First Gen’s LNG and Hydro Push Offset Geothermal Drop in 2024 Earnings

First Gen Corporation, the Lopez Group’s clean energy provider, reported a 12% decrease in its attributable recurring net income for 2024, falling to USD 245 million from USD 277 million in 2023. Despite a tough year for its geothermal business, the company’s growing reliance on natural gas and a new hydroelectric asset kept revenues nearly steady at USD 2.408 million, down just 3% from USD 2.475 million the previous year.

The natural gas portfolio, making up 65% of revenues, saw recurring earnings rise 12% to USD 187 million from USD 166 million, driven by the 1,000 MW Santa Rita and 500 MW San Lorenzo power plants. The newly acquired 165MW Casecnan Hydroelectric Power Plant, purchased in February 2024, added USD 16 million to the hydro unit’s USD 19 million earnings. 

“Following the turnover, the hydro plant started to serve First Gen’s portfolio of customers last June, aside from selling to the spot market,” said First Gen President and COO Francis Giles B. Puno.

However, the geothermal arm, Energy Development Corporation (EDC), struggled, with recurring income dropping 36% to USD 75 million from USD 119 million, hit by lower sales and higher costs from drilling and maintenance. The company also faced increased interest expenses after taking a PHP 20 billion loan for Casecnan.

Looking ahead, First Gen is doubling down on its diverse energy mix. “First Gen is forging ahead on many fronts to crystallize the uniqueness and value of our clean and renewable portfolio. We are committed to find solutions to help address the country’s critical issue of energy security,” Puno stated. 

With a seventh LNG cargo on the way and summer demand nearing, the focus is on gas. “We expect LNG supply deliveries in April and May to address the increased electricity demand during the hot summer months,” he added. Yet, uncertainty lingers: “We are reviewing our options for the 1,000 MW Santa Rita power purchase agreement which expires in August.”

This shift toward LNG and hydro as geothermal falters highlights First Gen’s strategy to adapt and grow toward its 13,000MW target by 2030. What’s your take on this pivot? Join the discussion below and let’s talk about the future of energy in the Philippines!