At the Freeman Business Forum’s “Powering Cebu,” Cebu Governor Gwen Garcia highlighted the importance of reliable energy for the province’s economic growth. Public and private sectors agreed on the need for increased power capacity, with Garcia emphasizing embedded power plants as vital for preventing outages.
“The power demand of Cebu year-on-year is exceeding the national average,” she said. “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.”
Cebu’s current power capacity falls short of its peak demand, according to the National Grid Corporation of the Philippines. The island relies on interconnections with Luzon and Mindanao to bridge the gap and serves as a key hub for distributing imported power across the Visayas. With regional peak demand expected to rise sharply from 2,464 megawatts in 2023 to 10,678 megawatts by 2050, Cebu’s power consumption already outpaces the national average annually.
Garcia highlighted the importance of embedded power plants in Cebu, explaining that without them, the island would rely heavily on power imports from Tongonan, Leyte. She noted that past blackouts in Tongonan led to prolonged outages in Cebu due to the delays in restoring grid synchronization.
Reliable power: essential to progress
“Power is a crucial and non-negotiable ingredient to progress,” Garcia stressed. “Power gives life to the economy. If there is a lack of [electricity], then there is no economic growth to speak of.”
Additionally, power reliability plays a critical role in driving economic development, according to Cebu Chamber of Commerce and Industry’s Jay Yuvallos. He highlighted that “if power is unreliable and [unsustained], then the risk becomes so high,” stressing that energy security could help lift over 200,000 families out of poverty in Central Visayas. Yuvallos further shared the Chamber’s vision “to be the engine of Cebu’s business growth towards global competitiveness,” noting that Cebu’s industries have value chains extending across Central Visayas, the broader Visayas, and parts of Mindanao.
Meanwhile, the Department of Energy (DoE) projects that by 2050, the region’s electricity demand will consume a significant portion of the available power capacity, alongside Mindanao. DoE Assistant Secretary Mario C. Marasigan explained that “for the Visayas, we could have… dependable capacity of 3,296 megawatts,” which would cover demand and reserves. He cautioned, however, that “we will continuously rely on the transfer of energy from Luzon and Mindanao,” noting that “Mindanao is also growing fast.”
Ensuring energy affordability
Rolando J. Paulino, Jr., Chief Engineer of Aboitiz Power-Thermal Business Group, highlighted the importance of a balanced energy mix to support Cebu’s rapid development while ensuring power remains sustainable and affordable. He pointed out that the Philippines grapples with an “energy burden,” as minimum-wage earners dedicate a substantial share of their income to electricity, a challenge less pronounced in wealthier nations like Singapore. Paulino stressed that transitioning to renewables, while vital for long-term sustainability, must be approached carefully to prevent steep price increases.
He cited an example where shifting from coal to LNG could raise household electricity costs by 400 pesos monthly for those consuming 200 kilowatt-hours—a significant impact on low-income families. “Careful planning in renewable energy (RE) adoption” is essential “to avoid making electricity unaffordable”, he said. Paulino called for collaborative efforts, stating, “Let’s move forward with purpose and determination, working together to build an energy future that truly benefits everyone.”
The nation’s energy challenge
At the 6th Paderanga-Varela Memorial Lecture, speakers discussed how the Philippines is struggling to balance energy security with the need to reduce carbon emissions. While shifting to RE is crucial for meeting climate goals and reducing environmental harm, the transition demands significant funding, innovation, and strong government policies.
In his presentation, Associate Professor Eduardo Araral of the Lee Kuan Yew School of Public Policy rated the country’s infrastructure readiness for renewables as low. “I think our infrastructure is not yet ready,” he said. “I think we should not say blindly, ‘we should stop financing legacy fuels.’ I think that would be very dangerous.
Meanwhile, DoE Undersecretary Rowena Cristina Guevara talked about how the country’s headline inflation rate dropped within a month from 3.9% in May to 3.7% in June. Data attributes this to the dramatic drop in non-food inflation, including housing and utilities (electricity, household gas, liquid and solid fuels) “to a mere 0.1% in June down from 0.9% in 2024.” She reiterated that “coal power plants have a role to play in the Philippine energy transition as we still have a growing economy to support and our RE power plants still need to be built.”
Undersecretary Atty. Jonas Leones of the Department of Environment and Natural Resources (DENR) ended the talk with this reality check: “ If we will operate the power plant for these renewable projects, that will require enormous energy…As mentioned by Usec Guevarra, we can’t really escape from the coal power plants.”
In summary, a balanced energy mix is crucial for the Philippines to ensure economic growth, sustainability, and affordability. While renewables are key for climate goals, traditional sources like coal remain essential during the transition. Strategic planning and collaboration will drive a reliable and inclusive energy future.