The Philippines turned to geothermal energy in the 1970s out of necessity. Unlike many of its neighbours, the country had little coal or gas to rely on during the global oil crisis. Forced to confront its energy vulnerability early, it turned to a solution unique to its own geography — harnessing heat beneath its own soil.
Five decades later, that bold move is becoming its strategic advantage.
As tensions rise around the Strait of Hormuz, once again exposing the fragility of the global fuel supply chains, geothermal energy — once viewed as complex and risky by many power developers — has now emerged as what is the country’s most valuable clean energy asset: a source of stable, indigenous, 24/7 renewable baseload power.
“Geothermal has always been an underdog technology,” said Francis Giles Puno, reflecting upon the company’s journey navigating one of the world’s largest geothermal portfolios through Energy Development Corporation (EDC), now consolidated under First Gen Geothermal Renewables.
In this exclusive conversation with the Eco-Business Podcast, Puno reflects on the company’s 50-year geothermal journey, the lessons learned from bold bets, and why the next 50 years could be even more transformative.
He also discusses how extreme weather events such as Typhoon Yolanda transformed the company’s thinking around resilience, why geothermal development has strengthened rural economies, and how Indonesia represents the next frontier for Southeast Asia’s geothermal expansion.
Tune in as we talk about:
- Why geothermal was “not for the faint-hearted” in its early years
- The shift from fossil fuel dependence to renewable portfolio strategy
- How extreme weather reshaped infrastructure design
- The global opportunity for geothermal in Indonesia and beyond
- The role of geothermal in supporting AI and data centre development
- Why the transition from “sunset” to “sunrise” industries is critical today
This podcast was edited for brevity.
Please tell us about your journey and EDC’s. From your perspective as a CEO, what does this milestone represent for you, and how does it reflect the Philippines’ leadership in this space?
The Philippines is a country that’s not very wealthy with fossil fuel. We don’t have a lot of coal, nor do we have a lot of gas. So, during the 70s oil crisis, we had to be more innovative and the available resources were geothermal and hydro.
When you look at it today, given the concerns over climate change, I think the Philippines was way ahead of its time because it didn’t have fossil fuels and it had to make do with what was available. Geothermal was there, but the complexity of geothermal really had to be taken into consideration. We didn’t have any know-how. We learned from whoever we could learn from, and we took a lot of risks.
Fifty years later, geothermal is a very well-established technology. Even though we’re 50 years old, the next 50 years will be even more exciting because there’s new technology coming in. You have artificial intelligence (AI) and advanced geothermal systems. So, it’s a big opportunity for a company like First Gen through EDC to step up to the plate and acknowledge the growing appreciation for baseload, 24/7 renewable energy, a uniqueness that geothermal can provide.
In the broader sense, it’s really about creating a unique portfolio of renewable energy sources. We have geothermal, which is a strong foundation. Hydro is also a major platform for us. At some stage, we have the largest wind farm in the north. Solar will continue to grow. We see solar contributing more to the system, especially as cost curves decline.
As a power generation company in the Philippines, we believe we are unique because a significant portion of our portfolio is in renewable energy. Although we grew in the natural gas space and helped government harness what was then the largest investment of its kind, indigenous gas supply is now dwindling.
As a result, we established liquefied natural gas (LNG) import capability. Last year, we decided to sell down a controlling stake to Prime Infrastructure and now retain a 40 per cent stake. That decision allowed us to pivot more of our investable capital toward renewable energy.
Fifty years ago, geothermal development began in response to a looming energy crisis in the Philippines. Today, we are in a similar situation with rising geopolitical tensions and renewed concerns over energy security in light of the US-Iran war. How do you see this in terms of building long-term foundations and assessing alternative energy options?
We’ve been a very strong believer in geothermal. I call geothermal an underdog technology because most power developers would rather focus on conventional energy sources such as natural gas or coal. But because fossil fuels were not a large part of our indigenous resources, we had to develop what we had.
In the Philippines, we have the Electric Power Industry Reform Act (EPIRA), a law passed over 20 years ago that aimed to further privatise the power industry and make it more competitive, giving consumers a choice in where they buy their electricity from.
What we experienced though was challenging. When consumers are given a choice, their first priority is always the cheapest source available, and that remains true till today. However, in a disruptive market like what we have now, that may not be the smartest choice.
Consumers were comfortable for a long time. But when price spikes occur and you face volatility from imported coal and gas, we can demonstrate the benefit of providing fixed rates over a prolonged period for our customers. Even with escalation, it is not exposed to the same level of volatility.
Greater consumer choice also means that they must understand that electricity procurement is not just about price. As we nurture our relationships, we find that it is a journey with our customers. Many tell us that they do not fully understand the pathway to net zero and ask for guidance.
Now the industry is entering a dynamic phase where customer expectations matter more than ever. We must respond to what they need and develop products and services that address those needs, not only from a price perspective, but across the broader factors that now shape energy decisions.
Intuition and bold decision-making have both played important roles in your journey. Reflecting on the three bold lessons you shared in your branding campaign, could you elaborate on what they were and how they shaped your leadership?
The first one is basically on developing geothermal. Once it’s completed, it is fantastic. But stakeholders don’t appreciate what it took you to get there. It requires quite a bit of boldness. It’s not for the faint of heart.
As I said, for a country like the Philippines, it’s necessary for energy security because it is what we have. We’re fortunate to now be in a market where consumers, particularly large corporates, appreciate that they have to monitor their carbon emissions. Buying electricity from renewable sources is part of their criteria when purchasing electricity from the market.
The third one is that when I look at geothermal development, one of its biggest advantages is that it’s a very localised investment. What you really have to do is develop the community around it. I can say, hand on heart, that when you look at every geothermal investment we made, they are usually located in remote areas where there was a small city. Those cities are now larger, more established, and thriving principally because they have access to clean, renewable baseload electricity.
What are the key technical and institutional challenges you faced along the way?
One of the biggest challenges is the exploration phase of geothermal. It’s no different from oil and gas. I always say the advantage of oil and gas is that many players operate a portfolio game. They do exploration and can time their investment when market conditions are favourable. At that stage, they extract fossil fuels from the ground and sell them in the global market.
Geothermal has a constraint. What you’re extracting is steam from the ground. When you extract that steam, you divert it into a steam process, similar to a coal-fired plant. Once used, the waste steam or brine is reinjected back into the system. That’s why geothermal is a strong renewable technology. Whatever waste steam or brine we produce, we reinject into the system so the geothermal reservoir can recharge itself.
Another challenge is that we must protect the surrounding biodiversity and ecosystem, otherwise, the recharge rate of the reservoir would suffer. You need rain, but you also need trees to absorb the rain so the water seeps through and recharges the reservoir.
A major inflection point in your organisation came in 2007 when the company was privatised. How did this shape your thinking around long-term investments, portfolio diversification, and the wider environmental operating conditions ahead?
We saw ourselves as pioneering. When we entered the power generation business, we were responding to a crisis. Our first investment was in an oil-fired plant during the country’s power crisis, under a government contract. Subsequently, natural gas was discovered and needed a market. We stepped up and created power plants and sold electricity under long-term power purchase agreements.
Then came the EPIRA. It envisioned how the industry would evolve from having one or two customers, usually a large or state-owned utility, to suddenly having hundreds of customers. We had to change our mindset that we’re not only selling to that one utility and had to be much more customer-centric. That’s when the idea of creating a portfolio of unique generation assets came into play.
The other major factor was the Paris Agreement. It signalled to us that climate change, especially for a country like the Philippines, was a serious vulnerability. It then translated into hard thinking within the management team about how to direct our retained earnings toward building a portfolio for the future.
When the opportunity came to invest in EDC through privatisation, we felt it as unique because we were in the natural gas space and had tried to expand overseas. But 1,500 megawatts (MW) of gas capacity were negligible internationally.
Geothermal was unique because even then, with just over 1,000MW of capacity, we were already one of the largest operators in the world. It was well positioned. The question was whether we could do more with that capability.
Obviously, there were adjustments, because when you privatise a government company, you have to change the cultural mindset to be more private sector–driven, more efficient, and to look at opportunities not only in the Philippines but also overseas. That was a game- changer for us.
The Philippines is no stranger to natural calamities with an average of 22 typhoons a year. Drawing from EDC’s experience with geothermal, hydro, solar and wind, how do you think system resilience in terms of portfolio diversification and infrastructure engineering that can withstand natural disasters?
One of the things we experienced was damage from very strong winds. When typhoons hit our assets directly, we realised that they were not built the way they should be built today, and they had to withstand much stronger conditions.
The Philippines is always hit by strong typhoons. So, what we had to do was wake up to the fact that when we rebuild and repair, we had to build for current conditions, or even stronger wind factors. And that’s what we did. The benefit was that we originally had to claim insurance for the damage, as well as lost revenue. We were not very popular with the insurance market, but our message to them was that we were going to build better and build stronger.
I was given a report from our team who said that in the last few years, EDC has not had any claims from natural calamities. So, we did what we said we were going to do. That does not, however, mean it’s going to be cheaper. It is the reverse. It is more costly as we have to invest in a more robust design.
With the launch of First Gen Renewables Geothermal, a platform dedicated to geothermal, what makes this the right moment to sharpen this focus, and how can enabling technologies like energy storage support its role?
Sometimes it’s just hard lessons that you learn directly. I remember when we closed a contract with a leading multinational and we came to the signing of the customer supply agreement. I had a name card, and there were six of us. Among the six of us, we had four different name cards representing the same company, and some of them were simply based on legal entities.
It was an eye-opening experience for me, and also for the team. It showed that we can’t represent ourselves to our customers this way. That led to a unified branding campaign under the First Gen brand.
Since all our assets are in renewable energy, we can’t assume customers will automatically know us as First Gen. We approach this with humility. We need to earn name recognition and ensure customers associate us with the investments we consciously make in renewable energy. In many ways, we have to start from scratch and build trust with our customers.
Can you tell us about the legacy the company will leave through the lens of the next 50 years?
Right now, we are primarily focused on the Philippine market. But our aspiration from a geothermal perspective is to go overseas. We were fortunate to have a senior representative of our joint venture partner in Indonesia come and celebrate with us.
We aspire to become known globally, not only as a company that does geothermal in the Philippines, but also overseas. Indonesia is currently the second-largest geothermal market in the world. We hope to make a significant impact in developing geothermal there. Choosing a good partner is a prerequisite, and the fact that we have capabilities that we can jointly build on is a formidable combination.
Indonesia has a challenge in that it has a lot of indigenous coal. The challenge is for customers to move beyond the fact that everything is coal and say they want their power to come from renewable resources.
You can also appreciate that in today’s world, because of AI, there is a massive build-up of data centres. We sell [power] to data centres today, and many of them are sensitive to the need to power their requirements through renewable energy day and night, which is ideal for geothermal. So the whole idea is to develop geothermal to complement the needs of consumers that require round-the-clock renewable energy.
It is not simply solar. What some of our competitors do is sell solar during the day but buy from the market at night. This by definition also means that you’re buying from coal. They then tack on a renewable energy certificate to say it’s all renewable, but it is not.
In practice, it’s more meaningful for our customers to appreciate that what we deliver is, in fact, baseload renewable energy. To the extent that we can expand geothermal development, not only in Indonesia, but maybe in Latin America and other countries, that would be a fantastic legacy to embark on for the next 50 years.
On top of that, science and technology are advancing. It used to be very site-specific, but hopefully there will be technology in the future where you can harness heat from the ground and use that to generate energy for consumers. In that sense, we’re really just scratching the surface. The next 50 years will require boldness, thinking with innovation, applying engineering solutions, and using AI to map and analyse complex data.
Hopefully, that will allow us to provide customers with all their renewable energy requirements. It doesn’t have to come only from geothermal; it can come from a portfolio of renewable assets, which is what we have today — geothermal, hydro, wind, and solar.
You are at the forefront of skills shortages in the energy transition, particularly in scaling up a renewable energy workforce and moving workers from brown to green sectors. What advice would you give to executives and business leaders who remain sceptical about that transition?
The younger generation cares deeply about the future. They want careers that are mission- and purpose-driven. Many companies now embed that into their business philosophy.
In our case, our mission is to forge collaborative pathways toward a decarbonised and regenerative future. Those words were chosen consciously. Collaboration is essential, and our goal is to move toward a sustainable and decarbonised future. That can only be achieved with the best talent.
Despite global competition for talent, we have been fortunate to attract young graduates who want to learn how to harness renewable energy resources, work in renewable markets, and trade renewable energy. It is more challenging because you operate within constraints, you are committed to trading renewable electricity to customers. But there is significant opportunity.
We have been fortunate to build strong talent density within the organisation. That talent must be developed across technical skills — engineering, economics, finance, marketing, and human resources. We need all forms of talent.
In the Philippines, despite setbacks, we have been able to hire strong talent, including professionals who previously spent much of their careers in oil and gas. Many of them see geothermal as a natural shift. Instead of drilling wells for oil and gas, they drill wells for geothermal steam. You can see their excitement about being part of that transition.
Looking back at the decisions made during the energy crisis and fast-forwarding to today, what advice would you give to regional leaders who are caught between a rock and a hard place, moving away from what they’ve been used to, into something with many unknowns?
It’s clearly not a one-size-fits-all situation. For a country like the Philippines, some stakeholders ask why power is so expensive. I always say you have to compare apples to apples. If you compare the Philippines, which lacks significant indigenous fossil fuel resources, to countries with similarly limited resources, such as Japan or Singapore, our power rates are comparable.
It requires government support. It requires customers to clamour for more sustainable sources of energy. Decarbonisation is a tedious and challenging journey that involves all stakeholders. After all, customers do not want to pay for the most expensive source of electricity, but if alternative sources are available, that helps.
For example, solar and wind are intermittent. The decline in battery costs has been a strong complement to these technologies. We also pivoted investment into large, pumped storage hydro facilities. Pumped storage is effective because it enables more intermittent renewable energy to come online and supports a country like the Philippines in scaling solar and wind.
When wind and solar are available, they supply electricity to customers. When they are not, excess capacity can be used to pump and store energy. That is when pumped storage comes in. It remains part of the renewable energy system.
