Our manufactured capital comprises the physical assets, infrastructure, and equipment that our business segments use for their products and services to create value for their customers. In this section, we discuss performance updates of our business segments in these areas, notably in the production of their goods and services, asset performance, and upcoming projects to build up manufactured capital. For more information on our approach to managing our manufactured capital, details are available in Annex 3 of our 2020 Integrated Report available on our website, www.fphc.com.
Power Generation
The following summarizes the performance of our power assets, along with significant events that transpired throughout 2023:
Overall Net Generation ( ▼ 3.7 % net electricity produced as compared to 2022)
For 2023, there was an overall decrease in net generation across all the power plants. This was brought about collectively by unplanned outages, a shift from the energy market to ancillary services, the expiration of the Ancillary Services Procurement Agreement (ASPA) contract of one of the hydro plants, and low steam availability. The decrease in net generation translates to a decrease in revenue for the power generation business, as compared to the previous year.
Natural Gas ( ▼ 5.2 %)
The natural gas power plants overall produced less power in 2023 than in 2022. This was due to the unplanned outages of Santa Rita and San Lorenzo, wherein certain units or systems needed rectification; and where Avion’s output decreased despite its high availability and reliability mainly due to a shift from the energy market to ancillary services and partly due to lesser opportunities at the WESM as a result of high power reserves of the grid. In contrast, the output of San Gabriel increased compared to the previous year with fewer planned outages and high dispatch rates.
With the continuing depletion of gas supply from the Malampaya Gas Field, the available supply of natural gas was not enough to sustain First Gen’s gas plants. There had been instances in 2023 where the Santa Rita and San Lorenzo plants operated on liquid fuel in its place. Despite this, the power plants managed to maintain operations based on dispatch. In response to the ongoing decline of Malampaya gas supply, First Gen’s gas plants commenced with being commissioned to run on liquefied natural gas (LNG). Two LNG deliveries were received within the year for their commissioning to use regasified LNG.
Looking at the long-term, First Gen has completed negotiations of the lease agreement with Prime Infra for a 15-year lease of the First Gen LNG storage and regasification terminal in Batangas. This will aid Prime Infra’s gas aggregation business plan and is seen to ensure fuel supply for the gas plants.
First Gen also has ongoing discussions with their Operations and Maintenance Contractor on how to extend the life of the Santa Rita and San Lorenzo power plants for another 10 years.
Hydro ( ▼ 16.0 %)
Among the hydro units, the Pantabangan-Masiway complex had significantly less power output in 2023 than in 2022 due to the expiration of FG Hydro’s ASPA contract with NGCP in March 2023. FG Hydro could not re-apply for ASPA for Regulating, Contingency, and Dispatchable Reserve services as generators were required to offer a continual supply throughout the contract period, which it could not provide due to the seasonal nature of hydropower. FG Hydro will be looking to offer its ancillary services in 2024 once more, when the Reserve Market commences operations in the first quarter of 2024.
First Gen’s other hydro unit, Agusan, was able to sustain its power supply. FG Bukidnon in 2023 was able to obtain approval to be a WESM Direct Member and Trading Participant.
Geothermal ( ▼ 0.8 %)
Steam production across the geothermal assets slightly decreased between 2023 and 2022. There was a significant decrease in generation from the Unified Leyte plant due to unplanned outages, extended preventive maintenance, fluid collection and reinjection system activities, as well as having limited steam availability and power plant derations all in 2023.
The decrease in generation by the Leyte plant was balanced out by increases in generation from other plants. EDC’s other geothermal plants were able to generate more electricity due to higher steam availability and the optimization of outage schedules.
Wind ( ▲ 16.9 %)
First Gen was able to generate more wind power in 2023 as the Burgos site was affected by stronger winds from Low-Pressure Areas in January and November, Typhoon Betty (International Name, Mawar) in May, and Typhoon Egay (International Name, Doksuri) in July. Typhoon Egay’s strong winds, however, also caused outages in five wind turbine generators. Additional spare parts needed to be sourced from overseas, and the outage had an estimated loss of 12.6 GWh. But with careful planning, the spare parts were procured and completed before the year ended. Turbines were bought online from August through to November, with full operations restored by the second week of November.
Apart from the above repair activities, the wind and solar site in Burgos also spent 2023 completing various maintenance and natural catastrophe preparation work. This included the installation of the Burgos NatCat (Natural Catastrophe) Camera for monitoring switchyard equipment during extreme weather conditions, the construction of stone masonry walls and canal walls to prevent the risk of soil erosion, and the installation of line reclosers which protect the outside system of the Burgos Solar Facility from internally caused outages.
Status of On-going and Upcoming Projects
Interim Offshore LNG Terminal
In March 2023, the project received a declaration of Practical Completion pursuant to the Philippine Downstream Natural Gas Regulation (PDNGR). For the rest of the year, the project achieved the following:
- Delivery and acceptance of four tugs boats, and start of provision of towage services;
- The Floating Storage and Regasification Unit (FSRU) BW Batangas was delivered and berthed at the Multi-Purpose Jetty (MPJ);
- Completion of commissioning at the MPJ of the FSRU and successful send-out of regasified LNG to the FGEN gas power plants; and
- Receipt of two LNG cargos by the FSRU
Santa Maria Power Plant (1260 MW)
First Gen has ongoing permitting activities and contractor selection processes for the development of the plant. In addition, the site preparation works are being completed as part of the initial construction phase.
Casecnan Hydroelectric Power Plant Acquisition
In May 2023, First Gen, acting through its wholly-owned subsidiary Fresh River Lakes Corp. (FRLC), emerged as the successful highest bidder in the privatization of the 165 MW Casecnan Hydro Electric Power Plant in Pantabangan, Nueva Ecija. The Notice of Award was officially conferred upon FRLC on May 26, 2023.
The Pantabangan-Masiway reservoir sources 40 percent of its water from the Casecnan transbasin project and as such, there is an additional incentive for First Gen to preserve or improve the water flows into the Pantabangan reservoir. The water flow seasonality of Casecnan is also complementary to Pantabangan-Masiway in such a way that peak water flows of Casecnan are usually in the wet months while Pantabangan-Masiway’s are in the dry months. This allows First Gen to contract on a portfolio basis, minimizing replacement power costs from the market.
Aya Pumped Storage Hydro Power Project (100 MW to 120 MW)
The 100 MW to 120 MW Aya Project is targeted for implementation by the second half of 2024. The detailed engineering design of the civil, hydromechanical, and electromechanical works is ongoing and most of the permits and endorsements have been secured.
Bubunawan (32 MW), San Isidro (49 MW), Puyo (30 MW), and Tagologan (33 MW) Projects
In these projects, First Gen continues to make progress in the pre-development activities. These hydro projects in Mindanao will capitalize on opportunities within the renewable energy sector.
Palayan Binary Project (28.9 MW)
As of December 2023, the geothermal Palayan Binary Project was at 90 percent completion and beginning testing and commissioning. The first grid synchronization was achieved on January 12, 2024.
Tanawon Geothermal Power Plant (20 MW)
The Tanawon Geothermal Power Plant was deemed 54 percent complete as of the end of 2023. In December, the manpower at the site peaked at 1,373 personnel. Several key equipment have already been delivered on-site.
Mahanagdong Geothermal Brine Optimization Plant (28 MW)
All construction contracts have been awarded and executed, with site construction beginning in March 2023. Foundation piling works were completed in November. By the end of the year, the project has achieved 47.8 percent completion.
Battery Energy Storage Systems (BESS) Projects
Three BESS projects within the geothermal sites are ongoing construction. These are the Tongonan BESS, Southern Negros BESS, and BacMan BESS.
Energy Solutions
In 2023, First Philec delivered 1,736,776 kVa to its customers with 22,744 units sold. It also produced a total of 1,724,742 kVa in transformers within the year.
First Philec maintains a robust production momentum capable of producing at least 2,500 units per month. Its healthy order pipeline positions it well for a strong start in 2024, a testament to the efforts of its Sales team. As of the end of 2023, First Philec recorded a total of carry-over orders amounting to over PHP5 million.
FPI’s efficient production line was supported by several equipment upgrades on the production floor designed to minimize its carbon footprint. Specifically, electric-powered forklifts and adhesive machines now use paper instead of the usual plastic tape.
New products and innovations
In 2023, First Philec launched the following:
- Smart Meters, or Advanced Metering Infrastructure. These products have been accredited by the Energy Regulatory Commission and First Philec is looking forward to participating in bids requiring such products.
- Introduction of its surge arresters into the market.
- Further investments in several equipment that can better support its growing US export endeavors.
Additionally, First Philec has officially entered into partnership with NASCENT for its battery storage initiatives and work on developing EV charging stations. In 2023, the focus of FPI is on research and development, with the ultimate goal of FPI having its own NA-ion battery cell by 2025.
At present, First Philec has achieved milestones in battery and energy storage, progressing through the design phase of their 5 kWh pole-mounted energy storage system (ESS). Simultaneously, they are in the process of acquiring lithium carbon battery samples.
Residential and Commercial Real Estate
Properties under development
In 2023, Rockwell Land launched three residential developments. These are the two horizontal projects: Rockwell South Carmelray in Laguna and Terreno South Phase 5 in Batangas; and Lincoln at IPI which is the first tower of mixed-used JV development in Cebu.
Three projects were also completed in the year: East Bay – Fordham in Muntinlupa, The Arton – West in Quezon City, and Vantage East in Pasig City.
Preparing for 2024, Rockwell Land will be launching several projects, notably:
- Rockwell Center Bacolod Commercial Lots, Bacolod
- Rockwell South Cluster 6, Laguna
- Nara Lots Phase 2, Bacolod
- Bel Air Phase 2, Bacolod
- Horizon Bulacan, Bulacan
- General Milling Corp., Batangas
- El Madero, Laguna
These bring Rockwell to 30 currently operational projects, four of which with components still under development, and nine new upcoming projects.
Industrial Real Estate
As of Dec 2023, First Philippine Industrial Park, Inc.’s (FPIP) total Ready-Built Factory (RBF) area of 184,529 sq.m. was leased at an occupancy rate of 80 percent. This is higher than 2022’s occupancy rate of 76 percent.
FPIP continues to improve its facilities within the park to better cater to the FPIP community. In 2023, the following projects were completed:
- Consuelo Park Residences Phase 2. FPIP’s dormitory available for those working within the park, the Consuelo Park Residences increased its capacity from 36 units in 2022 to a total of 95 units in 2023.
- Civil construction of the FPIP Access Management (FAM) system in all park gates. This improves security within the park.
- SCADA Control Room at Pumping Station 2. This improves FPIP’s water and wastewater services to the locators.
- Design and construction of the Consuelo Park Pavilion. The pavilion provides a space for events, increasing the number of services to locators, and promoting work-life balance.
The following improvements are still ongoing:
- Configuration and commencement of operation of the FAM system.
- CCTV Live Feed Project. This involves the installation of CCTVs to view the traffic condition of the Maharlika Highway, to better inform traffic management in the park.
- Installation of speed cameras in the park, for better implementation of traffic regulations and mitigation of vehicular incidents.
- Service Support Building renovation to improve facilities and services to stakeholders.
Construction and Energy Services
Completed and ongoing construction projects
The following are the accomplished projects of the First Balfour construction group as of the end of 2023.
T1 Rentals
The rentals business of First Balfour continues to grow, exhibiting a growth rate of 28 percent from 2020 to 2023. It currently stands with 893 units of construction equipment and vehicles.
T1 Rentals expanded its nationwide footprint with the opening of its Clark Yard located within Clark Global City to support the infrastructure development in Central Luzon, particularly by providing equipment rental services to North Commuter Railway projects. T1 Rentals has a total of 33,246 sq.m. of equipment yard area in six locations across the country.
T1 Rentals has also purchased several Euro 4 vehicles and Euro 5 heavy trucks in 2023. This includes:
- 17 vans (12-seater)
- Nine buses (30-seater)
- Five 20cbm dump trucks
The procurement of equipment will continue on to 2024, with plans to acquire 60-seater buses and more dump trucks, as well as solar tower lights for its facilities.
T1 Transport
First Balfour’s T1 Transport currently has 39 tractor heads, 50 trailers, three boom trucks, nine service vehicles, and three electric buses.
In October 2023, the Electric Vehicle (EV) transport division was awarded by Cebu Pacific to provide EV airport buses to transport its passengers to and from the boarding gate and the aircraft within the airport. T1 Transport is also finalizing a memorandum of agreement with Maersk Logistics to provide trucking services for their logistics operations with regards to container transport.
ThermaPrime
ThermaPrime had its two rigs undergo inspection and recertification in 2023. Rig 1 underwent the recertification process for the majority of the year and was declared fit for purpose in October 2023. Rig 2 completed its contract with ThermaPrime’s most recent client in September 2023, after which it then underwent the same certification process as Rig 1. Rig 1 is scheduled to resume operations by February 2024. The rig inspection and recertification activities ensure that all rigs operate efficiently and safely without causing harm and risk to people and the environment.
Effectively, ThermaPrime had only one rig in operation throughout 2023. This reflects a bottom line loss for the drilling business of First Balfour. It also presents in the other ESG data in the following sections as a decrease in activity between 2022 and 2023.
Throughout the year, ThermaPrime initiated purchase agreements to acquire two additional rigs by 2024. The first rig is estimated to be completed by January 2024 while the second rig is undergoing refurbishment and recertification activities. Investments in additional rigs is a strategic initiative for ThermaPrime to aid its customers in delivering their geothermal energy supply commitments.
Health and Education Services
As of 2023, the Asian Eye Institute, across Metro Manila, has three surgical centers, four satellite clinics, and one optical shop. Through these sites, AEI was able to cater to a total of 200,000 patients.
For the optimum service to its patients, Asian Eye carefully maintains its medical and surgical equipment. AEI has a Technical Services Team to monitor equipment health and to conduct preventive maintenance and calibration on a regular basis. AEI is also set to procure new equipment to replace older models in the upcoming years.
For 2024, AEI will launch an ambulatory surgical center in its clinic in Trinoma, Quezon City; improve its facilities at the Rockwell Phinma clinic; and establish a Myopia Center to provide comprehensive treatments for myopia management and control.
Power Generation Segment
- Decrease in electricity produced between 2022 and 2023
- Completed negotiations with Prime Infra to lease LNG storage and regasification terminal in Batangas, seen to ensure fuel supply of the gas plants.
- FG Hydro expiration of ASPA in 2023, to re-apply again in 2024.
- Various upcoming projects in natural gas, hydro, geothermal, and battery storage.
Energy Solutions Segment
- Steady production of transformers with at least 2,500 units per month.
- Over PHP5 Million carryover orders for 2024.
- Launch of advanced metering infrastructure and introduction of surge arresters in its market
- Official partnership with NASCENT to develop battery storage solutions.
Commercial and Residential Real Estate Segment
- Three new projects launched in 2023 and seven to be launched in 2024
- 94 percent occupancy rate of office and retail properties
Industrial Real Estate Segment
- Ready-Built Factory occupancy rate of 80 percent in 2023
- Various facility improvements
Construction and Energy Services Segment
- Significant growth of the T1 Rentals business with new equipment and new yard in Clark Global City
- Two new partners under First Balfour’s T1 Transport business
Health and Education Services Segment
- Able to serve 200,000 patients in 2023
- Plans to expand facilities in 2024
- Majority of the business segments of FPH maintained their manufactured capital in 2023, with the exception of First Balfour whose T1 Rentals business had significant growth and Rockwell Land with several properties beginning operations within the year. Other businesses, especially the power generation businesses and also Rockwell Land, have numerous upcoming projects in development. This will create great growth for their manufactured capital in the future.
- The decrease in electricity produced by the power generation business translated to a slight decrease in their revenue, whereas the launch of various new properties in our real estate business brought in a good increase in revenue.
