As Cebu strengthens its role as Central Visayas’ economic leader, reliable energy is key to attracting investment, supporting industries, and improving services. To reach its growth goals, the province must build a stable, future-ready power system. Recent years have shown the strain, especially as fast-growing cities like Mandaue, Lapu-Lapu, and Cebu drive demand.
Both government and business leaders agree that to keep attracting investments and supporting industries, Cebu needs to build a future-ready energy system. Ongoing power shortages risk slowing the region’s recent economic progress.
According to the Department of Energy (DOE), most new energy projects this year are renewables, primarily solar, which are subject to variability. The International Trade Administration highlights that in the Philippines, challenges with grid integration and renewable intermittency persist.
Among conventional sources, gas-fired plants take the top spot with 1,320 megawatts (MW), followed by coal and oil. These additions are timely, with Visayas’ power demand expected to rise 16%—higher than Luzon’s 5.4% and Mindanao’s 8.2%.
Cebu faces a fragile energy outlook
In April 2024, the National Grid Corporation of the Philippines (NGCP) reported that both Luzon and Visayas hit their peak power demand, with Visayas reaching 2,525 MW. This surge in usage pushed the grids beyond capacity, triggering Red and Yellow alerts in both already stressed regions.
The Institute for Climate and Sustainable Cities (ICSC) warns in its latest Philippine Power Outlook that the Visayas grid could experience Yellow Alerts in June due to limited power imports from Luzon.
“Transmission capacity varies between islands, which creates bottlenecks when demand spikes in a specific area,” explained the report.
The ICSC forecasts a negative net operating margin for Visayas from April to June, indicating that local power generation will fall short of meeting peak demand.
Meanwhile, peak demand in Visayas is projected to reach 10,678 MW by 2050, based on the Philippine Energy Plan.
(Also read: Electric Coops’ Underinvestment Threatens Panay Grid)
Keeping pace with rapid economic expansion
In 2023, Cebu was key in driving Central Visayas’ 7.3% economic growth, the highest among all Philippine regions. The island’s economy hit a milestone, reaching a GDP of P1.01 trillion, contributing significantly to the region’s rapid expansion.
A dependable and abundant energy supply is crucial for Cebu to maintain its position as a key economic and logistics hub. Unlike Davao and Metro Manila, Cebu faces more pressure to strengthen its power infrastructure due to its reliance on external energy sources.
Governor Gwendolyn Garcia has stressed to government officials, business leaders, and energy stakeholders the significant impact energy has on Cebu’s economy, industries, and the daily lives of its residents.
Cebu’s strong economy is complemented by its high residential appeal, driven by excellent social services. The province is home to top schools, including the University of San Carlos, ranked seventh by EduRank in 2024.
Additionally, Cebu boasts a robust healthcare network, with over 30 government and private hospitals regulated by the Department of Health.
Cebu Electricity Rights Advocates have called for urgent investment in local power plants to reduce dependence on external sources. They warned that frequent power outages could disrupt services like water, transport, and healthcare, as well as damage tourism.
Adding to the burden is the projected growth of Metro Cebu’s population, expected to reach 3.8 million by 2030, further straining the province’s energy resources.
Baseload power: Cebu’s energy backbone
For Governor Garcia, developing Cebu’s in-island power capabilities is urgent. At an energy forum, she highlighted that Cebu currently relies on neighboring islands like Leyte and Panay for about 60% of its electricity supply.
“We cannot be relying mainly on others for our power. We need to be self-sufficient, not in 2027 but now,” Garcia stated. She also emphasized the need to enable power generation companies to expand their capacity to meet Cebu’s energy needs.
To sustain its economic momentum, Cebu needs a strong and stable energy grid. Baseload power sources, such as coal-fired plants, play a crucial role in ensuring consistent electricity supply, even during demand fluctuations.
In this context, coal remains a key source of energy for the Philippines to meet its increasing demand, as noted by the International Energy Agency. As the agency explains, “Coal plants are typically used as a source of baseload power due to their capacity to operate continuously and provide an uninterrupted supply of electricity.”
Even the DOE acknowledges the crucial role of coal, with the country’s 6,300 MW of coal-fired power capacity deemed sufficient to meet baseload needs until 2030, as ongoing expansions and new energy sources are developed.
“We do not set aside our responsibility to ensure adequate baseload capacities in conjunction with our push to increase RE (renewable energy) share in the power mix,” DOE Secretary Raphael Lotilla stated at a forum in 2024.
Securing baseload power is also crucial for lowering energy prices. As Minimal Government Thinkers President Bienvenido S. Oplas Jr. pointed out, Visayas faces the smallest supply margin, with only 144 MW/month compared to 889 MW/month in Mindanao and 1,838 MW/month in Luzon.
He further noted that low supply margins lead to higher prices. On average, electricity in Visayas costs P1.50/kWh more than in Luzon and P2.50/kWh more than in Mindanao. Additional power capacity is needed to help lower these prices.
To tackle these power challenges, efforts are underway to expand the 340-MW coal-fired power plant in Toledo, Cebu.
Meanwhile, in November 2024, Meralco PowerGen Corp. (MGen) estimated a $2 billion investment to develop an 80-MW coal-fired power plant in Toledo, Cebu. The project has already secured environmental compliance certificates.
(Also read: Here’s Why Cebu Province Needs More Energy Security)
Towards a more diverse energy mix
Alongside baseload expansion, several RE initiatives are set to be completed by 2025.
These include the 300-MW Kananga-Ormoc, 137.48-MW Calatrava, 130.05-MW Bacolod, and 112-MW San Isidro Solar Power Projects. South Cleanergy Inc. is also preparing to build a 239.56-MW solar farm with a 65-MW battery storage system in Negros Occidental, set to begin construction in early 2026 and expected to start operations in late 2027.
Moreover, the 206-MW San Isidro wind project is slated for completion by February 2026.
The growth of new power projects and a diverse energy mix offer a positive outlook for Cebu and Central Visayas. However, sustained progress will require continued collaboration from stakeholders to create a more reliable power infrastructure. By investing in a future-ready energy framework, Cebu can solidify its role as an economic powerhouse.
Sources:
https://dailyguardian.com.ph/luzon-visayas-face-tight-power-supply-in-june-2025-study-says/
https://philstar.com/business/2024/11/28/2403390/mgen-spend-2-billion-expansion
https://www.trade.gov/market-intelligence/philippine-renewable-energy-opportunities