Download Full 2023 Report

EDC Integrated
Report 2023

EDC Integrated
Report 2023

Federico R. Lopez
Chairman of the Board

Chairman's
Message

The President's
Message

Jerome H. Cainglet
President and CEO

Federico R. Lopez
Chairman and Chief Executive Officer

Chairman's
Message

Jerome H. Cainglet
President and Chief Operations Officer

The President’s
Message

Federico R. Lopez
Chairman and Chief Executive Officer

Chairman's
Message

Dear Shareholders,

2023 was a harsh year for our planet. It was the hottest year on historical record by a substantial margin of +0.15°C over the previous high set in 2016; and it’s most likely the hottest year in the last 100,000 years. It’s no exaggeration that every person from every corner of the world has experienced this past year the “unprecedented fury” unleashed by all the extreme weather events that have been increasing and occurring more frequently, “supercharged” by climate change.

  • Scorching and prolonged heatwaves were felt across the continents, setting new temperature records in Southern Europe, North Africa and the Middle East and in countries like the US and China.
  • Raging wildfires such as in Maui Island, Canada, and Greece were considered the worst and the largest experienced in these areas, burning down forests, properties, and even claiming lives.
  • Powerful hurricanes, cyclones and typhoons swept across the various regions, causing devastating floods like Cyclone Freddy, which was one of the longest lasting cyclones that lasted for 34 days. Another storm, Daniel brought record rainfall in Libya that overwhelmed dams and caused deadly flooding as more than 4,000 people died and over 10,000 more were gone missing. Tropical cyclone Mocha hit Myanmar and affected some 800,000 people in the region. Typhoon Mawar lashed out in Guam and was the strongest storm to affect the island since 2002. It also affected the Philippines as Super Typhoon Betty with a peak intensity of 215kph.
  • There were intense rainfall and extreme precipitation too, that caused flash floods in New York, Hong Kong and parts of Northern Europe.

 

The extremely high temperature also contributed to record breaking levels for ocean heat and acidification, sea level rise, Antarctic sea ice loss and  glacier retreat. What scientists have been fearing and warning us on the devastating effects of climate change continue to unfold every single day now, highlighting our own vulnerabilities to the powerful wrath of nature. We are in the midst of a climate crisis that we ourselves have caused and the cost of further inaction can only be catastrophic.

What’s more, the 2023 Global Stocktake (GST) revealed that the world is not on track on limiting global warming to 1.5°C. The GST is a core component of the 2015 Paris Agreement that assesses each country’s progress on climate action and encourages them to augment their climate goals. The slow mitigation could have been compensated by adaptation to shield us from the worsening climate change impacts, but the UN Environmental Programme (UNEP) Adaptation Gap Report of 2023 noted the world is also underfinanced and underprepared from the climate hazards.

Amidst all these, how then can we secure the future of humanity? 

Many scientists have expressed the urgency for more ambitious climate action. In the words of UN secretary general Antonio Guterres: “Leaders can’t kick the can any further. We’re out of road.”  

At the conclusion of COP28 in December 2023, negotiators from all over the world worked overtime to deliver a new plan to address the mounting crisis posed by human-induced climate change. Key was the agreement to “transition away from fossil fuels in energy systems” as well as to support vulnerable nations most impacted by climate change through pledges to a loss and damage fund. There was also progress on the $100.0 Billion pledged by developed nations to finance climate mitigating and adaptation initiatives in developing countries. The Global Goal on Adaptation was also included to encourage “accelerating the use of ecosystem-based adaptation and nature-based solutions.”

For the Philippines, we saw the systematic approach undertaken by our government from updating our National Greenhouse Gas (GHG) Inventory, to the crafting of the Philippine Climate Change Assessment Report 2018-2023 with the help of the Oscar M. Lopez Center, and the completion of the National Adaptation Plan focused on food security, water sufficiency, ecosystem and environmental stability and human security which are all for release in 2024. We await finalization of the implementation plan of our Nationally Determined Contribution (NDC) to complete the foundation to rally all sectors to climate action. Complementing the government blueprint are planned regulations to align the private sector to this course, borne out of recognition that businesses contribute largely to the national GHG footprint. We also anticipate the adoption by the Securities and Exchange Commission of the international sustainability and climate standards for disclosure based on the prescriptions of the International Financial Reporting Standards Board in June 2023. 

At the FPH Group, we’ve been actively speaking about the global Journey to Net Zero through its three phases namely: (1) reducing the current level of greenhouse gas emissions of 59 gigatons per year and seeing emissions peak by 2025; (2) then eliminating all GHG emissions and getting to Net Zero by 2050; (3) and then finally reducing the concentration of GHGs in the atmosphere and achieve net negative emissions. We must bear in mind that the ultimate goal is to solve the climate crisis that, by all accounts, is undeniably real and in urgent need of action. We have a narrowing time frame of the next 26 years to make our every action count and avoid irreversible damage to our planet.

Foremost is the need to decarbonize and scale up the greening of our electricity grid. This entails not only changing the electricity system but building a new global energy system with components we have never built before and at a massive scale. We believe this to be the greatest energy transition in the history of mankind.

Our diverse portfolio of clean and renewable energy sources allows us the best opportunity to shepherd our country’s energy transition to Net Zero. Aligned with the Philippine Energy Plan, we’ve set our target to grow our low carbon energy portfolio to 13,000 MW by 2030, of which 9,000 MW will be from renewable energy. We’ve lined up our expansion and growth projects utilizing our various fuels of geothermal and hydro and we are eyeing to expand our solar and wind power facilities through several service contracts in various sites all over the country that will be explored in the next few years. 

Still, we recognize the importance to keep the lights on during this energy transition, more so with the imminent depletion of our Malampaya natural gas reserves. In 2023, we completed our LNG terminal facility situated at the First Gen Clean Energy Complex and ushered our floating storage and regasification vessel, the BW Batangas into the Batangas Bay. We’ve began importing LNG for testing and commissioning, and the LNG facility is ready to make up for any shortfall in Malampaya production and to continue to power our natural gas plants. This early though, we are looking at new technologies and alternative fuels to repower our natural gas plants, consistent with our own commitment to Net Zero by 2050. At Energy Development Corporation, we’ve embarked on a massive multi-year well-drilling operation to expand output for our various geothermal power plants to ensure a more steady and reliable supply from one of the few renewable energy sources capable of delivering power on a 24/7 basis. In May 2023, we won the bid for the 165-MW Casecnan hydro facility that, in combination with our Pantabangan-Masiway plants and our planned Project Aya pumped storage facility, gives us control over such a unique hydro asset complex. With the turnover of Casecnan in February 2024, we are now working to realize synergies in our hydro operations to supply the country’s growing demand for clean energy.

As we clean up our energy grid, we are also working to scale up energy efficiency as the “first fuel” and encourage its use everywhere. Today these efforts are still sparse and fragmented but have great potential to reduce carbon emissions and bring real cost savings and enhance the bottom lines of our customers. We’ve been developing our own arsenal of solutions such as rooftop solar, remote energy monitoring systems that allows consumers real-time monitoring of energy consumption, energy efficiency audits and solutions for commercial and industrial establishments, and distributed microgrids and resilient power solutions that can deliver reliable electricity all with the view to address the many pain points experienced by consumers. 

We recognize though that it takes more than energy security and energy transition to stabilize the distressing state of the climate. While addressing the climate crisis feels such a daunting task, we remain optimistic and hopeful. Our FPH Mission “to forge collaborative pathways to a decarbonized and regenerative future” continues to guide our path and we reaffirm our commitment to collaborate with our stakeholders, the government and the global community in the continuing fight to secure our future. Thank you for your continued and unwavering trust and support.

Frederico R. Lopez

Chairman of the Board

The President’s
Message

To our dear Stakeholders,

With humility and great honor, I greet you as EDC’s new President and COO.

2023 is a banner year for EDC as we achieved our highest-ever Recurring Net Income Attributable (RNIA) of PHP14.2 billion, close to a 30% increase from PHP11.2 billion in 2022.

This is no mean feat as we did this despite the major challenges we had to deal with, particularly the very difficult year-long continued search for rigs suited for our sites. This forced us to look for alternative ways to maintain our target steam production and electricity generation for the year.

We also began laying the foundation for our company’s long-term growth as we embarked on seven projects simultaneously in 2023. More importantly, it also marked the beginning of a more meaningful engagement, not just participation, by our co-employees at all levels in the organization and our contractors in EDC’s Health, Safety, and Environment (HSE) culture transformation.

We will continue to inculcate this way of working in EDC and maintain our alignment with our parent company, First Gen Corporation, to fulfill our mission to forge collaborative pathways for a decarbonized and regenerative future.

I assure everyone that under my term as President, our company will continue to build on the successes of my predecessor as we strive to achieve exponential growth.

2023 Retrospective

Looking at 2023 in retrospect, we continued to focus on four priority areas: 1) Improve HSE Performance, 2) Stabilize the Base Generation, 3) Achieve Financial Targets, and 4) Achieve Growth Targets.

Priority 1: Improve HSE Performance

EDC ended 2023 with a Total Recordable Incident Rate (TRIR) of 0.21, which included the tragic crash of our CESSNA aircraft in February that took the lives of four of our dear colleagues. Looking at it from the perspective of our core activities (operations, maintenance, construction), it is worth noting that our TRIR is at 0.17—something favorably comparable to the TRIR of global oil and gas giants and just slightly above our TRIR of 0.16 in 2022.

Our HSE improvement programs have started to bear fruit with increased awareness, care, and commitment among our employees and external partners. Cultivating a strong and dynamic HSE culture empowers our employees to catch and correct unsafe work practices before they escalate into accidents. By giving them support and opportunities to intervene on potential HSE risks and through quarterly HSE Contractors’ Forums, we promote a safe space for anyone at any level in EDC and among our contractors to openly identify and quickly address gaps in our HSE protocols.

Priority 2: Stabilize Base Generation

Our geothermal plants achieved a generation of 7,059 GWh in 2023, 1.3% below our 2022 generation of 7,154 GWh. We consider this a huge achievement given the unavailability of rigs in the second half of 2022 and the majority of 2023 that prevented us from offsetting the natural decline of our resources. This reflects the enormous efforts of our teams collaborating closely throughout the year to optimize generation and minimize interruptions.

Among the measures we implemented included optimizing our facilities and steamfield maintenance activities during periods of lower grid demand and ensuring our fast well revival rate through various well hypercare initiatives. These include risk assessments and mitigations for every wellbore diagnostic so that no wells or production are lost during surveys. As a result, we attained a higher plant availability of 93% in 2023 (vs 91% in 2022) and a lower Unplanned Well Outage Rate of 0.9% (vs 1.5% in 2022).

I am likewise pleased to share that our climate resiliency efforts continue to bear fruit. Between 2018 and 2023, our geothermal plants have seen zero major insurance claims from natural disasters. This success stems from our typhoon and earthquake-proofing initiatives that made our plants more robust than required by Philippine regulations.

We were fortunate to benefit from higher wind in 2023, with our Burgos wind farm contributing 367 GWh to our generation, up by 17% compared to the 2022 generation of 313 GWh. Our solar projects contributed 17 GWh in 2023, also up by 30% compared to 13 GWh generation in 2022.

Priority 3: Achieve Financial Targets

Our record-breaking RNIA reflects the growing market appreciation for geothermal as a renewable energy source—the Holy Grail among RE technologies—given its inherent capacity to provide a clean, stable source of 24/7 power, or what we refer to as Geo 24/7.

The Philippines, just like the rest of the world, experienced unusually high market volatility due to global events impacting fossil fuel costs. Our customers, however, benefited instead from a reliable and competitive electricity supply from our geothermal plants as we are least affected by fluctuating global fossil fuel prices.

This all the more emphasizes the imperative to produce as much kWh from geothermal energy as possible. We look to our ongoing unprecedented drilling campaign and renewed vigor in the search for growth opportunities to put us in a position to serve customers who, more and more, are clamoring for a reliable supply of renewable energy.

Priority 4: Achieve Growth Targets

Despite all our efforts, technical and execution issues with our Palayan Bayan Geothermal Power Plant led to delays in its target completion in the first half of 2023. Previous pandemic restrictions limited our available manpower and slowed down Palayan Bayan’s construction, resulting in a domino effect on the overall construction timeline of the plant. Further setbacks arose due to Bicol’s susceptibility and vulnerability to natural hazards such as typhoons, necessitating road closures and suspension of various activities, including civil and electrical works. Palayan Bayan was finally successfully synchronized to the Luzon grid in January 2024 and is now providing 28MW of additional capacity during this year’s critical summer months.

We also marked 2023 with exciting milestones achieved for our other six growth initiatives. The civil works and delivery of critical equipment for our 28 MW Mahanagdong, 20 MW Tanawon, and 5.6 MW Bago geothermal projects commenced in 2023, putting these projects on track for their target commissioning and operation by the end of 2024. Our Battery Energy Storage System (BESS) Projects in BacMan (20 MWh), Leyte (10 MWh), and Southern Negros (10 MWh) are also on their way to commissioning in 2024.

EDC likewise won and was awarded two new geothermal sites at Mt. Sembrano and Buguias-Tinoc by the Department of Energy during the latter’s auction in August. These sites provide prime opportunities for greenfield development and are excellent additions to our sites in Amacan in Davao de Oro, Mt. Zion in Davao del Sur, and Mainit-Sadanga in the Mountain Province. Pre-development activities have begun for all these projects, with a potential total capacity estimated at between 250 MW and 320 MW equivalent. Subject to resource confirmation and commercial viability, construction is targeted to begin between 2028 and 2035, with operations expected to commence from 2030 onwards.

It has been a while since we have had greenfield geothermal development in the country, but with the growing need for renewable energy, we are excited to be in a position to meet this demand with these prospects.

Collaboration was key in managing our biggest concern in 2023 related to our growth projects. We assisted in the arduous worldwide search for rigs by our contractor, ThermaPrime, to make up for the absence of an operating rig since the decision in 2022 to rehabilitate Rig 1 to meet global industry standards and to decommission Rigs 5 and 12 for safety reasons.

Through the joint efforts of our teams and ThermaPrime, Rig 1 was recommissioned in the last quarter of 2023. By the end of 2023, we had engaged ThermaPrime for four additional rigs that will be available in 2024.

Taking Care of Our Co-Creators

It brings me great pride to lead a company whose employees are committed to serving the country by providing a reliable source of 24/7 clean power. Our achievements would not have been possible without the unwavering dedication of our workforce. As essential partners in ensuring EDC’s ability to fulfill our regenerative mission and purpose, and ultimately our future, caring for them is, therefore, a commitment that we take very seriously, something we call “pampamilyang malasakit.”

Our employees have a voice, and we listen. In our Employee Engagement survey, EDC garnered a 90% total favorable score based on Willis Towers Watson’s High Performing Employee Experience survey, where we had a 98% survey response rate. This score is 2% higher than the Global High Performance Norm and 7% higher than the Energy and Utilities Norm. Beyond the survey scores, however, we take pride in our employees’ openness to share feedback. This allows us to explore areas that could further improve their personal and professional lives to allow for a richer and more sustained engagement with EDC.

We now recognize both remote and work-on-premise arrangements based on EDC’s business and operational needs and each employee’s role. This arrangement also makes us future-ready by providing flexibility to accommodate the evolving needs of the organization and individual concerns to keep employees engaged.

EDC also crafted guidelines to promote diversity, equality, and inclusion and ensuring safe spaces, reflecting an even more holistic approach to caring for our employees and other stakeholders.

Securing EDC’s Long-Term Future
2024 will be our springboard year as we secure EDC’s long- term future.

Drilling operations program

The success of our ambitious drilling operations program in 2024 will ensure adequate steam resources to power our generation assets. We aim to drill 22 to 25 wells by the end of 2024, almost four times the highest annual number of wells we drilled in the past five years. We expect to encounter obstacles as this is no easy task. Nevertheless, we are excited to once again accomplish something unprecedented in 2024, buoyed by a common focus across EDC to collaborate even more closely, not just internally among the different verticals but also externally, especially with our major contractors and affiliates.

A renewed commitment to HSE culture

In 2024, we will revise our key performance indicators on HSE by highlighting leading indicators, such as our ability to manage critical HSE risks and prevent events that can result in severe injuries or fatalities.

EDC will continue to work on further progressing our transformation journey towards a regenerative safety culture. We want our people to keep in mind that safety forms part of our core values and to be more mindful of the various HSE safety hazards and risks as we operate and go about our day-to-day activities.

Financial and generation targets

We expect our 2024 financial performance to be lower than our record-setting performance in 2023. Similarly, our 2024 generation is expected to be lower than 2023’s as we focus on meeting our drilling targets to enable our steam production to increase and recover from our wells’ natural decline in capacity. Aside from the five rigs that shall be provided by ThermaPrime, we have been able to identify and rent two additional rigs. Our seven-rig campaign for both production and make-up/workover wells will put our steam production back on track by the end of 2024. We expect to go back to an upward trend in generation and our financial performance starting in 2025.

Growth targets and projects

Our goal is to ensure that our six growth initiatives are commissioned and ready to operate by the end of 2024. Completing these 53.6 MW geothermal and 40 MWh BESS projects will help EDC move closer to our regenerative goals by augmenting our renewable energy supply to meet the growing needs of our customers.

Decarbonizing our country

EDC’s investments and portfolio remain at the heart of our net zero campaign and will be crucial to helping the country reduce its overall carbon footprint.

As we grow EDC, we are also committed to continuing our environmental advocacy and fostering inclusive growth in our partner communities. We will continue to provide them with the tools, resources, and support to enhance their capabilities as the area’s natural stewards.

As we have been doing for some time now, we go beyond simply promoting a harmonious relationship with our community partners and work with them to elevate their regenerative capabilities. This includes bridging forest gaps and creating more carbon sinks in the vicinity of our facilities and even beyond through our 15-year BINHI greening legacy program. With the help of our 88 farmers’ associations and over 200 partners across the country, we have planted close to seven million trees, composed of close to a hundred flagship Philippine native tree species, some of which are threatened hardwoods, in over 10,260 hectares of land.

Likewise, our mission aligns well with our objective of collaborating with our Net-Zero Carbon Alliance (NZCA) partners. We currently have a 20-strong partner list committed to carbon neutrality as a transition to net zero. EDC will continue to provide the support our NZCA partners need to meet their decarbonization goals.

Our growth investments, complemented by our decarbonization programs, can help herald a future where renewable energy becomes the bedrock of regeneration in the Philippine energy sector.

We believe that we can even be stronger and become a more powerful agent of change in the right direction by working with First Gen Corporation and enhancing our combined power portfolio. We know that we are bigger together and we can leverage our resources and unleash a synergy that propels us beyond the sum of our individual strengths. Together, we can create a formidable force that multiplies our impact several-fold, serves our customers’ increasing clean energy needs, and enables the country’s successful transition to net zero.

I will continue to lead EDC and our co-employees as we continue to work with you, our dear stakeholders, in navigating this transformative journey towards a regenerative tomorrow.

Jerome H. Cainglet

President & CEO

Jerome H. Cainglet
President and Chief Operations Officer

Jerome H. Cainglet
President and Chief Operations Officer

The President’s
Message

To our dear Stakeholders,

With humility and great honor, I greet you as EDC’s new President and COO.

2023 is a banner year for EDC as we achieved our highest-ever Recurring Net Income Attributable (RNIA) of PHP14.2 billion, close to a 30% increase from PHP11.2 billion in 2022.

This is no mean feat as we did this despite the major challenges we had to deal with, particularly the very difficult year-long continued search for rigs suited for our sites. This forced us to look for alternative ways to maintain our target steam production and electricity generation for the year.

We also began laying the foundation for our company’s long-term growth as we embarked on seven projects simultaneously in 2023. More importantly, it also marked the beginning of a more meaningful engagement, not just participation, by our co-employees at all levels in the organization and our contractors in EDC’s Health, Safety, and Environment (HSE) culture transformation.

We will continue to inculcate this way of working in EDC and maintain our alignment with our parent company, First Gen Corporation, to fulfill our mission to forge collaborative pathways for a decarbonized and regenerative future.

I assure everyone that under my term as President, our company will continue to build on the successes of my predecessor as we strive to achieve exponential growth.

2023 Retrospective

Looking at 2023 in retrospect, we continued to focus on four priority areas: 1) Improve HSE Performance, 2) Stabilize the Base Generation, 3) Achieve Financial Targets, and 4) Achieve Growth Targets.

Priority 1: Improve HSE Performance

EDC ended 2023 with a Total Recordable Incident Rate (TRIR) of 0.21, which included the tragic crash of our CESSNA aircraft in February that took the lives of four of our dear colleagues. Looking at it from the perspective of our core activities (operations, maintenance, construction), it is worth noting that our TRIR is at 0.17—something favorably comparable to the TRIR of global oil and gas giants and just slightly above our TRIR of 0.16 in 2022.

Our HSE improvement programs have started to bear fruit with increased awareness, care, and commitment among our employees and external partners. Cultivating a strong and dynamic HSE culture empowers our employees to catch and correct unsafe work practices before they escalate into accidents. By giving them support and opportunities to intervene on potential HSE risks and through quarterly HSE Contractors’ Forums, we promote a safe space for anyone at any level in EDC and among our contractors to openly identify and quickly address gaps in our HSE protocols.

Priority 2: Stabilize Base Generation

Our geothermal plants achieved a generation of 7,059 GWh in 2023, 1.3% below our 2022 generation of 7,154 GWh. We consider this a huge achievement given the unavailability of rigs in the second half of 2022 and the majority of 2023 that prevented us from offsetting the natural decline of our resources. This reflects the enormous efforts of our teams collaborating closely throughout the year to optimize generation and minimize interruptions.

Among the measures we implemented included optimizing our facilities and steamfield maintenance activities during periods of lower grid demand and ensuring our fast well revival rate through various well hypercare initiatives. These include risk assessments and mitigations for every wellbore diagnostic so that no wells or production are lost during surveys. As a result, we attained a higher plant availability of 93% in 2023 (vs 91% in 2022) and a lower Unplanned Well Outage Rate of 0.9% (vs 1.5% in 2022).

I am likewise pleased to share that our climate resiliency efforts continue to bear fruit. Between 2018 and 2023, our geothermal plants have seen zero major insurance claims from natural disasters. This success stems from our typhoon and earthquake-proofing initiatives that made our plants more robust than required by Philippine regulations.

We were fortunate to benefit from higher wind in 2023, with our Burgos wind farm contributing 367 GWh to our generation, up by 17% compared to the 2022 generation of 313 GWh. Our solar projects contributed 17 GWh in 2023, also up by 30% compared to 13 GWh generation in 2022.

Priority 3: Achieve Financial Targets

Our record-breaking RNIA reflects the growing market appreciation for geothermal as a renewable energy source—the Holy Grail among RE technologies—given its inherent capacity to provide a clean, stable source of 24/7 power, or what we refer to as Geo 24/7.

The Philippines, just like the rest of the world, experienced unusually high market volatility due to global events impacting fossil fuel costs. Our customers, however, benefited instead from a reliable and competitive electricity supply from our geothermal plants as we are least affected by fluctuating global fossil fuel prices.

This all the more emphasizes the imperative to produce as much kWh from geothermal energy as possible. We look to our ongoing unprecedented drilling campaign and renewed vigor in the search for growth opportunities to put us in a position to serve customers who, more and more, are clamoring for a reliable supply of renewable energy.

Priority 4: Achieve Growth Targets

Despite all our efforts, technical and execution issues with our Palayan Bayan Geothermal Power Plant led to delays in its target completion in the first half of 2023. Previous pandemic restrictions limited our available manpower and slowed down Palayan Bayan’s construction, resulting in a domino effect on the overall construction timeline of the plant. Further setbacks arose due to Bicol’s susceptibility and vulnerability to natural hazards such as typhoons, necessitating road closures and suspension of various activities, including civil and electrical works. Palayan Bayan was finally successfully synchronized to the Luzon grid in January 2024 and is now providing 28MW of additional capacity during this year’s critical summer months.

We also marked 2023 with exciting milestones achieved for our other six growth initiatives. The civil works and delivery of critical equipment for our 28 MW Mahanagdong, 20 MW Tanawon, and 5.6 MW Bago geothermal projects commenced in 2023, putting these projects on track for their target commissioning and operation by the end of 2024. Our Battery Energy Storage System (BESS) Projects in BacMan (20 MWh), Leyte (10 MWh), and Southern Negros (10 MWh) are also on their way to commissioning in 2024.

EDC likewise won and was awarded two new geothermal sites at Mt. Sembrano and Buguias-Tinoc by the Department of Energy during the latter’s auction in August. These sites provide prime opportunities for greenfield development and are excellent additions to our sites in Amacan in Davao de Oro, Mt. Zion in Davao del Sur, and Mainit-Sadanga in the Mountain Province. Pre-development activities have begun for all these projects, with a potential total capacity estimated at between 250 MW and 320 MW equivalent. Subject to resource confirmation and commercial viability, construction is targeted to begin between 2028 and 2035, with operations expected to commence from 2030 onwards.

It has been a while since we have had greenfield geothermal development in the country, but with the growing need for renewable energy, we are excited to be in a position to meet this demand with these prospects.

Collaboration was key in managing our biggest concern in 2023 related to our growth projects. We assisted in the arduous worldwide search for rigs by our contractor, ThermaPrime, to make up for the absence of an operating rig since the decision in 2022 to rehabilitate Rig 1 to meet global industry standards and to decommission Rigs 5 and 12 for safety reasons.

Through the joint efforts of our teams and ThermaPrime, Rig 1 was recommissioned in the last quarter of 2023. By the end of 2023, we had engaged ThermaPrime for four additional rigs that will be available in 2024.

Taking Care of Our Co-Creators

It brings me great pride to lead a company whose employees are committed to serving the country by providing a reliable source of 24/7 clean power. Our achievements would not have been possible without the unwavering dedication of our workforce. As essential partners in ensuring EDC’s ability to fulfill our regenerative mission and purpose, and ultimately our future, caring for them is, therefore, a commitment that we take very seriously, something we call “pampamilyang malasakit.”

Our employees have a voice, and we listen. In our Employee Engagement survey, EDC garnered a 90% total favorable score based on Willis Towers Watson’s High Performing Employee Experience survey, where we had a 98% survey response rate. This score is 2% higher than the Global High Performance Norm and 7% higher than the Energy and Utilities Norm. Beyond the survey scores, however, we take pride in our employees’ openness to share feedback. This allows us to explore areas that could further improve their personal and professional lives to allow for a richer and more sustained engagement with EDC.

We now recognize both remote and work-on-premise arrangements based on EDC’s business and operational needs and each employee’s role. This arrangement also makes us future-ready by providing flexibility to accommodate the evolving needs of the organization and individual concerns to keep employees engaged.

EDC also crafted guidelines to promote diversity, equality, and inclusion and ensuring safe spaces, reflecting an even more holistic approach to caring for our employees and other stakeholders.

Securing EDC’s Long-Term Future
2024 will be our springboard year as we secure EDC’s long- term future.

Drilling operations program

The success of our ambitious drilling operations program in 2024 will ensure adequate steam resources to power our generation assets. We aim to drill 22 to 25 wells by the end of 2024, almost four times the highest annual number of wells we drilled in the past five years. We expect to encounter obstacles as this is no easy task. Nevertheless, we are excited to once again accomplish something unprecedented in 2024, buoyed by a common focus across EDC to collaborate even more closely, not just internally among the different verticals but also externally, especially with our major contractors and affiliates.

A renewed commitment to HSE culture

In 2024, we will revise our key performance indicators on HSE by highlighting leading indicators, such as our ability to manage critical HSE risks and prevent events that can result in severe injuries or fatalities.

EDC will continue to work on further progressing our transformation journey towards a regenerative safety culture. We want our people to keep in mind that safety forms part of our core values and to be more mindful of the various HSE safety hazards and risks as we operate and go about our day-to-day activities.

Financial and generation targets

We expect our 2024 financial performance to be lower than our record-setting performance in 2023. Similarly, our 2024 generation is expected to be lower than 2023’s as we focus on meeting our drilling targets to enable our steam production to increase and recover from our wells’ natural decline in capacity. Aside from the five rigs that shall be provided by ThermaPrime, we have been able to identify and rent two additional rigs. Our seven-rig campaign for both production and make-up/workover wells will put our steam production back on track by the end of 2024. We expect to go back to an upward trend in generation and our financial performance starting in 2025.

Growth targets and projects

Our goal is to ensure that our six growth initiatives are commissioned and ready to operate by the end of 2024. Completing these 53.6 MW geothermal and 40 MWh BESS projects will help EDC move closer to our regenerative goals by augmenting our renewable energy supply to meet the growing needs of our customers.

Decarbonizing our country

EDC’s investments and portfolio remain at the heart of our net zero campaign and will be crucial to helping the country reduce its overall carbon footprint.

As we grow EDC, we are also committed to continuing our environmental advocacy and fostering inclusive growth in our partner communities. We will continue to provide them with the tools, resources, and support to enhance their capabilities as the area’s natural stewards.

As we have been doing for some time now, we go beyond simply promoting a harmonious relationship with our community partners and work with them to elevate their regenerative capabilities. This includes bridging forest gaps and creating more carbon sinks in the vicinity of our facilities and even beyond through our 15-year BINHI greening legacy program. With the help of our 88 farmers’ associations and over 200 partners across the country, we have planted close to seven million trees, composed of close to a hundred flagship Philippine native tree species, some of which are threatened hardwoods, in over 10,260 hectares of land.

Likewise, our mission aligns well with our objective of collaborating with our Net-Zero Carbon Alliance (NZCA) partners. We currently have a 20-strong partner list committed to carbon neutrality as a transition to net zero. EDC will continue to provide the support our NZCA partners need to meet their decarbonization goals.

Our growth investments, complemented by our decarbonization programs, can help herald a future where renewable energy becomes the bedrock of regeneration in the Philippine energy sector.

We believe that we can even be stronger and become a more powerful agent of change in the right direction by working with First Gen Corporation and enhancing our combined power portfolio. We know that we are bigger together and we can leverage our resources and unleash a synergy that propels us beyond the sum of our individual strengths. Together, we can create a formidable force that multiplies our impact several-fold, serves our customers’ increasing clean energy needs, and enables the country’s successful transition to net zero.

I will continue to lead EDC and our co-employees as we continue to work with you, our dear stakeholders, in navigating this transformative journey towards a regenerative tomorrow.

Jerome H. Cainglet

President & CEO