2016 ANNUAL REPORT
This is where our natural gas platform has a distinct advantage, it is capable of flexible operation, rapid starts-stops, and has less than half to a third of the CO², NOx, and SOx emissions of even the best coal-fired plants. As indigenous gas sources taper down in the next 7 to 10 years, we are preparing to develop the country’s capability to import Liquefied Natural Gas (LNG) through a regasification terminal in the heart of the First Gen Clean Energy Complex in Batangas City. This component is essential as we believe natural gas plants will play a key role in keeping the lights on in the transition to a clean, decarbonized energy paradigm.
Ironically, the Philippine electricity industry is a product of the 20th century and the default is to continue to do more of the same. But under the existing paradigm, many of our countrymen are still left out. There are an estimated 11 million Filipinos still without electricity, while many more suffer from unreliable and poor quality supply. The disparity only widens the gap between the haves and the have-nots, and the extremes caused by climate change and global warming will only make this gap worse. Paradoxically, however, we have the opportunity to build a power industry that leapfrogs into the 21st century and that shouldn’t leave anyone behind.
Our geothermal platform is essential to a decarbonizing world that’s emerging. Today, it’s the only RE technology capable of 24/7 baseload power at prices that already compete head-to-head with fossil fuels. We will continue to drive our costs down as we expect even more intense competition amongst various fuels and technologies in the years to come. Our solar and wind projects, on the other hand, have been beneficiaries of the Feed-in Tariff (FiT) regimes but we know these are just transitory mechanisms meant to encourage early entry of renewables into the grid mix. We are preparing, however, to deploy these technologies in the competitive arena where they stand on their own merits, without subsidies or FiTs. That day is coming soon.
The electricity industry today is changing very rapidly. The forces at work are moving faster than many of us imagined just 10 years ago. It’s exhilarating, to say the least, but we must make our strategic choices judiciously, as well as boldly.
FEDERICO R. LOPEZ
Chairman and Chief Executive Officer
First Gen Corporation