2016 ANNUAL REPORT

NEW DEVELOPMENTS

Additional power for the grid

The year 2016 saw the completion of two (2) new, technologically-advanced power plants for the Company: the 414-MW San Gabriel and 97-MW Avion, which added 511 MW of new gas capacity to First Gen’s natural gas portfolio. Both power plants held their inauguration on November 11, 2016, which was attended by Energy Secretary Alfonso Cusi and Senator Sherwin Gatchalian, head of the Senate Commission on Energy, and key partners and stakeholders of First Gen. The event highlighted the significant impact of Avion and San Gabriel to consumers’ energy needs, as both plants were built to serve the unique demand requirements of the grid.
Avion had a rocky start earlier in the year, facing challenges such as the termination and replacement of its turnkey engineering, procurement, and construction contracts with the Istroenergo Group (IEG), and its Philippine branch company Energy Project Completion Ltd. (EPC). However, PMPC was able to step in and complete Avion, achieving commercial operations on natural gas on September 26, 2016, while the plant achieved commercial operations on liquid fuel in January 2017. As of the start of 2017, the plant is able to run on both natural gas and liquid fuel.
Avion is a valuable asset for grid security. It is the first land-based power plant in the Philippines to utilize aero-derivative technology, which enables the plant to start and stop multiple times a day, and quickly provide power when needed. This capability makes Avion ideal for catering to the country’s peaking requirement.
Meanwhile, San Gabriel was able to complete its commissioning phase and achieve commercial operations on November 7, 2016. Branded a “Flex- Plant” due to its utilization of the most advanced Siemens H-class technology, it is currently the most efficient plant in Southeast Asia, with efficiency of almost 60.0 percent. This makes it perfectly suited to serve the country’s mid-merit demands and a superb complement to intermittent renewable energy. San Gabriel currently sells its output to the Wholesale Electricity Spot Market (WESM), with the intention of contracting approximately 200 MW of the plant’s capacity in the near future.
To further add to its baseline capacity, First Gen is likewise evaluating the construction of two (2) 450-MW mid-merit combined cycle natural gas-fired power plants, namely Santa Maria and Saint Joseph. The construction and operation of these new facilities will benefit from synergies throughout the gas projects, such as efficiencies from the shared fuel delivery and fuel storage facilities. The use of similar generating technology will also allow the company to take advantage of the operational expertise of its personnel. The commissioning of the plants will be planned in coordination with the progress of the development of the LNG terminal.