MANILA, Philippines — For Cebu’s 3.3 million residents, a steady supply of electricity is essential. Power outages can disrupt daily life, leading to spoiled goods for vendors, learning loss in schools, and interrupted hospital care. Cebu now faces a critical energy challenge: its supply is struggling to meet growing demand.

The Department of Energy (DOE) projects Visayas’ peak demand to jump from 2,464 MW in 2023 to 2,864 MW by 2026, potentially soaring to 10,678 MW by 2050, with Cebu accounting for half. In May 2024, Cebu's peak demand of 1,223 MW already exceeded its plant capacity of 1,123 MW, resulting in a 100 MW shortfall.

This supply shortage threatens more frequent brownouts for Cebuanos, impacting households and livelihoods. Vendors and small businesses risk losing income, while essential services like hospitals, schools, and government offices face disrupted operations.

At the mercy of energy imports

Cebu currently imports about 60% of its electricity from plants outside Metro Cebu, leaving the island vulnerable to external power supply issues. The concern lies in the province’s energy security and availability should inter-island transmission be affected by natural disasters, technical issues or supply constraints in other regions. This dependence leaves Cebu exposed to risks beyond its immediate control.

In addition, this vulnerability underlines the urgent need to boost embedded energy supply to protect families from price volatility. Cebu's electricity rates are primarily driven by generation charges or the cost of producing power; fluctuations in fuel prices, especially in areas dependent on imports; and the transmission and distribution fees, which cover the delivery of electricity from power plants to consumers.

The economic impact of an unstable supply is substantial. Advocacy group ILAW reports that persistent power outages cost tourist destinations like Cebu millions in lost revenue. In Cebu alone, large businesses face daily revenue losses of around P216,000, while micro, small and medium enterprises or (MSMEs) lose about P82,000 per day of blackout. Consumers also see a significant portion of their disposable income eaten away by intermittent power at often high costs.

Increasing energy supply in Cebu

When energy supply sufficiently addresses demand, prices stabilize. Thus, by expanding embedded power plants, it can help minimize dependency and can shield customers from certain vulnerabilities in supply and its price, much like what is projected for Cebu.

One such initiative in the region is the 169-megawatt expansion of the Therma Visayas Inc. (TVI) coal-fired plant in Toledo. As a reliable baseload source, this expansion is expected to significantly help address Cebu's energy security moving forward.

The DOE also anticipates an additional 855 MW of capacity in the Visayas from projects starting operations this year. These include solar projects like the 300-MW Kananga-Ormoc, 137.48-MW Calatrava, 130.05-MW Bacolod, and 112-MW San Isidro Phase 1. But while these complement the energy mix, they cannot replace the consistent baseload power needed in growing provinces like Cebu.

Even as the Philippines targets renewables to comprise 50% of its power generation by 2040, provinces like Cebu still require baseload power to ensure grid stability. A stable energy supply is crucial for continued growth as it can make or break the type of investments that generate high-quality jobs and create economic ripple effects. It also enables the province to deliver uninterrupted social services, especially in remote communities.