A market mechanism for Southeast Asia's energy transition

Shifting
production,
one MWh
at a time.

Southeast Asia's coal plants are locked in by contracts, not by economics. SPARC converts those contracts into transferable streams that renewable generators can fulfill instead, without a single plant closure, billion-dollar buyout, or broken agreement.

Read the Lite Paper How it works

The case for acting now

40%+

Reserve margins in some Southeast Asian countries: grids are already oversupplied with contracted fossil generation

20-25

Years remaining on typical Southeast Asian coal PPAs, locking in dispatch even as renewables become cheaper

1 MWh

The unit SPARC operates at. The smallest increment of verified, contractual change

Working draft SPARC is a concept in active development. This site presents indicative proposals subject to stakeholder engagement and regulatory discussion. Nothing here constitutes a final position or commitment.

The problem

The grid is contractually full.

Long-term power purchase agreements guarantee coal plants the right to supply electricity and be paid for it. Even where renewable energy is cheaper, contracted coal output must still be honored. Adding renewable capacity on top does not displace coal. Sometimes, it just adds cost.

Current coal phase-out models require a full buyout of the PPA: large upfront capital, years of preparation, and concentrated losses on the coal operator's balance sheet. SPARC offers a different path.

25 yr

Average PPA duration Coal PPAs guarantee offtake long after renewables become cheaper. Consumers must cover the obligation either way

3-5 yr

Typical phase-out preparation time Binary retirement deals require complex debt and equity restructuring before a single ton of emissions falls

$0

SPARC buyout capital required No upfront purchase of the PPA. Impact accumulates one verified MWh at a time, funded by the economics of each transaction

How SPARC works

From monolithic contracts
to transferable slices.

SPARC works through SPARC streams. A SPARC stream is a slice of an existing coal PPA which a third party agrees to fulfill. It carries the right to supply power, to receive the associated PPA payment, to emit carbon dioxide, and the corresponding delivery obligations. A SPARC is created when one MWh is delivered and evidenced. Coal load factors decline. Contracts stay intact.

View the full How SPARC Works deck

01

Originate a SPARC Stream

A defined delivery band inside an existing coal PPA is registered as a SPARC stream. The stream carries the relevant rights and obligations, while the underlying PPA remains legally intact. No debt restructuring. No regulatory pandora's box.

Registry issuance via I-TRACK

02

Transfer

The coal operator and a third party agree how to share PPA value, delivery risk and ARC value for the SPARC Stream. The coal operator avoids fuel cost, sheds delivery risk, and retains its margin. The delivery party gains access to guaranteed offtake within an existing contract.

Voluntary bilateral market

03

Deliver and record

The new party provides capacity and delivers energy. Each verified MWh creates a SPARC record. Where verified emissions are below the embedded emission right, the unused portion is issued as an ARC: a record of an unused emission right anchored in delivered displacement.

Verified avoided emissions

Who it's for

Different stakeholders.
One mechanism.

For coal-fired power plant operators

Retain your margin.
Reduce your exposure.

Your PPA guarantees revenue. SPARC lets you keep that guarantee while offloading the cost of generation: fuel, cycling stress, operating expenditure, and delivery risk. A renewable operator takes on the physical obligation. You retain profits and fix costs. Your PPA stays intact. Your assets are untouched.

The financial logic is simple. Where the retained value under the SPARC stream agreement plus avoided operating costs equals or exceeds what you would have earned by generating the MWh yourself, you are economically indifferent or better off. You control the pace. Start small, scale when it makes sense.

PPA stays in force No contract modification. No counterparty replacement. The original agreement remains your legal foundation throughout.
Profit preserved on every MWh Whether you generate the MWh yourself or transfer a SPARC stream, your contracted margin remains with you.
Works for portfolio transition too If you own renewable assets, SPARC lets you move production rights from coal to your own green portfolio, without new auctions or contract awards.
Voluntary and incremental Start with a small tranche. No commitment to full phase-out. Scale as the economics and your strategy dictate.

For renewable energy operators

Contracted revenue.
No auction required.

Market access is the barrier, not economics. In most Southeast Asian grids, long-term coal PPAs occupy the available dispatch capacity. Winning new contracts requires years of auctions and regulatory process.

SPARC is a different route. By acquiring production rights from existing PPA holders, you gain access to guaranteed offtake. The production slot already exists. SPARC streams transfers the right and obligation to deliver it. Revenue comes from two sources: the PPA contract value on verified delivery and a monetizable asset, ARC, for every MWh where your emissions are below the embedded emission rights.

Guaranteed offtake from day one No auction. No multi-year approval process. The contract already exists. You acquire the right to fulfill it.
Dual revenue stream PPA contract value on delivery, plus ARC carbon revenue from the avoided emission right. Two income sources per MWh.
Battery storage extends the fit Solar surplus stored during off-peak periods dispatched into peak windows, matching baseload obligation profiles without curtailment.
Scales with your portfolio Acquire SPARC streams for a portion of your capacity and expand as it grows. No PPA renegotiation needed.

For regulators

Honor contracts.
Lower emissions.

Your grid is contractually full. NDC commitments require measurable emission reductions, but forcing early retirement triggers compensation claims, legal disputes, and energy security concerns.

SPARC resolves this without requiring you to break a single contract. Coal plants remain on the grid. Contracts stay legally intact. Actual generation progressively shifts to lower-cost renewable operators through voluntary market transactions. Dispatch changes. Contracts don't. Because renewable generation is cheaper than the coal variable cost it replaces, consumer tariffs stay flat or fall.

No new legislation to start SPARC can operate under recognized product-code and registry governance. Launch as a regulatory sandbox, then scale.
Regulator stays in control Full sovereign control over eligibility, pace, and scope. No mechanism element overrides your existing mandate or dispatch authority.
Reserve margins hold Coal capacity remains available without producing. Grid reliability is preserved while load factors decline.
Verified NDC contribution Every displaced MWh generates a certificate tied to real, metered avoided emissions that may count toward national climate commitments.

For energy ministries

Decarbonization within
the system you have.

Long-term PPAs fix generation rights for decades. Even where renewable energy is cheaper, contracted coal output must still be honored. SPARC gives ministries a decarbonization tool that operates within the existing contractual architecture rather than against it.

The PPA remains legally intact. Capacity availability remains unchanged. The delivery obligation for a defined stream of MWh shifts to eligible lower-emission generators through direct agreements between parties. Coal operators participate because they retain their profit margin while reducing cost and risk. No upfront government capital required.

Compatible with NDC reporting SPARC is designed for alignment with Paris Agreement carbon accounting frameworks including Article 6 considerations.
No stranded assets, no compensation disputes Because coal plants retain contractual integrity and the mechanism is voluntary, transition proceeds without triggering government liability.
Market-driven, not mandate-driven SPARC puts transition on market terms. The mechanism creates incentives that align operator, RE developer, and regulator interests without coercion.
Sovereign control throughout SPARC can begin in a single market with a handful of assets and expand at whatever pace regulators and the market support.

For philanthropists and impact investors

Carbon receipts,
not promises.

Current transition finance pays for the possibility of coal reduction, often years before any emissions are avoided. Deals take three to five years to structure, require large upfront capital, and deliver carbon credits against modeled projections.

SPARC flips the sequence. ARCs, Avoided Right to emit Carbon, are issued only after a specific lower-emission MWh has been metered under a SPARC stream, and only to the extent that verified emissions fall below the embedded emission right. You are buying evidence of displacement. Not a promise that coal will eventually stop.

Ex-post issuance only No credits issued in advance of impact. ARCs are generated only from verified metered delivery. After the coal displacement has occurred.
No buyout capital needed Impact accumulates incrementally. A philanthropist can support SPARC by purchasing ARCs from early transactions, not by financing the mechanism itself.
Anchored in legal emission rights ARC derives from embedded emission rights set by existing contracts: regulatory grants, not modeled counterfactuals. The impact arises because a permitted emission did not occur.
ARC purchases pull impact forward Carbon revenue is the signal that makes SPARC transactions clear. Buying ARCs accelerates the pace of displacement across the market.

What is an ARC?

Avoided Right
to emit Carbon.

Each SPARC records the coal plant's embedded emission right for that MWh. When an approved delivery party fulfills the SPARC stream and delivers that MWh instead, the emission right goes unused.

The difference between the embedded emission right and the verified emissions of the delivered MWh becomes an ARC, an issued record of the unused emission right. Depending on host-country rules, ARCs may support domestic accounting, ETS integration, cancellation, or authorized international transfer.

ARC calculation

Embedded emission right
(from original coal PPA and operating license)
−
Verified emissions
(metered delivery from renewable generator)
=
ARC (tCO₂ unused emission right)
Issued only if positive. Ex-post only.

No ARC can be created without a SPARC, and no SPARC is created without eligible metered delivery under a SPARC stream.

Common questions

Frequently asked
questions.

A primer for first-time readers. More detailed questions, including deal structure, ARC issuance, and the regulatory pathway, are covered in full on the FAQ page.

See all questions

A SPARC stream is a slice of an existing coal PPA that a third party agrees to fulfill. More formally, it is a defined delivery band inside an existing coal PPA, carrying the right to supply power, to receive the associated payment, and use the embedded emission right, together with the corresponding delivery obligations.

The underlying PPA stays legally intact. No full buyout. No immediate plant closure.

A SPARC is created at delivery. When one eligible MWh is produced under a registered SPARC stream and evidenced through the required metering and attribute systems, a SPARC record is created.

There is no pre-issuance. SPARCs are not free-floating certificates.

No. A coal plant can reduce output through SPARC stream fulfillment while remaining available or partially available. The output reduced under a fulfilled SPARC stream may not be redirected or sold elsewhere by the coal plant; that production band belongs to the stream and is what the substitute generator delivers.

Retirement may follow as a later economic outcome, but it is not a required step in the mechanism. As more SPARC streams are fulfilled, the remaining coal-backed obligation becomes smaller and more concrete, which can make later retirement, full substitution, or PPA renewal on cleaner terms easier to negotiate.

Under the preferred low-friction model, no. The PPA counterparty relationship does not change. The coal operator remains the grid-facing contractual party.

The SPARC stream agreement is designed to sit beneath the existing PPA and avoid full PPA novation where the jurisdiction permits that approach.

An ARC is the unused emission right from a SPARC. It is issued when the verified emissions of the delivered MWh are lower than the embedded emission right carried by that SPARC.

ARCs are receipts, not advance claims.

Where we are

Active development
in two priority markets.

SPARC is a draft concept under structured engagement with operators, regulators, and institutional stakeholders across Southeast Asia. We are not attached to any specific formulation on structure, regulatory pathway, or economic logic. We welcome challenge and practical pushback.

The White Paper, Lite Paper, economics paper, decks, Blog and Notes, and FAQ are available in the resource hub.

SPARC Lite Paper Concise overview of the mechanism and its rationale
→
SPARC White Paper Full technical and regulatory framework, draft for stakeholder consultation
→
Resource hub Papers, decks, Blog and Notes, FAQ, and economics
→

Priority markets

Philippines

Engagement initiated with the Department of Energy. Bilateral discussions underway with ACEN.

Initiated

Thailand

Early dialogue with EGAT and Agora Energiewende. Energy Transition Partnership engaged.

Initiated

Regional capital markets

Outreach to MAS Traction ecosystem, an energy transition working group for regional power sector financing.

Developing

SPARC is a draft concept for structured engagement. All mechanism design, regulatory pathways, and economic parameters are indicative and subject to revision based on stakeholder feedback. Nothing here constitutes a commitment by any party.