On August 6, 2025, the Visayas grid, including Cebu, was placed on yellow alert as thinning reserves raised concerns over supply stability. The alert indicates that, although current demand can still be met, the system has a limited buffer to absorb unexpected breakdowns or surges in consumption.
The National Grid Corporation of the Philippines (NGCP) reported that over 733 megawatts (MW) were stripped from the Visayas supply as 17 power plants tripped and six more ran below capacity. Compounding the strain, a separate plant’s shutdown also reduced electricity inflows from Mindanao by about 30 MW.
As a result, the Visayas grid was left running on thin margins, with peak demand reaching 2,369 MW against 2,538 MW in supply. Reserves dropped to 169 MW, short of the 200 MW safety margin needed to cover the loss of a major plant, and slid further to 98 MW by August 7, raising blackout risks.
The Cebu Electricity Rights Advocates (CERA) said 11 plants were forced offline from April to August, six had remained idle since 2023, and four more were operating below capacity, removing 725.2 MW from the grid.
“The thin power reserves of the Visayas grid threaten the region’s economic stability,” warned CERA convenor Nathaniel Chua. “Cebu, as the economic hub of the Visayas, is highly vulnerable to system-wide outages.”
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Signs of a fragile energy system
This recent yellow alert is part of a troubling pattern. In May 2024, the Visayas grid experienced a yellow alert due to plant outages, with 16 power plants on forced outage, one dating back to 2022 and two more from 2023.
The August 6 event marked the fourth yellow alert in the Visayas grid that month, underscoring the recurring nature of these energy shortages, with the first recorded on August 1.
Throughout the summer of 2025, the Visayas region experienced multiple yellow alerts. These alerts were primarily due to a combination of increased electricity demand and limited power supply from neighboring regions.
Notably, Luzon, which typically exports electricity to the Visayas, had to restrict exports during critical periods to safeguard its power supply.
Moreover, power distributors in the Visayas have increasingly leaned on imports from Luzon and Mindanao through the Wholesale Electricity Spot Market (WESM), which exposes consumers to unstable pricing.
Chua cautioned that Cebu’s grid remains vulnerable to shocks, from outages elsewhere to strained transmission links and rising demand across the region. He urged policymakers to accelerate the addition of new plants, reinforce baseload supply, and expand renewable projects to strengthen the island’s power system.
“If the power supply is unstable, it can force businesses to downsize or shut down, leading to job losses,” he explained. “Reliable energy is critical to sustaining Cebu’s economic momentum.”
Earlier, CERA reiterated its warning on Cebu’s precarious power situation, recalling how the March 2025 shutdown of the Naga oil plant and its diesel unit stripped more than 44 MW from the grid. The group said the loss has deepened the strain on an already fragile supply.
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Stabilizing power supply
Cebu’s energy use has been climbing by about 7% annually, a pace that business leaders warn could outstrip available supply.
Cebu Chamber of Commerce and Industry President Charles Kenneth Co cautioned that depending too heavily on the regional grid leaves the province vulnerable, citing last year’s Panay outages as a stark reminder. He pressed for more in-island generation to secure Cebu’s reserves.
“While these interconnections are helpful to us, we would like to establish our autonomous power plants in Cebu so that we always have access to local power,” Co highlighted.
A 169-MW expansion at Therma Visayas Inc.’s Toledo facility is now in progress, part of efforts to boost Cebu’s supply amid surging demand. The island is also set to benefit from a 150-MW solar power plant in Daanbantayan, scheduled to begin operations by December 2026.
These initiatives, alongside ongoing transmission upgrades like the Third Transmission Voltage Interconnection Project, are expected to strengthen grid stability and support the province’s fast-growing economy.
Additionally, the Visayas is emerging as a major hub for clean energy, ranking just behind Luzon in planned capacity. This year alone, 855 MW of new renewable projects are slated to break ground, 846 MW of them solar ventures.
However, Department of Energy (DOE) Undersecretary Rowena Cristina Guevarra is quick to warn that relying solely on solar would be short-sighted, noting its dependence on unpredictable weather. Without sufficient storage systems to stabilize supply, she said, the region cannot treat existing solar capacity as a complete renewable energy (RE) solution.
“Our grid is still fragile. If you introduce too much variable [RE] without the corresponding energy storage system, it would create havoc in our system,” she stressed.
Meanwhile, National Electrification Administration (NEA) Administrator Antonio Mariano Almeda recalled the three-day blackout that crippled Panay Island in January 2024 as proof of the grid’s fragility.
“A lot of REs are hooked up to the grid, and the grid was not ready to accommodate all fluctuations caused by RE plants, and it gave way,” he stated.
The outage exposed how transmission bottlenecks and limited submarine links prevent Western Visayas from fully using or exporting renewable power. He highlighted that the grid remains unprepared to handle fluctuations from renewable sources without stronger infrastructure.
Stable power, a non-negotiable
The DOE’s long-term outlook paints a picture of surging electricity demand, with nationwide sales expected to climb from 91.3 terawatt-hours in 2022 to more than 400 terawatt-hours by 2050.
While Luzon will continue to dominate consumption due to its economic weight, the Visayas is projected to record the fastest growth, expanding at an annual pace of 6.16%—well above the national average of 5.49%.
Meanwhile, Cebu’s electricity needs are projected to surge sharply in the coming years. The DOE expects Cebu’s peak demand to climb from 1,223 MW in 2024 to approximately 1,400 MW by 2026, underscoring its rapidly expanding energy requirements amid economic growth.
Metro Cebu has become a hub for tourism, manufacturing, and IT-BPM, and its appetite for electricity has been climbing steadily. Business leaders stress that a dependable supply is essential. “Electricity costs play a crucial role in attracting venture capital and foreign investments,” said Mandaue Chamber of Commerce and Industry president Marc Ynoc.
However, electricity expenses weigh heavily on Cebu’s business sector. Large corporations typically shoulder more than ₱1.1 million in monthly power bills, while micro, small, and medium enterprises spend about ₱160,000. When outages strike, the financial toll deepens, with daily losses climbing to roughly ₱216,000 for bigger firms and ₱82,000 for MSMEs.
The Visayas’ economic rise hangs in the balance. As the region cements its place as a center for enterprise and tourism, the promise of growth rests on reliable and affordable electricity. Without decisive action to strengthen the grid, power insecurity could stall momentum, drive up costs, and erode the very opportunities that fuel its future.
Sources:
https://www.sunstar.com.ph/cebu/group-pushes-for-new-power-projects-amid-yellow-alert
https://www.philstar.com/nation/2025/08/06/2463374/visayas-grid-yellow-alert
https://cebudailynews.inquirer.net/574529/yellow-alert-raised-for-visayas-grid-on-tuesday-ngcp
https://tribune.net.ph/2025/08/06/fourth-yellow-alert-grips-visayas-grid
https://www.bworldonline.com/the-nation/2025/08/05/689689/yellow-alert-raised-over-visayas-grid
https://mindanews.com/top-stories/2025/04/stable-power-supply-projected-for-mindanao-until-june-2025
https://www.sunstar.com.ph/cebu/power-group-warns-of-supply-strain-seeks-consumer-shield
https://tribune.net.ph/2024/03/01/cebu-business-sector-urgently-pushes-for-power-self-sufficiency
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