GEOTHERMAL

Geothermal energy is at the pinnacle of renewable energy because of its reliability, efficiency, and overall sustainability. Especially in the Philippines, which has an abundance of geothermal reserves, clean power from geothermal power can be harnessed to fuel widespread development and national progress.

The geothermal platform of First Gen is operated through its subsidiary EDC, which is the largest integrated geothermal enterprise in the world. Moreover, EDC’s geothermal platform is the only major source of 24/7 renewable energy among all renewable energy technologies in the country. To date, 61.6 percent of the Philippines’ total installed geothermal capacity is provided by EDC through 12 geothermal power plants that are located within the 140-MW Bacon-Manito (BacMan) Geothermal Project; the 711.4-MW Leyte Geothermal Project; the 221.9-MW Southern Negros Geothermal Project; and the 106.0-MW Mindanao Geothermal Project. As of December 2017, First Gen has a 41.6 percent economic interest in EDC.

Revenue contribution of geothermal assets underperformed this year, driven in part by two major calamities that hit the Leyte island. EDC’s LGBU, the largest in terms of installed capacity and historical revenue contribution, was on track for record figures in 2017 until it got struck by a 6.5 magnitude earthquake in July and a strong typhoon in mid-December. As a direct consequence, LGBU revenues fell by PHP 0.8 billion compared to the previous year. This was partially offset by BGBU as it delivered an additional PHP 0.9 billion in revenues on account of higher contracted capacity.

 

 

EDC provides 61.6% of the total installed geothermal capacity of the Philippines.


For 2017, EDC continued with its efforts to further reduce its exposure to the spot market, and to increase the reliability of its power plants.

BGBU ended the year fully contracted, from only 119.8 MW in 2016. Its Retail Electricity Supplier License was also approved by the ERC in February 2017, allowing BacMan to directly tap the Contestable Customer market.

Negros Island Business Unit (NIGBU) also contracted an additional 60 MW of its capacity in 2017.

LGBU completed the retrofit activities of all of its Tongonan units, while at the same time replacing some of the key components of its other aging power plants. Mindanao Geothermal Business Unit (MGBU) had also implemented some preventive maintenance and other activities in Units 1 and 2 to help reduce its unplanned outage factor to below 5.0 percent.

Risk Mitigation Programs

Given the inevitable occurrence of natural calamities and the increased possibility of strong typhoons due to global warming, retrofitting measures, disaster preparedness, and risk mitigation strategies are high on the list for ensuring the sustained operations of the geothermal power plants.

On July 6, 2017, a magnitude 6.5 earthquake struck the island of Leyte, resulting in major damages to its facilities. At the time of the earthquake, EDC was operating approximately 540 MW as two of its units were then undergoing retrofitting and preventive maintenance activities. Within 10 days, LGBU brought back almost 40 percent of its power back to the grid to deliver much-needed electricity to the Visayas region.

Moreover, the retrofitting of all three units of the Tongonan Geothermal Power Plant was successfully completed towards the third quarter of 2017, increasing the plant’s installed capacity by 9.3 percent to 41 MW per unit from 37.5 MW each pre-retrofit.

On December 16 and 17, 2017, Typhoon Urduja (international name: Kai-tak) hit Leyte and brought 15 days’ worth of rainfall over a 24-hour period. Strengthened by previous typhoon-proofing initiatives, the LGBU power plants escaped major damage; however, a number of landslides impaired some of the pipelines. By end-March 2018, the Leyte Business Unit was able to restore more than half of its net capacity, with repair works ongoing to bring it back to full load.

2017 was also the year that landslide mitigation measures for BacMan were completed, fortifying road access and pipeline protection for the plant. In addition to that development, BGBU concluded Phase 1 of its Streamlined Reliability Centered Maintenance (SRCM) Project, which is aimed at shifting the implementation of maintenance activities from time-based useful life to maintenance-based. Recommendations from the study are currently being assessed for integration to the maintenance programs on site.

Besides safeguarding its facilities, both First Gen and EDC are also committed to the safety of the workforce. NIGBU achieved more than 16 million Man Hours without Loss Time Incident from 2013 to 2017, while BGBU reached a milestone in 2017 with a total of 6.6 million Man Hours without Lost Time Incident since 2010. BGBU achieved a Total Recordable Incident Rate (TRIR) of 0.0913, which is below EDC’s TRIR limit of 0.1, underscoring the outstanding performance of the business unit with regard to health and safety.

“Within 10 days, LGBU brought back almost 40 percent of its power back to the grid to deliver much-needed electricity to the Visayas region.”

International Standards Met

For 2017, NIGBU transitioned to the 2015 version of the ISO 14001 Environmental Management System (EMS). Certifying body TÜV Rheinland found Zero Non Conformity during the Certification Audit conducted in July. MAGBU was also declared compliant and maintained its ISO 14001: 2004 EMS certification during the same year.

Awards Received

DOE recognized the safety performance of two of EDC’s geothermal business units. LGBU was awarded for its successful completion of the Tongonan Control Systems Integration and Rehabilitation Program without any Lost Time Incident. NIGBU, on the other hand, received a Safety Hall of Fame Award from the Safety and Health Association of the Philippine Energy Sector (SHAPES) of the DOE in December 2017, for its excellence in safety for the past three consecutive years.

For its invaluable contribution to shaping climate-resilient communities and conserving and enhancing the existing biodiversity in its geothermal reservation, BGBU was awarded the 2017 Saringaya Award from the Department of Environment and Natural Resources. Furthermore, BGBU received multiple recognitions from its external partners — the most recent of which was the Hall of Fame for Corporate Safety and Health Excellence award during the 13th Energy Safety and Health Conference and 2017 National Energy Consciousness Month Celebration. BGBU was lauded for attaining Zero Lost Time Accident for the third consecutive year.

Environmental Concern

Along with NIGBU’s efforts to improve its operations, it has unceasingly invested in one of the biggest greening activities conducted in Negros Oriental. Efforts to reforest the island of Negros resulted in an overwhelming 4.1 million seedlings planted since the launch of the “10M Trees in 10 Years for a Greener Negros Movement (10M in 10)” in October 2015. The number of seedlings exceeded targets by 203 percent. The seedlings were planted in over 40 cities and municipalities in Negros Island, with the aid of partner organizations. There was a notable increase in support for the cause—from 65 organizations in 2015, which grew to 141 organizations
in 2017.

Future Developments

In September 2017, First Gen welcomed new partners into EDC with the entry of a consortium led by MIRA and Arran, an affiliate of GIC Pte. Ltd. of Singapore, through a Tender Offer for shares representing 31.7 percent of EDC’s outstanding voting shares. MIRA and Arran are investors who are focused on making long-term infrastructure investments in Asia, with considerable experience in renewable energy, owning and operating a combined installed capacity of over 11 GW globally. The partnership affirms EDC’s value and foretells the increasing importance of renewable energy to the country.

Beyond Philippine shores, EDC is also continuing to develop its prospects in Indonesia, Chile, and Peru. With the progressive shift toward renewable energy around the world, geothermal will undoubtedly increase its contribution to the energy mix, given its reliability and baseload capacity compared to other renewable sources
of energy.