing’ with smart incentives, not just for pure solar installations, but for the critical energy storage systems that will not only stabilize power supply but also fix some of the grid’s connectivity drawbacks.
Energy storage systems (ESS) are viewed as a game-changer in solving RE grid integration hurdles. Despite solar and wind’s intermittent nature, excess power can be stored and released when generation drops, keeping the flow steady and reliable. And while RE capacity can’t always keep up with grid fluctuations, energy storage can react in milliseconds to stabilize voltage and frequency, preventing massive disruptions – similar to the blackouts in Spain and Portugal that could have been avoided.
Additionally, energy storage doesn’t just store excess power; it absorbs overflow from existing plants and will be ready to inject that capacity into the grid when it’s needed most. With boosted supply secured, the country can put off pricey grid upgrades and delay costly transmission facility expansions.
“The question now is: do we have enough transmission capacity and capability to manage the frequency changes? That’s our number one concern; then on top of that, depending on the size of the plain vanilla solar to be bidded out in GEA 4, isn’t that going to compound the problem? I think we should be concerned; on the other hand, we should also see that as an opportunity,” Francia indicated.
He underscored, “The good news is: we should really encourage policy that will target to accelerate the scaling for energy storage – be it on a stand-alone basis, but strategically located to the source of the issue, which is solar plants; put it near substations where these solar plants connect to; or the demand center.”
Nevertheless, for ESS to attract investors, he stipulated that the ERC must create a solid incentive mechanism that supports investments in storing excess power from existing solar plants. This needs to be a fresh class of incentives – separate from what’s already laid out in the IRESS package – to make the business case truly viable.
“The thesis here is: create a new asset class with a new service; it’s not ancillary service – but basically, you encourage GenCos (generation companies) to invest in stand-alone battery storage – either stand-alone outside of the meter or in an existing solar plant that is not contracted under FIT (feed-in-tariff) behind the meter,” he emphasized.
From a regulatory standpoint, he argued that the ERC must carve out a dedicated GEAR price for energy storage – say, if the levelized cost lands at ₱8 to ₱9 per kilowatt hour, and the arbitrage only yields ₱2.50 to ₱4, then that price difference – the ‘viability gap financing’ – must be covered through a clear incentive like a feed-in tariff or GEAR. Only then will developers have the numbers to justify bidding in and scaling up.
Carbon Currency: De Facto FDIs for the Philippines
Manifestly, ACEN is walking the talk on decarbonization – leading where others still cling to coal – and that’s by pushing for the early shutdown of its 246MW South Luzon Thermal Energy Corp (SLTEC) coal plant by 2030, a pioneering and innovative business move that will be turning prospective stranded assets into climate action – and the future cash flows will be backed by transition credits under Article 6 of the Paris Agreement. For the Ayala firm and all other forward-thinking players in the energy sector, this is not just a business strategy; it’s a global investment playbook in the making.
With the backing of its powerhouse partners – primarily the Monetary Authority of Singapore, the Rockefeller Foundation, GenZero, Keppel, and Mitsubishi’s Diamond Generating Asia – ACEN is tangibly turning carbon-linked finance into a solid form of de facto foreign direct investment (FDI), unlocking real capital for the Philippines by cashing in on emission cuts from its early coal plant retirement.
“If you sell your transition credits to high-integrity markets like Singapore, then they will pay for that – those investments, they would be de facto FDI to the Philippines; that’s the beauty of these transition credits because they could actually be another leg of de facto exports – you can export carbon reduction, so there’s no difference for us exporting BPO services or overseas Filipino workers for remittances; this one could be a significant source of dollar inflows,” he noted.
Beyond capital influx, transition credits come with a clear mandate: reinvest in clean tech, primarily renewables as replacement capacity. In essence, that entails channeling funds into renewable capacity that doesn’t just keep the lights on – it abates global warming threats head-on, a mission that hits especially hard for a climate-vulnerable country like the Philippines.
ACEN’s transition credit-driven shutdown of the SLTEC plant still has boxes to tick – but the company has its eyes fixed forward and firm on pushing this climate mission across the finish line.
With Verra, one of the world’s top carbon certifiers, greenlighting the methodology, ACEN now heads into the next critical phase: filing its project design document (PDD), which will lay bare the comprehensive details of the transition credits play – including its objectives, scope, location, technology, baseline scenario, additionality argument, emission reduction estimations, as well as a monitoring plan.
“The submission will be to Verra as the registry – that needs to be certified by a third party; once we get registered, then we can get off-takers already for the future carbon reduction certificates,” he conveyed.
Next up, ACEN will hammer out its Mitigation Outcome Purchase Agreements (MOPAs) – which will now lock in the buyers of its SLTEC transition credits, whether they’re governments like Singapore, Japan, or New Zealand, as well as corporate giants playing in carbon-taxed compliance markets.
Japan’s looming entry into the compliance market by 2026–2027 somehow makes it a major prospect for ACEN, while America’s big tech firms that are committed to high-quality carbon credits are also regarded as potential buyers.
“Regardless of Trump’s policy, a lot of these US multinationals and big tech companies, they all have their commitments and so forth, so that’s a potential market also. Now what that does is: it generates valuable revenue/cash from the transition credits that will now help support our coal-to-clean transition,” Francia pointed out.
Undoubtedly, whether it’s making strategic steps with investments or spearheading sustainability, ACEN isn’t just flying high – it’s taking calculated strides across the global stage. With the Philippine flag held high in their hands, they’re not just driving transformative capital; they’re sending a clear message that Planet Earth is worth saving, and they’re not just doing it for us, but for the generations to come.
Source: Manila Bulletin
