2016 ANNUAL REPORT

Filipinos have pinpointed health as their topmost concern in a recent Pulse Asia survey, but few are aware that the exhaust emissions and particulates from coal-burning in power plants cause cardiopulmonary diseases and nervous system maladies—anything from asthma to lung cancer to heart failure and stroke. The government ends up providing subsidies to coal players by footing the bill for much of these hidden costs as part of their public health bill. It is a tragedy, especially when there is a choice that all of us can make to shift towards clean, low carbon and renewable sources of electricity that are affordable at the same time.
There comes a point where we must take a stand. While many players in the energy industry, driven by what is perceived to be low-priced coal, continue to build coalfired power plants at a rapid rate, the Lopez Group has fully committed to go ”beyond coal.” Our Chairman Federico R. Lopez, in last year’s Annual Shareholders’ Meeting, unequivocally stated that FPH and its roster of subsidiaries, most especially First Gen, will not build, develop, or invest in any coal-fired power plant. We want to do well and run a profitable business, but we will do it the right way, where we serve the growing electricity needs of our developing country without compromising our environment and the health of our people.
First Gen currently produces approximately 21.4 percent of the Philippines’ national electricity output, which means we power one out of five light bulbs in the country. Yet the awesome fact about this is that the carbon intensity of our portfolio is the lowest among the largest power players in the country today!
We pioneered clean, low-carbon, natural gas generation in the country and will continue to pursue the expansion of our natural gas platform to displace the emissions of dirtier producers, like coal plants, and cement our position as the largest natural gas-fired power producer in the country. Complementing our natural gas portfolio is our renewable energy portfolio. To date, we own 50.6 percent of Energy Development Corporation (EDC), the largest renewable energy (RE) company in the Philippines with geothermal, wind, hydro, and solar assets. Moving forward, we will continue to grow our renewable energy portfolio especially as the cost of producing electricity from these sources becomes more and more cost competitive versus dirtier fossil fuel alternatives.