AC Energy goes all in on renewable energy

AC En­ergy is a fast-ex­pand­ing cor­po­ra­tion on a sin­gu­lar mis­sion: to be­come the largest pub­licly listed re­new­ables plat­form, not just in the Philip­pines but in the whole of South­east Asia.

It may seem a far too lofty goal, but not for the 10-yearold en­ergy arm of the Ayala group of com­pa­nies, which is well on its way to meet­ing the am­bi­tious ob­jec­tive of hav­ing 5,000 MW of re­new­able ca­pac­i­ties in place by 2025, fu­eled by the re­gion’s con­tin­u­ously grow­ing de­mand for clean en­ergy.

“AC En­ergy man­aged to aug­ment its gen­er­a­tion port­fo­lio sub­stan­tially ev­ery year since it be­gan in 2011. The com­pany rec­og­nizes the need for a sus­tain­able en­ergy fu­ture and is ag­gres­sively ex­pand­ing its re­new­ables pres­ence across the coun­try and the re­gion to lead the re­new­ables rev­o­lu­tion in Asia Pa­cific,” said AC En­ergy Pres­i­dent & CEO Eric Fran­cia. In­deed, AC En­ergy has been ex­panding its reach and scope at break­neck speed.

From 2011 to 2016 alone, AC En­ergy that started with a team of five peo­ple with no prior ex­pe­ri­ence in the power sec­tor, went from zero MW of in­stalled ca­pac­ity un­der its belt to 1,000 MW, sig­nal­ing to the mar­ket that it was go­ing to be a se­ri­ous con­tender in the en­ergy space.

“These foun­da­tional years suc­cess­fully es­tab­lished the plat­form, got us to an ad­e­quate scale and prof­itabil­ity,” Fran­cia said.

“AC En­ergy’s key strat­egy was hinged on part­ner­ships – we worked with de­vel­op­ers and in­dus­try part­ners who al­ready had the projects, and com­ple­mented this with Ayala’s bal­ance sheet, brand and rep­u­ta­tion, and man­age­ment ex­per­tise,” he added.

Then from 2016 to 2019, with more ex­pe­ri­ence and proof that it was on the right track, AC En­ergy piv­oted out­side of the Philip­pines and into the re­gion, in­vest­ing in re­new­able en­ergy projects to take ad­van­tage of the de­clin­ing cost of de­ploy­ment, in­crease in ef­fi­cien­cies and the nar­row­ing cost gap with the tra­di­tional fos­sil fuel-based power plants.

This al­lowed AC En­ergy to make the de­ci­sion to di­vest its coal plants – which ac­counted for 90 per­cent of its busi­ness – and use the pro­ceeds to sup­port its rapid ex­pan­sion into the re­new­able en­ergy space.

“Given the com­bi­na­tion of an ex­panded mar­ket across mul­ti­ple ge­ogra­phies and the per­spec­tive that re­new­able en­ergy is the way of the fu­ture, we made the strate­gic pivot to go re­gional and fo­cus on scal­ing up our re­new­able in­vest­ments,” Fran­cia said.

The fur­ther trans­for­ma­tion of AC En­ergy be­gan in 2019, when it re­struc­tured its op­er­a­tions to pre­pare it for the next stage of growth. Since then it has ac­quired listed com­pany Phinma En­ergy and the de­ci­sion was made to trans­form this into AC En­ergy Cor­po­ra­tion – or com­monly known as its ticker sym­bol ACEN – and be­come the Ayala group’s main plat­form for its en­ergy busi­ness.

This year, AC En­ergy com­pleted the in­fu­sion of its in­ter­na­tional as­sets, which will bring it nearly half­way to its goal of reach­ing 5,000 MW of re­new­ables ca­pac­ity by 2025, mak­ing it the largest listed re­new­ables plat­form in South­east Asia.

Al­ready, it has 2,600 MW of at­trib­ut­able ca­pac­ity in the Philip­pines, Viet­nam, In­done­sia, In­dia and Aus­tralia. The com­pany’s re­new­able share of ca­pac­ity is al­ready at 80 per­cent, among the high­est in the re­gion.

It did not even let the dev­as­tat­ing COVID-19 pan­demic slow it down as it is bent on play­ing a lead­ing role in the coun­try’s and the re­gion’s green-led re­cov­ery. In the process, it cre­ated over 7,000 new jobs here and abroad. These in­clude per­ma­nent em­ploy­ees, in­di­rect hires and project con­struc­tion job tak­ers.

In 2021, it be­gan op­er­a­tions of the two new so­lar plants, the 120 MW Gi­ga­Sol Alaminos and 63 MW Gi­ga­Sol Palauig; broke ground on the 72 MW Arayat-Mex­ico so­lar farm and is gear­ing up to de­velop the coun­try’s largest wind farm, the 160 MW Gi­gaWind Pagud­pud.

AC En­ergy be­lieves that the en­ergy tran­si­tion fol­lows a long-term strat­egy in which re­new­able en­ergy plays a key role, sup­ported by tran­si­tion fu­els har­nessed from in­dige­nous sources.

“The en­ergy tran­si­tion is upon us, with re­new­ables play­ing a lead­ing role. That said, to ad­dress its in­ter­mit­tent na­ture, re­new­ables needs to be com­ple­mented by en­abling tech­nolo­gies such as quick re­sponse gas plants in the near term, and en­ergy stor­age in the medium to long term. The tran­si­tion will not hap­pen overnight, and we can­not sim­ply switch off all the car­bon-emit­ting power plants. An orderly tran­si­tion re­quires a long-term road map, but we have al­ready started this im­por­tant jour­ney to­wards a car­bon-free world,” Fran­cia said.

 

This story was first published in the August 27, 2021 issue of the Philippine Daily Inquirer’s Road to Clean Energy special report.