A currently fossil fuel heavy ACEN touted as an ESG play

AC Energy Philippines (ACEN) has been recently touted as an Environmental, Social, and Governance (ESG) play due to its investments in renewable energy.  ESG investing uses a set of standards for a company’s operation that socially conscious investors use to screen potential investment.  The promotion of ACEN as an ESG investment had retail traders crowding on ACEN.

But a closer look at ACEN will show that its main power plant right now is 2 x 122 MW Circulating Fluidized Bed coal plant with Dongfang boilers and Harbin turbines and generators located in Calaca, Batangas.  The coal baseload plant is supplemented by six peaking plants using diesel as fuels with a total dependable capacity of 244 MW.  Fossil fuel plants therefore total to a capacity of 488 MW.

In fact, one of ACEN’s peaking plants, Power Barge 102 (PB102) had an unfortunate accident last July 3, 2020 leading to an oil spill off Ilo-Ilo City and Guimaras affecting coastal communities and mangroves in the area.

ACEN’s present renewable energy capacity totals to only around 350 MW (including capacity of Maibarara Geothermal’s 20 MW). ACEN has solar plants under construction that can provide additional capacity of 330 MW. While ACEN is developing solar plants, it is also boosting its fossil fuel plant with a 150 MW peaking diesel plant.  The allure of fossil fuel plant profits is very hard to shake after all.

Despite the aggressive promotion of ACEN as an ESG investment, only 0.48% of ACEN is held by institutional shareholders. Notable among the institutional shareholders is ATR Asset Management, Inc. (ATRAM). ATRAM was/is holding around 6.53 million shares or .05% of ACEN. An ATRAM fund manager is among the staunch promoters of ACEN as an ESG play.

ACEN is an ESG play if it divests all its fossil fuel plants especially its coal plant.

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Disclaimer and Disclosure: This analysis is an independent viewpoint on publicly traded stocks in the Philippine market.  Accuretti Systems Inc. trades stocks in the Philippine market.

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