Under manufactured capital, EDC takes on risks such as natural catastrophe, project execution, equipment reliability risks, and geothermal capacity.
The worsening climate crisis and extreme weather conditions pose a serious concern to EDC’s operations, facilities, and host communities. Typhoon Odette was one such event that damaged infrastructure and disrupted day-to-day living in 2021.
Its landfall in the Visayas region in December 2021 resulted in outages at our geothermal power plants in Leyte. While we were able to restore facilities, which sustained minor impact, in 5 days, damage to transmission lines operated and maintained by the National Grid Corporation of the Philippines (NGCP) continued to affect electricity distribution. Additionally, the Nasulo power plant experienced an outage in March due to the activation of its main transformer On Load Tap Changer surge relay. It was repaired and restored within 52 days.
To address and further prevent outages such as these, we developed a Natural Catastrophe (NatCat) Resiliency Framework that covers initiatives before, during, and after disasters. These include identifying potential landslide areas and mitigations, installing sensors as early warning devices on ground movements, and developing dashboards for realtime sensor monitoring. We also established an on-site weather forecasting system in partnership with a weather forecasting company and created a hazard map model on landslide susceptibility and forest fire hazards.
In Leyte, we completed all six (6) typhoon-proofing building projects, lowering the risk level for typhoons from high to medium. EDC also completed two (2) cooling tower replacement projects, addressing the risks from earthquakes and typhoons. The buildings and cooling towers did not sustain heavy damage from Typhoon Odette that hit in December 2021.
In mitigating geohazard risks such as landslides and floods, EDC has completed all nine (9) mitigation projects fleetwide. With the controls put in place, we have lowered the risk levels in these areas from medium to low. We have also completed two (2) additional projects. These are the landslide mitigation for the new expansion areas in Leyte- Pad MGM and Pad UMD. We have been proactively identifying and mitigating potential risks even before wells are drilled and pipelines are constructed.
Furthermore, EDC conducted the following activities to support resilience to natural catastrophes:
• Quarterly Updating of Risk Assessments
• Implementation of Forest Fire Protection Measures (Establishment of Firelines, Engagement of Fire Trucks, Purchase of Fire Fighting Tools)
• Conduct of LiDAR Survey and Updating of Landslide Susceptibility Maps
• Re-deployment of Emergency Restoration Structures to ensure quick Return-to-Service in case of transmission line damage during typhoons
• Geohazard Assessments for both local and international projects
As a result of these continuous efforts in mitigating risks to natural catastrophes, EDC is now at medium risk levels in terms of typhoons, geohazards, and forest fires. We still have high risk nodes for earthquakes, but we are gradually reducing them through the continuation of the NatCat Resiliency Program.
Mitigating earthquake risk is one of the EDC’s priorities for the coming years. We will continue with the cooling tower replacement program and strengthen our powerhouses and critical buildings through structural retrofitting.
In relation to the risks from the ongoing pandemic, new guidelines and protocols were laid out and are continuously being revisited as new evidence arrives. EDC provided equipment necessary for the implementation of the protocols including, but not limited to, ventilation improvements, thermal scanners, medicines, and PPE. We also hired additional human resources for health (HRH) including various health experts and implementers on the ground.
We also mitigated equipment and project execution risks in some of our facilities through an Asset Management System, aligned with ISO 55000:2014 standards. Key parts of the EDC Asset Management System include Reliability Centered Maintenance (RCM), Risk-Based Inspection (RBI), and Maximo, our enterprise asset management solution from IBM. In addition, EDC identified asset-related risks through the Failure Mode Effects Criticality Analysis (FMECA). The critical risks are included in the Critical Asset Risk Register (CARR), which is managed at the facility level. These insights are further incorporated in developing the LongTerm Asset Plan (LTAP).
In our geothermal operations, EDC faced challenges in steam decline and reservoir processes, insufficientreinjection capacity, well integrity issues, and the experimental nature of major innovation projects. To ensure these risks are addressed, we implemented a management-approved Drilling Program and a Project Stage Gating Process, along with Well Risk Review Framework and Well Risk And Asset Management that reinforced the operational efficiency of our facilities. We also implemented the Leytex Bilateral Steam Exchange as part of our Fluid Collection and Recycling System (FCRS) optimization initiative.
In addition, we installed a scale-inhibition system by Nalco Water (an Ecolab company) to address the crucial blockage in the two-phase header where all the wells of a production pad are connected. This was caused by mineral deposits of silica and iron sulfide, obstruction that could have decreased the geothermal output of the wells by 65%. Two products were used to prevent or slow down future blockage rate. blockage: Nalco® GEO980 and Nalco ® GEO962. The first tool, Nalco® GEO980, greatly reduced silica buildup, while Nalco ® GEO962 dispersed and controlled the iron sulfide. These products were selected through Nalco Water’s Geomizer™, a digital modeling tool that determines the proper remedies for a plant’s scale and corrosion risk. Then, Nalco Water implemented a treatment plan following a technical evaluation. After four months, the treatment plan resulted in a 70% annual reduction in scaling and prevented production decline. It also reduced downtime, reduced chemistry usage, and increased the interval between mechanical pipeline cleanings twice a year to once every two years.
We also introduced Low Temperature Arc Welding for our power plants and qualified the methods for our rotating equipment repairs. As a result of the considerable time spent in workshops employing another type of cold submerged arc welding (SAW), turbine diaphragms no longer warp and rotors don’t bend. In the past, the SAW method would often result in bent rotors that would have to be shipped to Indonesia, Australia, Scotland or the US, with substantial costs and prolonged outages. One rotor that bent ultimately cost close to PHP 40 million to repair. In collaboration with our local partners, we slowly worked to establish capability, developed work procedures, and qualified both the technology and methodology. We started with non-rotating parts to prove our technology. In the first stage of the process, we repaired valves and valve flanges (the part of the valve where gaskets are embedded) and proved successfully that the technology works. Our age-old expensive issue of warping flanges with the old welding and rebuilding methods are now a thing of the past. Crucially, the turbine rotor journals, the part of the rotor that rests on the bearing, used to take six months and caused considerable risk of bent rotors given that the repairs expose the equipment to 650°C temperatures. If the rotors are bent, shipping would take two to three months round-trip, and stress relieving or straightening would take another three months.
As of January 2022, we now have 100% rotating spares, many of which have used the new method. The method is also used to repair eroded leading edges of blades normally in the low pressure stages on the back end of the turbine, where most of the condensation takes place.
In the past, a turbine repair that ended up with a bent rotor cost us over USD 1 million to repair, with close to 13 months of opportunity cost. Today, the repair takes three months at a cost of sub USD 300,000, with certainty in the outcome and substantially less stress on the equipment along the way.
Considering the importance of EDC to integrating these new systems with our operations, we continue to implement initiatives to protect, maintain, and upgrade our manufactured capital. These are enhanced resource management, geoscientific activities, continuous development and testing of existing wells, drilling of new wells, and well intervention, to name a few. For our geothermal reservoirs, we have routine monitoring and maintenance, which include preventive and corrective maintenance.
All of these underscore EDC’s focus on purposeful innovation, leveraging technology to further advance its mission to build a decarbonized and regenerative future.
