The Integrated Management System (SIG) together with corporate policies provide the underlying guidance for the management of the Company’s manufactured capital and covers five dimensions: quality, environment, occupational health and safety, social responsibility and energy management. In all, 14 of the 29 plants which ENGIE Brasil Energia operates are certified according to NBR ISO 9001 (quality), NBR ISO 14001 (environment) and NBR OHSAS 18001 (Occupational Health and Safety) standards. In 2016, Estreito HPP was certified under these standards, thus increasing the percentage of certified installed capacity from 83.6% to 95.3% – this discounting the non-renewal of Charqueadas TPP’s certification in the light of the closure of plant activities.

The Jorge Lacerda Thermoelectric Complex, which has three plants among the 14 certified, has also certification according to the NBR ISO 50001 standard with respect to Energy Efficiency. The Company seeks to adhere to guidance under the NBR ISO 26000 standard (for which there is no certification) on social responsibility.

Operating performance

ENGIE Brasil Energia considers the reliability, uptime and safety of the generating complex as aspects essential to management of quality. These aspects are measured by the Company through the plant internal uptime indicator, which tracks the energy supply capacity of the installations and the hours of urgent and unscheduled downtime of the generator units.

For the full year 2016, excluding scheduled stoppages, the plants recorded uptime of 97.2%: 98.5% for the hydroelectric plants, 88.4% for the thermoelectric units and 95.9% fired from complementary sources. Consequently, the goal established by the Company for this indicator (≥ 98.7%) was not reached.

If all scheduled stoppages are tabulated, generator uptime was 86.8%: 88.5% for the hydroelectric plants, 75.0% for the thermoelectric units and 87.8% fired from complementary sources. GRI G4-EU30

The key factors which affected hydroelectric uptime in 2016, when compared with the preceding year, were modernization work on the Generator Unit 3 of Ponte de Pedra HPP and on Units 3 and 4 of Salto Santiago HPP. Maintenance activity also took place on Unit 1 of the Passo Fundo HPP and on Units 1 and 2 of São Salvador HPP. Another factor impacting uptime ratios was the modernization of the velocity and voltage regulators on Generator Unit 1 of Cana Brava HPP.

As to the thermoelectric plants, uptime working was most affected by scheduled maintenance on Generator Units 2, 4 and 5 of the Jorge Lacerda Thermoelectric Complex and on Unit 3 of the William Arjona TPP. An additional impact came from the decommissioning of the Charqueadas TPP. In the case of the plants fired from complementary sources, uptime ratios were affected by maintenance on the Unit 3 turbine of the José Gelázio SHP.

In 2016, net electric energy output was 43,521 GWh (4,955 average MW), a year-onyear reduction of 6.3%. Out of total generation, the hydroelectric plants corresponded for 38,078 GWh (4,335 average MW), a 3.2% decrease; the thermoelectric plants for 4,113 GWh (468 average MW), a reduction of 29.3%; and the complementary-powered plants for 1,332 GWh (152 average MW), an increase of 0.5%. GRI G4-EU2

There was no particular event at the hydro plants meriting specific mention other than the less favorable hydrological conditions prevailing in 2016. The decreased generation from thermoelectric sources is due to reduced generation by order of merit and also the temporary shutdown in operations at the William Arjona TPP for reasons of operating convenience and the decommissioning of the Charqueadas TPP, already mentioned.

Generation from complementary plants was virtually stable, the key factor in this case being reduced generation from the SHPs in the light of low rainfall, albeit offset by increased generation from the wind power plants with initial commercial operations at the Santa Mônica and Cacimbas wind farms.

In this context, it is worth pointing out that an increase in the Company’s hydroelectric generation does not necessarily reflect an improvement in economic-financial performance. Conversely, a reduction in this type of generation does not inevitably imply a deterioration in economic-financial performance due to the adoption of the Energy Reallocation Mechanism (MRE), which defrays the risks of hydro generation among its participants. As to the Company’s thermal generation, its increase might reduce (as a function of the Company’s level of contracting) exposure to the Price for the Settlement of Differences (PLD), the opposite being the case when there is a decrease, all other variables being equal.

Remote operations

On October 10, 2016, the Company initiated remote operating at Ponte de Pedra HPP and at the José Gelázio da Rocha and Rondonópolis small hydroelectric power plants. Located in the state of Mato Grosso, these operations are now controlled out of the Generation Operations Center (COG), installed at the Company’s headquarters in Florianópolis (SC).

Projected with a focus on digitization and operating excellence, the infrastructure of the COG incorporates highly sophisticated technological resources allowing real time monitoring and ensuring the reliability of the system. To this end, several adaptations have been made to existing systems, equipment and procedures as well as intensive training of operators, the relative investment amounting to about R$ 4 million. The Company conducted all stages of planning, execution and management of the project with reduced recourse to outside hiring.

It is worth recalling that ENGIE Brasil Energia already has considerable experience in remote operations that had previously been adopted at the Cana Brava (GO) and São Salvador (TO) hydroelectric power plants and controlled from Salto Santiago HPP (PR), as well as Passo Fundo HPP (RS), operated remotely from Itá HPP (SC). In addition, before becoming an integral part of COG, the José Gelázio da Rocha and Rondonópolis small hydroelectric plants, both in the state of Mato Grosso, were controlled remotely from Ponte de Pedra HPP.