4 THINGS TO KNOW ABOUT YOUR PARTNER, EDC
- We continue to make wise decisions that allow us to improve our operations and grow our business.
The Energy Development Corporation (EDC) has recorded steady and reliable income for the past three years, despite challenges.
2. Our commitment to sustainability is also a commitment to share value.
We continue to make innovations to enhance our sustainability performance. In 2019, EDC, together with all subsidiaries of First Philippine Holdings Corporation (FPHC), strengthened its commitment to forging collaborative pathways for a decarbonized and regenerative future. We choose this path because we believe it is the only way to create lasting value for all our stakeholders, and it is inseparable from the Lopez Values that have, and always will, define us.
As part of this commitment, we have also transitioned to Integrated Reporting (IR) to allow us to better communicate how we use our resources in order to create and share value with all our stakeholders.
Sustainability is in our DNA: we are now on our 10th year of sustainability reporting.
Shared value through integrated thinking:
Integrated reporting illustrates how we create and share value.
3. EDC is prepared for a future with greater risk.
We have stepped up our efforts to build resilience into our business. We continue to make our assets more resilient and our operations more efficient, and thereby more competitive, so that we are better able to produce clean, reliable, renewable energy–particularly geothermal energy.
Investing in Resilience
EDC’s operations rely heavily on harnessing energy from natural resources such as geothermal wells, water, wind, and sunlight. While this allows for cleaner energy production, this also makes our operations vulnerable to certain natural phenomena, such as geohazards and climate change. As such, part of our risk management strategy is to embed resiliency into our assets.
Our geothermal steam fields and power plants currently enjoy high reliability and availability. While we have made significant gains, we also recognize that we can continue to improve on our performance and strengthen our focus on equipment reliability and resilience to climate change and geohazards.
In 2019, our Leyte and Mt. Apo geothermal projects experienced steam shortfall due to well failures. A geothermal well collapsed in Leyte, which hampered its steam production, while an earthquake affected the reinjection capacity of Mt. Apo.
The steam issues experienced were concentrated in Mahanagdong, primarily due to the highly acidic nature of its resource. The loss of 17.87 MW from two problematic wells in Mahanagdong challenged power generation output. Total generation shortfall in Leyte for the first quarter of 2019 was at 76 GWh, equivalent to around PhP360 million in revenues. As such, the well issues in Mahanagdong reduced full-year generation outlook by 309 GWh.
EDC treats well issues as high risk , and our teams work hard to recover existing wells and prevent future losses. These efforts include well workovers and the drilling of new wells. To better anticipate, mitigate, and address well failures, we also strengthened the Asset Management Plan (AMP) of our geothermal wells.
Workovers were completed for the two problematic wells in Mahanagdong. Moving forward, we will use corrosion-resistant alloys (CRA) for the production section of our Mahanagdong wells. Downhole and surface facilities will also be reinforced with cost-efficient and corrosion-resistant materials.
For 2020, EDC has earmarked PhP700 million to enhance resiliency and future-proof its assets. While we have yet to realize our vision to have the country be sustainably powered by renewable sources of energy, EDC will continue to provide clean energy and contribute to energy security. With our good track record of plant availability and reliability, we can provide the needed regulating reserve capacity to the national grid.
In 2019, EDC reported a record-high performance attributed to higher revenue and lower net financial expenses, bolstered by the excellent performance of its individual business units, particularly the higher generated volume of its geothermal power plants.
4. The future is bright.
The outlook for clean energy is positive and demand is growing. Many companies are now mandating the purchase of green energy in their procurement practices.
We are confident that our business will continue to grow, especially as more people understand the importance of making better and cleaner energy choices.
The increasing number of companies making the switch to renewable energy is proof that, not only is it the smart choice for the climate and the environment, it is also a wise business investment. In 2019, EDC had a total of 92 customers, 57 of which are contestable customers, a 29.8% increase from 2018.
As the leading renewable energy provider in the Philippines, EDC is in a position to help companies make the transition to clean and renewable energy. Beyond being a service provider, we also enable our clients and customers to make changes that will benefit not only their business operations, but also the environment.
“It’s good to know that we can contribute to carbon reduction at zero cost,” says Oddy Velarde, Automation Executive at Coca-Cola Beverages Philippines, Inc., whose bottling facilities in Ilocos, Pangasinan, Pampanga, Bulacan, and Cebu now run on clean energy sources.
Given EDC’s leadership and longevity in the industry, it has the capability to support companies as they develop smart energy strategies. This greatly reduces the negative environmental impacts of their industrial or commercial operations, without sacrificing efficiency and productivity.
“EDC continues to give us learnings to reinforce our sustainability roadmap, and to place more focus on the aspect of our carbon footprint,” says Joseph Emmanuel Liwag, Vice President and Managing Director of Knowles Electronics Corporation, also an active partner of EDC’s BINHI Green Legacy Program in Cebu City.
The nationwide greening program promotes the reforestation of denuded areas and the propagation of threatened native tree species, both of which help sequester and absorb more carbon from the atmosphere.
These new and renewed partnerships validate that more companies are making the switch to renewable energy as a smart energy solution that strengthens business operations without sacrificing the welfare of the environment.
Our 2019 Integrated Report
Our Integrated Report tells the story of our efforts to achieve our business objectives, hand-in-hand with our sustainability aspirations.