Projects Through the
Coal Asset Transition
Accelerator (CATA)
Projects Through the
Coal Asset Transition
Accelerator (CATA)
Share
Background of the Project
The Coal Asset Transition Accelerator (CATA) supports coal fired power plant (CFPP) owners to develop practical financial mechanisms to accelerate the coal transition. CATA aims to reduce CO2 emissions by supporting the design and deployment of Coal Transition Mechanisms (CTMs) that enable affordable and equitable retirement of coal assets, while accelerating the deployment of replacement renewable energy
To date, CATA has been incubated by Pooled Fund on International Energy (PIE) hosted by European Climate Foundation (ECF) and funded by Growald Climate Fund and IKEA Foundation.
Climate Smart Ventures (CSV), a core member of CATA, alongside Carbon Trust and RMI, contributes technical advisory and financial structuring expertise to develop coal transition pathways and pilot projects in emerging markets.
It supports in the following areas:
- Transaction technical assistance (TA) partner engagement and selection: Managing the process of identifying and engaging transaction-level pilot as well as a global network of transaction advisory consultancies that could be engaged in delivering TA to stakeholders through CATA.
- Capability and tool development: Further developing a suite of tools that are at the cutting edge of advancing coal retirement and can be deployed to support TA requests.
- Delivering TA to public and private stakeholders (e.g. governments, utilities, FIs) in priority geographies utilizing CATA’s network of global and local delivery partners. Each core organisation’s role will depend on the scope and geography of each TA project.
In these projects, CSV has also collaborated with Green Finance & Development Center (GFDC), Climate Action Teams (CAT), Reviva Transition Partners (formerly Coal to Clean Stewardship Fund), and Dictuc on multiple research initiatives aimed at accelerating coal retirements in Pakistan, Vietnam, and Chile.
Sample Projects through CATA
Catalysing China’s Coal Exit in Pakistan and Vietnam
CSV conducted a study on potential pathways for a China-led early CFPP retirement in Pakistan and Vietnam using financial mechanisms available to the Chinese government and its state-owned enterprises. CSV participated in the following activities:
- Due diligence and plant-by-plant analysis: Assessed which CFPPs are best suited for early retirement as well as the respective country policies for CFPP operations.
- Financial and scenario analysis: Assessed each CFPP using Net Present Value (NPV) and Enterprise Value (EV) under three financing structures: Business-as-Usual (BAU), Asset Refinancing, and Renewable Energy (RE) Bundling. These approaches were evaluated against three global economic scenarios.
Developing Pathways for Accelerating the Transition of select CFPPs in Chile
CSV with project partners developed a financial methodology to compare the value of early coal retirement against continued operation under a BAU scenario.
Creating a Just Energy Transition (JET) Roadmap for ACEN
CSV is currently developing a just energy transition roadmap for ACEN’s 246 MW South Luzon Thermal Energy Corporation (SLTEC) coal-fired power plant. This builds on momentum generated by ACEN’s Energy Transition Mechanism (ETM), the world’s first and only market-based transaction to successfully program the early retirement of a coal-fired power plant. The six priority areas for the implementation of its JET are:
- Clean energy replacement
- Power plant decommissioning
- Asset repurposing
- Community transition
- Worker reskilling and redeployment;
- Cascading learnings and continuous improvement.
Outcomes
- CSV contributed to expanding CATA to be a more finance-focused platform with ready, set, technical and financial advisory frameworks for ease of execution of coal transition mechanisms when ready.
- CSV delivered technical assistance to pilot projects and first movers in private sector-led decarbonization initiatives in Southeast Asia.
- The findings of CSV’s coal retirement research informed ongoing discussions with policymakers and industry players in Pakistan and Vietnam. The study also provides a replicable framework for China-led coal phase-out strategies in countries under the Belt and Road Initiative (BRI).
- The Chile project successfully secured support from key stakeholders and laid out the groundwork for pilot initiatives.