2020 Integrated Report

Manufactured Capital

Strengthening Our Manufactured Capital for Optimal Performance

EDC’s manufactured capital is primarily composed of our geothermal steam fields and power plants. The physical, material, and technological inputs related to the maintenance of our steam fields and power plants enable us to generate power in a reliable and resilient manner. For our manufactured capital, we put a premium on ensuring the reliability and resiliency of our steam fields and power plants across the fleet.

Our geothermal steam fields and power plants currently enjoy high reliability and availability. While this performance is already commendable, we can still improve it and make it more consistent by improving equipment reliability and resilience to climate change and geohazards.

Our manufactured capital is primarily composed of the physical assets, infrastructure, and equipment we use to provide products and services to create value for our power customers. As such, EDC’s operations are driven by our geothermal steam fields and power plants, and these assets and facilities make up the bulk of our manufactured capital.

Part of this capital also includes the physical and technological inputs that we use to maintain these critical assets. We manage our manufactured capital through activities geared towards the optimum use and upkeep of our assets to maintain their high quality, efficiency, and resilience. Taken all together, these inputs and activities allow EDC to generate clean and sustainable energy and provide this efficiently and reliably to our customers and other stakeholders.

In terms of our manufactured capital, our main goals are to maximize power generation given our available resources and to maximize our plant reliability and availability for our power generation service.

To do this, our team remains focused on dealing with equipment issues, addressing any problems, and ensuring a swift return to service of affected facilities. We also undertake timely preventive maintenance for all our generating units to ensure that these are running properly and efficiently.

In light of the frequency and intensity of storms and other natural hazards that affect the Philippines, we continue to invest in a comprehensive resiliency program. Its activities include geohazard and landslide mitigation initiatives, resilience to earthquakes of vulnerable equipment such as cooling towers, and fire control measures. Early warning systems have also been installed to boost preparedness for storms and earthquakes. By bolstering the resilience of our facilities, we seek to prevent prolonged outages and safety incidents that might result from natural disasters.

EDC’s operations rely heavily on harnessing energy from natural resources such as geothermal or steam, water, wind, and sunlight. While this allows for cleaner energy production, this also makes our operations vulnerable to certain natural phenomena, such as geohazards and climate change. As such, part of our risk management strategy is to embed resiliency into our assets.

We developed our Natural Catastrophe Resiliency Program anchored on the principles of the United Nations’ Disaster Risk Management Framework. The program and its accompanying framework allows us to prioritize investments through the value-at-risk (VAR) approach to address our identified top risks related to natural catastrophes. The program is currently focused on mitigating four natural catastrophes, namely, landslides, flash floods, earthquakes, and typhoons.

Additionally, EDC has earmarked PhP700 million to further enhance resiliency and future-proof its assets.

Our geothermal steam fields and power plants currently enjoy high reliability and availability.

In support of our strategic objective on operational excellence, EDC embarked on an Asset Management Program in 2019, intended to improve efficiency by simplifying processes and adopting best-in-class standards.

We developed an optimized maintenance program for more than 90,000 assets across our fleet, which cut unnecessary time-based maintenance activities, all while upgrading the asset health monitoring capabilities of our critical equipment. This greatly improved our outage performance and reduced our maintenance costs.

As part of the program, we also implemented a comprehensive IBM Maximo Enterprise Asset Management (EAM) System, which aims to provide a single platform for all our essential operations and maintenance processes. With this, we underscore the importance of system-based asset management to organizations.

“Island Operations” and Resilience Initiatives Pay Off

Our commitment to enhancing resilience and investing in risk mitigation for our facilities delivered good results for us this year. The work we put in to reinforce our BacMan facility against natural hazards was put to the test when Super Typhoon Rolly struck the Bicol region in late October 2020. Indeed, our hard work paid off as, despite the strength of the typhoon, the BacMan facility only sustained minimal damage. Its typhoon-proofed cooling towers and slopes with landslide mitigation measures held up against the storm. As a result, within a week, the BacMan facility was ready and able to restart operations and deliver much-needed electricity to the area’s customers, most of whom were outside the Bicol province.

The main constraint, however, was in the damage sustained outside our facilities. For instance, along the Naga-Tiwi line, 26 electrical towers fell, which effectively cut us off from the grid and left the province of Albay and Sorsogon powerless. Our BacMan team was quick to mount “Island Operations” in response to this situation.

We secured generator sets to provide black-start capabilities and ensured that robust protection systems were in place. This allowed EDC to jumpstart the grid and supply electricity to portions of Albay and Sorsogon in a matter of three days, bringing much-needed relief to communities in these provinces. This was done in collaboration with two local electric cooperatives, even if both of them did not have a power supply agreement with EDC.

Indeed, a regenerative business is committed to elevating the lives of communities and strengthening partnerships. The challenges presented by the typhoon allowed us to act on this commitment. The Tiwi geothermal plant, our neighboring facility, suffered badly from the storm’s effects. Despite being a competitor, we also recognize them as a partner in our mission to bring renewable energy to the country. As such, we provided the neighboring facility a total of 22 fan stacks and 45 fan blades to aid in their recovery and help bring power back to Filipinos in need of help and comfort.

Moving forward, our mission is perfectly clear—we need to focus on increasing our steam supply and lessening our outages. Implementing interventions to protect our existing steam supply and steam infrastructure will be critical. Completing the drilling of six wells during the latter half of 2020 gives us a good springboard to continue our drilling operations in 2021, even amid a still troublesome pandemic.

The go-live of our enterprise asset management (EAM) system, which is now in hypercare, is equally important. Gaining the confidence to use the system, and embedding the processes into our work routine, will be key to reaping the promised benefits of the system and hopefully, contribute to the reduction of our unplanned outages.

Our 2020 Integrated Report

Our Integrated Report tells the story of our efforts to achieve our business objectives, hand-in-hand with our sustainability aspirations.

2020 Integrated Report

2020 Integrated Report

Manufactured Capital

Strengthening Our Manufactured Capital for Optimal Performance

Our 2020 Integrated Report

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