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Did you know that our collective
daily activities dictate power
demand, depending on our
consumption of electricity? The
different types of power demand
are baseload, intermediate, and
peaking. Energy sources such as
hydro, geothermal, solar, natural
gas, oil, and coal are used to
address these varying types of
power demand.

AboitizPower generates and
supplies power from a right mix
of renewable and non-renewable
energy sources to meet the
different power demand types.

Together with partners,
AboitizPower currently generates a
net sellable capacity of 3,350 MW
and will continue to explore and
build new power plants across the
country to meet growing demand.

Find out how AboitizPower helps in
responsibly sustaining the country
with reliable and reasonably priced                           
power throughout the day.











 



Baseload demand
It is the minimum level of electricity demand required on a continuous
basis within a span of 24 hours. It is used to power industrial processes
and essential services such as hospitals and traffic lights. Baseload plants
operate continuously to produce the most reliable and cost-efficient power
at all times. Ideal baseload plants are coal, geothermal, nuclear, and natural
gas facilities.

AboitizPower provides reasonably priced and reliable power through its
coal-fired plants operated by Therma Luzon, Inc. in Pagbilao, Quezon and
Therma South, Inc. at the border of Davao City and Davao del Sur, and
via the geothermal facilities of AP Renewables Inc. in Albay, Laguna
and Batangas.
 

Intermediate demand
It is the varying level of demand during the course of a
day that ranges between baseload and peak demands.
Intermediate plants are efficient in filling the gap
between these two types of demands because of their
operational flexibility and these too are cheaper than
peaking plants. Hydro plants and combined-cycle natural
gas plants are ideal for the intermediate demand.

Hedcor’s run-of-river hydro plants located in Benguet,
Ilocos Sur, Mountain Province, Davao City and Davao del
Sur provide reliable intermediate power by harnessing
the potential energy of river water.
                                                                                                           





 

Peaking demand
It is the maximum load of electricity demand during a specified period of
time. During tight supply situations, peaking plants boost power supply
to meet high-energy consumption demand. These plants are the most
flexible, thus are on standby to provide additional power whenever
needed. However, these plants are expensive to operate due to their fuel
cost. Oil-fired, some hydro plants, and solar plants are ideal to supply the
peak requirements of the grid.

SN Aboitiz Power’s large hydro plants located in the Ambuklao and Binga
Dams in Benguet, and the Magat Dam in Isabela are mostly used to boost
additional power from the water reservoirs.

AboitizPower’s oil-fired barges operated by Therma Mobile, Inc. in
Navotas, Metro Manila, and Therma Marine, Inc. in Nasipit, Agusan del
Norte and Maco, Compostela Valley and solar power plant operated
by San Carlos Sun Power, Inc. in San Carlos City, Negros Occidental can
provide the country with extra power supply whenever needed.

 


 
Results of Operations

AboitizPower recorded a consolidated net income of P17.6 billion in 2015, a 5% increase from P16.7 billion in 2014. This translated to an earnings per share of P2.39 compared to P2.27 in 2014. Core net income for 2015 amounted to P18.4 billion, up by 9% from the previous year.

Power Generation


The Power Generation Business Group accounted for
79% of earnings contributions from AboitizPower’s
business segments, recording an income share of
P13.9 billion for 2015, up by 3% from P13.5 billion in
the prior year. The increase is mainly attributed to the
higher net sales volumes from the coal and large hydro
business units (BUs) despite the decrease in revenues
from the geothermal BU due to a steam decline.
The coal plants generally performed well because of
lesser forced outages at the Pagbilao plant and the
commerical operations of unit 1 of Therma South’s
300-MW Davao plant in September 2015. Moreover,
the impact of the income tax holiday expiration on the
Magat, Binga, Mobile 1, and Mobile 2 plants was offset
by the lower financing cost of the large hydro BUs and
the lower operating expenses of the oil BUs.

Attributable net energy sold rose by 11% from 11,272
gigawatt hours (GWh) in 2014 to 12,550 GWh in
2015, as energy delivered through bilateral contracts
expanded by 18% to 11,383 GWh. Bilateral Contracts
Quantity (BCQ) comprised 91% of the Group’s sales
while spot market sales decreased by 28% from 1,612
GWh to 1,168 GWh. Despite the growth in energy
sales, the Group’s revenues went down slightly by 1%
to P57.8 billion because of lower average selling prices.

Higher energy sales and ancillary services increased
capacity sales by 6%, resulting to net attributable
sales of 1,900 MW. The growth was driven by the new
capacities that came in 2015, namely Hedcor’s 14-MW
Sabangan hydro plant and Therma South’s Davao
plant, along with higher ancillary revenues of the large
hydro BUs and the higher dispatch of the oil plants.                   
 

Geothermal
Revenues from the Tiwi and MakBan geothermal
plants decreased by 14% to P10.7 billion in 2015
largely due to lower steam flow, which translated to a
5% decline in attributable energy sold amounting to
2,643 GWh. Correspondingly, capacity sold factor went
down to 75.4%. BCQ selling prices decreased due to
lower indices and spot market prices were also lower.
Both contributed to the decline in revenues.
Meanwhile, the exploration of potential steam wells in
Negron Cuadrado and Mt. Apo areas is ongoing.

Large Hydro
Attributable volume sold from the large hydro plants of
SN Aboitiz Power (SNAP) rose by 22% to 2,012 GWh due
to higher ancillary services, while capacity sold factor
was at 78% in 2015. Consequently, revenues increased
by 2% year-on-year to P6.4 billion due to higher sales at
the spot market and ancillary service revenues.
In April 2015, SNAP-Benguet received from the Energy
Regulatory Commission a copy of the amended
Certificate of Compliance (COC) for the Binga plant.
The COC reflects the increase of the plant’s capacity
from 125.8 MW to 140 MW, following uprating work
done from December 2014 to February 2015.
SNAP-Magat started the construction of the 8.5-MW
hydro plant along the Maris Main (South) Canal
in Ramon, Isabela after signing a Memorandum
of Agreement with the National Irrigation
Administration. The project is expected to be
completed in November 2017.

 
 


 

SNAP also completed its pre-feasibility study of the
350-MW hydro complex project in Ifugao and received
a conditional water permit from the National Water
Resources Board. SNAP aims to secure compliance
requirements for the project in order to proceed with
the construction in 2016.

Run-of-River Hydro
Attributable energy sold from the Group’s run-of-river
hydro plants slightly dropped by about 1% to 686 GWh
year-on-year, brought on by lower water levels across
all plants. However, the entry of Hedcor’s Sabangan
plant in 2015 partially offset the lower generation from
the other plants. Capacity sold factor in 2015 was at
44%. Total revenues amounted to P3.2 billion, up by
4% from the previous year due to the Feed-in-Tariff
(FIT) rates of the Sabangan and Tudaya plants.

In 2015, the Group started commercial operations of
the Hedcor Sabangan’s 14-MW plant, AboitizPower’s
first venture in Mountain Province. The hydro
plant, which began construction in May 2013, was
completed on time and inaugurated in May 2015.
AboitizPower continues to expand its capacity as it
commenced the construction of Hedcor Bukidnon’s
68-MW Manolo Fortich plant in April 2015. The plant
is expected to go online in 2017 to augment the
power supply in the Mindanao region                                        
 

The Group has identified several locations across the
archipelago with a potential capacity of 200 MW for
new run-of-river hydro plants. One of these is for a
possible 45-MW plant in Kabayan, Benguet which is
currently on its pre-development stage.

Coal
Revenues from the Group’s coal plants are higher by
10% at P26.0 billion, mainly driven by the increased
generation from the plants and the contributions from
Therma South’s Davao plant that began operations in
September 2015. Attributable energy sold was 6,580
GWh, a 19% increase from 2014, while capacity sold
factor rose to 95%, up by 2% year-on-year.

When the first unit of Therma South’s 300-MW Davao plant
went online, it provided 130 MW (net) of much-needed
power to the Mindanao Grid. Commissioning activities
for the second unit were done in the last quarter
of 2015 and full commercial operations began in
February 2016.

The construction of the 340-MW Therma Visayas
and 420-MW Pagbilao III baseload plants are
ongoing and on-track for completion in 2017. RP
Energy’s 600-MW plant in Subic is also undergoing
pre-construction works
Oil
The full-year effect of the increase in Therma Mobile’s
plant capacity to 200 MW improved the energy sold
by the oil BUs to 1,854 GWh, 23% higher from the
previous year. This led to a capacity sold factor of
97%. With cost of fuel as a pass-through in its supply
contracts, the decline in fuel prices resulted to a 12%
decrease in revenues amounting to P11.4 billion.
the construction in 2016.

Solar
In the second half of 2015, San Carlos Sun Power, Inc.
(SacaSun) began building the 59-MWp solar power plant
project in San Carlos City, Negros Occidental. SacaSun
is the joint venture company between SunEdison and
Aboitiz Renewables, Inc., the holding company of
AboitizPower’s investments in renewable energy.
The SacaSun plant is the first solar project of
AboitizPower and also its first venture in the Negros
Island Region. It was completed and went online in
March 2016 to provide additional power supply to
the Visayas grid.

Staying Ahead of the Game
As part of its growth strategy, AboitizPower has started
investing in power projects outside the Philippines,
particularly in Southeast Asia. In September 2015,
it entered into an agreement with PT Medco Power
Indonesia to participate in the exploration and
development of a potential 2x55-MW greenfield
geothermal plant in East Java Province, Indonesia.
AboitizPower also entered into an agreement with SN
Power AS and PT Energi Infranusantara to participate
in feasibility studies for the exploration and the
development of a potential 127-MW hydro plant project
along the Lariang River in Central Sulawesi, Indonesia.
The project company PT Auriga Energi was awarded the
basic license to develop the said project and has been
conducting pre-feasibility studies since September 2015.
The Group ensures that all its programs and tools are
efficiently used to drive operational excellence and
maximize the availability of its plants.

• Integral to the operations of AboitizPower’s
generation facilities are the Group’s Asset
Management and Safety, Health, Environment
and Quality (SHEQ) programs. In 2015, the Group
implemented these programs to achieve world-
class operations across all its BUs.



 
• The Group pursued various certification initiatives
for all its operating facilities, specifically Quality
Management Systems (QMS 9001), Environment
Management Systems (EMS 14001), and
Occupational Health & Safety Systems (OHSAS
18001). By yearend 2015, 85% of its facilities were
certified with at least one international standard
certificate.
• The Group aligned its Asset Management plans
to ISO 55001 with the goal to optimize operating
costs. It also built its Reliability-Centered
Maintenance Practices, and continuously
monitors, reports and compares reliability key
performance indicators against set targets
and industry benchmarks. To ensure reliable
operations, the Group has established standard
practices and procedures to mitigate asset risks
such as natural calamities that could affect the
availability of the plants.
Together with its partners, AboitizPower remains on
target to expand its capacity to 4,000 MW by 2020.
The company is committed to grow and diversify
its portfolio and will continue to be a responsible
operator of all its generating facilities.

2016 Update: Biomass
In early April 2016, Aboitiz Renewables, Inc.
acquired the Aseagas Corporation (Aseagas)
after the sale of all its equity interest was
approved by Aboitiz Equity Ventures, Inc. (AEV)
Board of Directors. The sale is subject to closing
conditions and further approvals.

Aseagas was established to build plants
that would produce renewable energy from
organic waste. It will be the newest addition to
AboitizPower’s renewable energy business. The
company is currently building an 8.8-MW biogas
plant in Lian, Batangas, which is expected to be
commissioned by the third quarter of 2016.

The plant, which uses the waste-to-electricity
process that harnesses organic waste to produce
electricity, is a recipient of Clean Development
Mechanism (CDM) credits from its reduced
carbon emission. Aseagas has already finalized
the offtake agreements for the plant and is keen
to build new sites that use various sources of
waste streams as feedstock.

 
Generation Companies Overview*

AboitizPower’s portfolio of generation assets accounts for 16% of the country’s installed generation capacity.
 

 
Power Distribution

The AboitizPower Distribution Business Group’s
revenues in 2015 increased by 5% to P33.7 billion
from P32.3 billion in 2014. The higher income
contribution is mainly attributable to an increase in
energy sold for the period driven by LiMA EnerZone’s
full-year contribution and Subic EnerZone’s 12%
sales growth due to higher consumption of its major
shipbuilding customer. The other distribution utilities
also experienced an increase in energy sales from
the previous year with Cotabato Light up by 10%,
 


Davao Light by 4%, and both VECO and SFELAPCO
by 2%. The Group’s income share increased by 19%
to P3.8 billion in 2015, representing a 21% earnings
contribution to AboitizPower’s business segments.
For the Group’s customer segments, energy sales
to residential customers increased by 6% for a total
of 1,186 GWh. Sales to industrial and commercial
customers both increased by 6% to 2,936 GWh
and 578 GWh, respectively. Customer base grew

 

by 5% with 881,944 customers served in 2015.                      
Consequently, peak demand increased by 3% year-
on-year to 1,138 MW.

The biggest challenge for the Group in 2015 was the
persistent power supply shortfall in the Mindanao
Grid. The tight supply situation was due to lower
generation coming from the Agus and Pulangi plants
and the emergency downtime of STEAG State’s
210-MW baseload plant in Misamis Oriental. This
was further aggravated by incidents of transmission
line bombings. These factors led to rotating power
outages in Davao and Cotabato. However, efforts
were made to minimize the power interruptions
by implementing the Interruptible Load Program
(ILP), where participating large customers were
encouraged to run their own generator sets for a
certain period of time to reduce the power demand
in the area. VECO first developed the ILP concept in
2010 and it is now replicated as a mitigation model
for power supply shortage situations in the country.
Towards the end of 2015, additional supply came in
with the commercial operations of Therma South’s
first unit in Davao.

In 2015, the Group invested in various projects
to further improve the reliability of its networks,
increase distribution capacity, reduce systems
losses, and enhance overall customer service.
Davao Light added a 79-MVA transformer to its
network and LiMA EnerZone also installed an
additional 50-MVA transformer. Both transformers
are set to energize their respective franchise areas
in early 2016.

In response to a Davao City ordinance that aims to
declutter the city’s visual landscape, Davao Light
started replacing overhead power lines in 2015 with
its own Underground Distribution System (UDS),
which was first implemented by VECO in Cebu
during the previous year.
All of the distribution utilities registered systems
losses below the 8.5% government-mandated cap.
Most of them also succeeded in further reducing
their systems losses year-on-year; this results to
 


savings that directly benefit customers through
reduced power costs.

Process improvements were also done to enhance
the group’s service delivery performance. On an
average, the distribution utilities are able to connect
50% of new customer applications within the same
day, and 100% of these applications within 24 hours.
Seventy percent of emergency calls also receive a
response within 30 minutes.

VECO’s new Meter Data Management (MDM) system
went live to complement its upgraded Customer Care
and Billing solution and in preparation for the MDM
requirements of Open Access and the smart prepaid
 
offering. The MDM is critical to the Group’s goal to
install more smart meters in the medium to long
term. Moreover, the new Google-based geographic
information system (GIS) has been rolled out to
replace the old and outdated in-house GIS system.

Modernizing the Distribution Infrastructure
For 2016, the short-term challenge that the Group faces is
the continued tight supply situation in Mindanao, which
is expected to worsen with the El Niño phenomenon
further pushing up demand. Davao Light is ensuring
reliable power supply by entering into supply contracts for
50 MW with Therma South, 18 MW from Alsons’ Western
Mindanao Power Corporation and Southern Philippines
Power Corporation, and additional capacities from the
300-MW plant being built by San Miguel Corporation in
Davao del Sur.

To ensure that quality and reliable power is delivered
to customers, the distribution utilities prepare for
future demand by upgrading its subtransmission and
distribution networks for more robust and flexible
systems. In 2016, the Group plans to add 133 MVA of
additional capacity in Davao, 99 MVA in Cebu, and 50
MVA in LiMA EnerZone.

The UDS in both Davao and Cebu will be upgraded







 
annually to enhance the power reliability and livability
of these high-growth areas. In addition, a more
extensive use of the Tree Wire will be deployed in
urban areas to improve safety and reduce outages.
Cotabato Light will continue to further improve its
network backbone to improve reliability.

The Group also intends to install more smart elevated
meter clusters in areas of concentrated high losses. This
smart meter system, the first of its kind in the country, is
designed to improve operating parameters and enable
remote service connection and disconnection.

A new self-service system will be rolled out to the
Group’s customers, allowing them to do online
transactions and have access to real-time information
via mobile devices and the Web. The Group’s mobile
app will also go live in the first quarter of 2016 to
enable customer inquiry on billing and other service
needs via smartphones.

It has been observed that historically, power demand
rises during an election year so energy sales is
expected to increase in 2016. Consequently, the huge
responsibility of ensuring stable and adequate supply
during this period is the Group’s priority for the year.

Overall, the Distribution Business Group will
pursue its modernization plans to provide
more innovative services to enable the delivery
of reliable and reasonably priced power
to its customers.