Cebu’s surging energy demand, fueled by its robust economic growth, underscores the urgent need for additional power plants—a necessity acknowledged by the Department of Energy (DoE).
Speaking at The Freeman Business Forum’s “Powering Cebu,” which brought together business leaders, government agencies, and stakeholders, DoE Assistant Secretary emphasized, “Sa ngayon… there is no problem with transmission and power supply within the next two years. However, if we want to have a reliable, sufficiently-produced (power), independently for the Visayas, then we have to come up with new generation facility projects.”
Cebu’s economic growth drives power demand
Cebu’s economy experienced a remarkable 7.3% growth rate in 2023, cementing its status as one of the Philippines’ fastest-growing regions.
Highlighting the energy challenges accompanying this expansion, Cebu Governor Gwen Garcia noted, “The power demand of Cebu year-on-year is exceeding the national average. If we are to even be able to match the phenomenal growth that Cebu is experiencing right now, we would have to be very serious about generating more [power] capacity.”
Neil Martin Modina, assistant vice president for system operations at the National Grid Corporation of the Philippines, underscored Cebu’s energy deficit, stating, “The total capacity is only 1,123 [megawatts], but our demand… it’s about 1,223 [megawatts] last May, the peak month of Visayas. If you minus the generation and the demand, we are lacking around 100 megawatts in Cebu.”
Modina explained that the province currently lacks around 100 megawatts during peak times. To avoid even a single day of brownouts, Cebu would require an additional 600 megawatts of capacity immediately.
The island depends on its links to Luzon and Mindanao to offset its energy deficit and functions as a central hub for transmitting imported electricity throughout the Visayas. Regional peak demand is projected to soar from 2,464 megawatts in 2023 to 10,678 megawatts by 2050, with Cebu’s yearly power usage consistently exceeding the national average.
Solving the country’s energy challenge
The DoE’s Philippine Energy Plan charts a path toward a sustainable future, targeting over 40% renewable energy by 2030 and 50% by 2040. The plan focuses on boosting renewables, driving economic growth, and ensuring affordable energy access.
During the 6th Paderanga-Varela Memorial Lecture, speakers explored the Philippines’ challenge of securing energy while striving to cut carbon emissions.
Eduardo Araral, associate professor at the Lee Kuan Yew School of Public Policy, observed that the current grid infrastructure is not yet prepared for renewable energy integration. He explained, “There’s no sense of green energy option, but the grid is not yet ready. So I think they (DoE) are getting the system ready right, but we don’t want our option to move faster than the readiness of the grid. Otherwise, you’re stuck with a lot of excess capacity.”
Rolando Paulino Jr., chief engineer and projects officer at Aboitiz, highlighted that the real challenge lies not just in increasing energy capacity, but in doing so in a way that ensures long-term sustainability without compromising current needs.
Paulino also addressed the issue of energy equity, drawing a comparison between the Philippines and Singapore, which have similar electricity prices. “But the problem is the salary of the Filipinos are much lower, and therefore the burden to us is actually much higher,” he said. He explained that transitioning to renewable energy would require significant investments to replace the current baseload power plants. “The question now is, how much will that cost, if you take it from an energy mix perspective, and can the Filipinos actually take the burden of that additional cost?”
While Araral praised the country’s sustainability efforts, he warned against hastily phasing out legacy fuels in the push for green energy. “I think we have to do this in a very, very pragmatic way, and the first and foremost principle, really is energy security and affordability. Decarbonization should be a second point, not the main driver of energy security.”