2016 ANNUAL REPORT

GEOTHERMAL

We have made good progress on our rehabilitation of EDC’s typhoon-damaged geothermal power plants, as well as the retrofitting of plants that are more than three decades old. Our efforts to improve output, efficiency and reliability include, among others, replacing and/or upgrading some turbine rotors and cooling towers. Multiple sites are still undergoing typhoon-proofing, which are targeted for completion by 2017. Minimal operational interruptions were incurred during our continuing maintenance activities, which are commonly done during off-peak hours.
Higher sales volumes resulted in modest increases in revenues for the Palinpinon and Mindanao geothermal sites. The latter, in fact, achieved its highest generation in five years. This offset the opportunity cost resulting in lower revenues from Unified Leyte and Tongonan amidst the ongoing asset rehabilitation and retrofit programs.
The main earnings drivers, however, were lower operating expenses for the majority of EDC’s plants, and higher proceeds from insurance claims, mainly due to BacMan, which contributed to a 4.0 percent increase in EDC’s recurring attributable net income of PHP9.2 billion in 2016 from PHP8.8 billion the previous year.

HYDRO

Our hydroelectric power plants generally performed well in 2016. In particular, runoff from typhoons Lando (Koppu) and Nona (Melor) increased power generation by 19.3 percent at the 132-MW Pantabangan- Masiway Hydroelectric Complex, raising its income contribution by USD5.1 million to USD13.5 million in 2016. Our hydro platform reported a corresponding increase in revenues from USD42.4 million in 2015 to USD49.1 million this year.
We acquired three new hydro concessions in 2016: the 175-MW Binongan-Tineg in Abra, the 160-MW Cagayan 1N in Bukidnon, and the 17.5-MW Cateel in Davao Oriental. We are looking to expand our Greenfield operations in Mindanao by developing three run-ofriver hydroelectric power plants with a combined generation capacity of 95 MW, namely: the 32-MW Bubunawan and 33- MW Tagoloan plants in Bukidnon, and the 30-MW Puyo in Agusan del Norte.

SOLAR AND WIND

This year also marked our branching out from solar power generation to the installation of solar rooftop systems. Through EDC, we partnered with retailer Gaisano Capital to install solar panels on the rooftop of the Gaisano Capital Iloilo in La Paz, Iloilo City. This is the biggest of six low-carbon and environment-friendly energy projects that is being undertaken in Panay Island; the remaining five rooftop projects will have a total capacity of 2.5 MW. We are also looking at other partnerships for various commercial developments.
Efficient operations within the wind farm assured near-perfect availability at 98.4 percent, which is slightly better than the previous year’s 97.4 percent. Energy generated for the 150-MW Burgos Wind also rose to 320.4 GWh this year compared to last year’s 252.7 GWh. The wind farm, which is the country’s largest wind energy project, received its Global Wind Organization Certification, and Advanced Rescue Training, both completed in September 2016. Multiple typhoonproofing activities were also completed for the power plant this year.