FAQs

Questions on Geothermal Energy

1.  What is geothermal energy?

In Greek, geo means “earth” and thermos means “heat”. Thus, geothermal energy comes from the heat of the earth.

The heat source is the magma which comes close to the earth’s surface in some places.

The heat in a geothermal system can be harnessed in the form of steam or with water as medium.

2.   What elements compose a geothermal system?

A geothermal system can be likened to a covered pot filled with water. When heated, the water in the pot will boil and produce steam.

Four elements compose a geothermal system, namely:

• A heat source which is the magma that comes close to the surface of the earth in volcanic areas;
• A permeable underground reservoir rock which can hold or store water;
• A solid cap rock which maintains pressure and does not allow the heat, water or steam  to escape; and
• Water, which serves as the medium for carrying heat.

3.  What countries now use geothermal energy?

Not all the countries have geothermal energy – only those countries of volcanic origin and are located along the Circum-Pacific Ring of Fire have geothermal energy to tap.

In  1904, Italy became the first country to use geothermal energy to generate power. This geothermal field at Larderello is still operating and is a favorite tourist attraction.

With the onset of the oil crisis of 1973, countries, including the Philippines, resorted to utilizing indigenous sources of energy like geothermal energy.

The Philippines currently ranks # 2 in the world in terms of installed geothermal capacity while the United States ranks as # 1.

4.  Where does the water that turns into steam come from?

Rainwater or “meteoric water” that fall on a forest or watershed often follows the roots of the trees and seeps down the cracks and fissures of the earth to the underground reservoirs.

Where can I buy the EDC stock?  Can I buy directly from the Company?

The EDC stock can be traded (buy and sell) only in the Philippine Stock Exchange (PSE) through the PSE stock brokers.  You have to open an account with any of the PSE’s active trading participants to be able to trade.  A list of the active trading participants (stock brokers) together with their contact details is posted in the PSE website www.pse.com.ph.

Dividend Policy

The Company’s Board of Directors is authorized to declare dividends as long as the Company has unrestricted retained earnings.  Moreover, in the case of stock dividends, stockholders representing at least two-thirds of the Company’s outstanding capital stock must approve the stock dividend declaration.

Holders of common shares are entitled to receive annual cash dividends of at least 30% of the prior year’s recurring net income based on the recommendation of the Board of Directors.  Such recommendation will take into consideration factors such as current and prospective debt service requirements and loan covenants, the implementation of business plans, operating expenses, budgets, funding for new investments and acquisitions, appropriate reserves, and working capital, among others.