Outlook and Strategy
While global energy demand continues to rise, myriad factors challenge thermal energy supply, which the world still depends on. These include virus uncertainty, supply chain disruptions, coal, oil, and gas restrictions, and the Russia-Ukraine conflict. As a result, governments worldwide have seen alternative sources of power, especially renewable, as critical to energy security. As a leading renewable player, ACEN stands to benefit from these trends with its aggressive renewable portfolio expansion toward its vision of becoming the largest listed renewable platform in Southeast Asia.
The Philippine government, through green policies such as the Green Energy Option Program, and Renewable Portfolio Standards, provides fertile ground for the development of renewables in the country. The implementation of GEOP, which allows end-users with an average peak demand of as low as 100 KW to directly source power from GEOP suppliers, will expand the customer base for renewable energy. In addition, RPS, which aims to achieve a 35% renewable share of generation output by 2030, ensures that a bigger portion of the country’s ever-growing demand will be fulfilled by renewables. ACEN is therefore in a unique position to contribute to the nation’s large renewable requirement as a result of RPS.
With favorable demand and renewable growth opportunities across ACEN’s international markets, the company’s offshore energy outlook remains optimistic. Vietnam, Australia, and India have all stated netzero targets, with the first two by 2050 and the third by 2070, thereby necessitating renewable development.
Growing the renewables portfolio to support a low carbon economy by providing clean, affordable, and sustainable energy
Expand in high growth regional markets
Renewable energy expansion in key markets to become the largest listed renewables platform in Southeast Asia
Leverage strategic partnerships to complement internal development capabilities
Working with an established network of partners, strong industry partners, and banking relationships to accelerate growth
Over ₱171 billion in total assets, with market capitalization of ₱421.7 billion
Harnesses solar, wind, and thermal energy for power generation
ACEN’s portfolio of power generating plants has a proforma attributable capacity of ~3,800 MW of which 87% is renewable. Parent AC Energy has ~530 MW of legacy coal assets
Social and Relationship
More than ₱230 million spent on community investments since 2019, reaching more than 100,000 lives
Over 700 employees, with ₱30 million spent on training and development
ACEN continually develops new projects in its pipeline, with ₱145 million spent on development of renewables, and ₱63 million on automation initiatives and IT infrastructure
How We Create Value
ACEN supports the global energy transition by providing clean and sustainable power to the markets where it operates. We aim to have a 100% renewable generation portfolio by 2025, and become the largest listed renewables platform in Southeast Asia.
ACEN serves the power requirements of 310 MW wholesale and 313 MW retail customers in the Philippines, and provides energy solutions that allow customers to offset their carbon footprint while maintaining affordability and reliability. Our international plants also power the requirements of distribution utilities in Vietnam, Indonesia and India.
We have established a strong network of partners that complement our in-house project development team. These development platforms allow us to explore various technologies, pursue new renewable energy projects, and expand our pipeline in scalable markets across the region.
The Value We Create
2021 Financial Performance
Infusion of all-renewable international assets of parent AC Energy into ACEN
ACEN net-zero commitment by 2050
Capital raising activities to fund investments in renewables:
ACEN stock rights offering and follow-on offering
Investment of Singapore sovereign wealth fund, GIC Private Limited, through its affiliate, Arran Investment Pte. Ltd.
Maiden green bond offering of ACEN, through its subsidiary ACEN Finance Limited, raising US$400 million
Divestment of thermal assets:
Signed agreements for the divestment of power barges and AC Energy’s indirect ownership in the 4x135MW coal-fired power project in Kauswagan, Lanao del Norte
Complete the 2 x 20MWh Alaminos battery energy storage system
Pursue an Energy Transition Mechanism for the 244 MW SLTEC coal plant, to enable the early retirement of the plant
Complete thermal asset infusion into ACE Enexor
Expand in high growth regional markets
Started construction of 521 MW of solar capacity in Australia
Commenced operations for 170 MW of solar capacity in India
Received FIT and started operations of 380 MW of wind plants in Vietnam
Philippine renewable projects ramp up:
Started operations for 120 MW Alaminos and 63 MW Palauig solar farms, and the 75 MW Ingrid power plant in Rizal
Started construction on the 160 MW Pagudpud wind farm and the 284 MW San Marcelino solar farm
22% increase in its consolidated net income, reaching P5.3 billion
Revenues increased by 27%, reaching ₱26.1 billion
Attributable output hit 4,633 gigawatt-hours, up 21% resulting from ~700 MW in new operating capacity
23% rise in generation from renewable sources
Inclusion in the PSEi and MSCi
Acquire UPC Australia and UPC Philippines
Construct a new 420 MW Masaya solar plant in India
Continue to search for new markets and new partners
Sign an agreement with Super Energy Corporation Public Company Limited, through its subsidiary, Super Energy Group (Hong Kong) Co., Limited, to form a strategic partnership to develop, own and operate renewable energy projects across ASEAN
Leverage strategic partnerships to complement internal development capabilities
Approved a joint venture with NEFIN Holding Limited to develop, construct, and operate rooftop solar projects across Asia
Approved a joint venture with ib Vogt Singapore Pte Ltd for the development of solar projects in the Philippines with an initial target of 300MWdc of generating capacity
Expanded the UPC Renewables partnership with the start of a new 521MW solar farm in Australia
Started construction of the 72MW Arayat solar farm, a JV with Citicore
Enter into a joint venture with CleanTech Renewable Energy 4 Corp. to develop, own, and operate a 133 MW solar farm and transmission line project located in Lal-lo, Cagayan
Acquire 49% interest in the Vietnam solar platform of Super Energy Corporation
Renewable Energy Portfolio
Against the backdrop of its 5,000 MW target by 2025, ACEN achieved a pro forma attributable capacity of ~3,800 MW in both the Philippines and across the region as of end of March 20221 through several key greenfield projects and strategic acquisitions. Close to 90 percent of the company’s portfolio is in renewables, among the highest in ASEAN.
In the Philippines, ACEN currently has ~1,500 MW of pro forma attributable capacity as of March 2022. Over two-thirds of this or ~1,000 MW is in renewables, mostly in solar and wind technologies, as well as some battery storage and geothermal assets. Close to 70 percent of the portfolio is already operational, with only ~30 percent under construction. In addition, ACEN is currently building ~484 MW of new wind and solar capacity, alongside a significant ~6,500 MW pipeline.
Vietnam is ACEN’s largest market outside the Philippines accounting for 46 percent of ACEN’s international portfolio as of March 2022. In November 2021, ACEN successfully secured the FIT for ~380 MW of wind power projects in Vietnam, augmenting ~270 MW of existing operating attributable solar capacity in the country. Recently, the company also announced the acquisition of a 49 percent stake in Solar NT, a subsidiary of SUPER Energy, with 837 MW of operating solar plants in Vietnam. The acquisition is subject to satisfaction of agreed conditions precedent.
Australia is ACEN’s second largest offshore market. In 2021, the Ayala energy platform broke ground on its first project on the continent: the 521 MW first phase of the 720 MW New England Solar Farm in Uralla, New South Wales, through joint venture company UPC\AC Renewables Australia. The announced acquisition of UPC-AU will give ACEN access to ~8,100 MW in pipeline projects and will allow ACEN to independently develop power projects outside the Philippines for the first time.
India accounts for over ~500 MW of ACEN’s pro forma attributable portfolio as of March 2022. In 2021, the company commenced operations of two new plants in the country: the 140-MW Sitara Solar farm in Rajasthan, its first project in India, and the 70-MW Paryapt Solar in Gujarat. A third project, the 420-MW Masaya Solar Farm in Madhya Pradesh, ACEN’s largest in the country, began construction in 2022.
Indonesia is ACEN’s first market outside the Philippines, beginning with the acquisition of a stake in Salak and Darajat Geothermal in 2017 and the development of Sidrap Wind in 2018. Today, the company’s attributable capacity in the archipelago is at ~200 MW.
1This includes 154 MW from the recently announced acquisitions of UPC-AC Australia and UPC Philippines, approved by the Board on 18 Oct 2021, as well as a 50% stake in SUPER Energy PCL’s Vietnam platform in 2022, subject to regulatory and shareholder approvals.
In 2021, ACEN raised close to US$1 billion in fresh capital to fund its renewable energy expansion. ACEN was able to raise P28 billion from a stock rights offering in January, a private placement by Arran Investment, an affiliate of Singapore’s GIC Private Limited, announced that same month, and a follow-on offering in May. Both ACEN’s SRO and FOO were oversubscribed, reflecting strong investor confidence in the company. Finally, in September, ACEN, through wholly owned subsidiary ACEN Finance Limited, raised its maiden perpetual Green Bond worth US$400 million, at a low 4 percent coupon rate, fixed-for-life.
Sustainability at ACEN
ACEN’s commitment to ESG principles drives the company’s operations. It has an E&S Policy, which aligns the business with the UN Framework on Climate Change and the Paris Agreement, as well as the UN Sustainable Development Goals.
In October 2021, ACEN committed to reach net-zero greenhouse gas emissions by 2050 or earlier. The company is also working to transition ACEN’s generation portfolio to 100 percent renewables by 2025 across both Philippine and International platforms. To achieve this, ACEN intends to spin-off or divest all thermal capacity by 2025. In addition, the company is working towards the early retirement and just transition of its sole coal facility by 2040, fifteen years earlier than the end of its technical life.
To achieve excellence in environmental management, ACEN continues to operate the Conservation Estate in Ilocos Norte, a 700 hectare forest protection program established in 2014. As of last year, ACEN has planted over 520,000 trees in the area, with the goal of planting one million by 2025. In addition, through an agro-forestry program designed by experts from U.P. Los Baños, and with various training workshops to build their skills, local residents learn sustainable farming techniques.
The Sustainability Hub in Alaminos, Laguna is another key environmental management project by ACEN. It contains the 120 MW Alaminos Solar farm, which also includes a 40 MW battery energy storage system, our first foray into battery storage solutions. The power facility is surrounded by the Ayala Land Carbon Forest, a tree nursery, a future eco-learning camp, and a plastic waste recycling facility that turns garbage into eco-bricks. The solar farm is the first solar storage hybrid in the Philippines, avoiding close to 150,000 tons of carbon dioxide.