Table of Contents
The Visayas power grid may enter yellow alert status in May as thin reserve margins, rising electricity demand, and persistent plant outages converge, highlighting structural vulnerabilities in the region’s energy system, according to a new outlook by the Institute for Climate and Sustainable Cities (ICSC).
ICSC’s April–June 2026 outlook identified the Visayas as the most vulnerable among the country’s three main grids, with a heightened risk of supply tightness during the summer months when electricity demand typically peaks. A yellow alert is issued when operating reserves fall below required levels, signaling reduced buffer capacity to respond to sudden outages or spikes in demand.
Despite expectations that the Visayas will maintain nominal reserve levels through imports, the think tank warned that these margins could quickly erode. The region is projected to rely on as much as 450 megawatts (MW) from Mindanao and 250 MW from Luzon to stabilize supply. However, this support may not be guaranteed.
“This may be further aggravated if Luzon and Mindanao need to restrict exports as their reserve margins tighten,” the group said, noting that the tightest supply conditions are expected toward late April.
The Visayas grid already recorded a yellow alert on January 20, which is already alarming during the cool season when demand is typically lower. This indicates underlying structural issues beyond seasonal consumption patterns.
More Stability In Luzon And Mindanao
In contrast, both Luzon and Mindanao are projected to maintain sufficient reserves throughout the second quarter, barring major generation disruptions. Luzon’s outlook is supported in part by new capacity additions, including the initial phase of the MTerra Solar project in Central Luzon, which is expected to contribute to supply stability.
Mindanao, meanwhile, continues to benefit from ample generation capacity, allowing it to meet internal demand while exporting electricity to the Visayas. However, analysts caution that any unexpected outages or demand surges in these regions could limit their ability to provide support.
“If additional power plants go offline beyond what is expected, this could further aggravate the power outlook and potentially lead to a more grave outcome,” said ICSC chief data scientist Jephraim Manansala.
Structural Issues
Beyond seasonal pressures, ICSC attributed the Visayas’ vulnerability to deeper systemic issues, including frequent forced outages of baseload coal plants and insufficient flexible generation resources.
The Philippines currently has around 18,511 MW of dependable baseload capacity, largely from coal plants, far exceeding the estimated 12,000 MW required during non-peak periods. However, these plants are designed to operate continuously and are ill-suited to respond to rapid fluctuations in demand.
Conversely, more flexible technologies such as battery storage, pumped hydro, and gas turbines remain underutilized or are operated as baseload, reducing overall system efficiency. This imbalance, according to ICSC, contributes to grid instability and increases the likelihood of outages during peak demand periods.
The group also noted that market mechanisms such as the secondary price cap (SPC) may be discouraging investment in flexible capacity by limiting price signals during high-demand intervals.
Global Risks
The outlook comes against the backdrop of escalating tensions in the Middle East, which have begun to affect global energy markets. While the ICSC analysis did not fully factor in these developments, it warned that fuel price volatility poses additional risks to the Philippine power sector, particularly for imported coal and diesel.
Coal remains the dominant energy source in the country, accounting for roughly 56 percent of generation in 2025. However, heavy reliance on imports amounting to 70 percent of coal supply in 2024 has exposed the country to global price swings. ICSC noted that coal prices have already risen by about 12 percent within two weeks amid the ongoing conflict.
The potential disruption of key shipping routes, such as the Strait of Hormuz, could further strain fuel supplies. Diesel-dependent power plants, in particular, may face operational challenges if prices continue to surge.
Calls For Diversification
To mitigate risks, ICSC recommended a shift toward a more flexible and diversified energy mix, alongside measures to prevent unplanned outages and accelerate the entry of committed power projects.
The group also highlighted distributed energy solutions, such as rooftop solar, as a readily deployable option to ease demand pressures and reduce dependence on imported fuels. Expanding indigenous energy sources, it added, could improve energy security and stabilize electricity costs over the long term.
In the near term, mechanisms like the Department of Energy’s Interruptible Load Program (ILP) may help cushion supply shortfalls in Luzon. However, the program relies on diesel generation, making it vulnerable to rising fuel costs.
ICSC also called on the National Grid Corporation of the Philippines (NGCP) and the Department of Energy (DOE) to release updated power outlooks to improve transparency and planning accuracy, noting that projections were partly constrained by limited recent data.
Source:
https://www.rappler.com/philippines/visayas-may-face-yellow-power-alert-may-climate-report
https://www.philstar.com/business/2026/03/26/2516792/thin-reserves-put-power-grids-risk