Proceeds from such energy transition credits can bridge cost gaps, “especially where renewable-plus-storage is more expensive than fossil fuel or coal-based local utility tariffs”, according to a summary published by MAS on Nov 10. These proceeds can even go beyond short-term compensation to support long-term community resilience, such as re-employment, upskilling and business support.
About a third of coal-fired power plants (CFPPs) that are either operational or in development across Asia are eligible to generate “energy transition credits” — a form of “high-integrity” carbon credits.
The Monetary Authority of Singapore (MAS) mooted the “transition credits” concept in 2023 as a “complementary financing instrument” that could incentivise CFPP owners to retire their assets early and replace them with renewable energy.
