Future-Ready Energy Framework: Key to Powering Cebu’s Economic Rise

As Cebu continues to solidify its position as the region's leading economic hub, the reliability and resilience of its energy infrastructure will determine its ability to attract investment, sustain industries, and better serve its citizens.

A reliable energy framework is about ensuring business continuity, sustaining industrial growth, and attracting new opportunities. I Photo: Department of Energy Philippines

Stakeholders agree: by proactively building a future-ready energy framework—one that not only ensures energy abundance but also fosters a stable and competitive energy landscape—Cebu can achieve its long-term economic ambitions.

The Department of Energy (DOE) expects 6,841 megawatts (MW) of additional capacity from power projects set to come online in 2025. Of this new capacity, 855 MW will go to the Visayas region, 232 MW to Mindanao, and the largest share, 5,754 MW, to Luzon.

The DOE also stated that renewable energy projects comprise most of this year’s developments. Among traditional power sources, gas-fired power plants lead with 1,320 MW of committed capacity, followed by coal (500 MW) and oil (76 MW).

The completion of these power projects couldn’t come at a better time, as demand is expected to grow by 16% to 3,111 MW in the Visayas, compared to 5.4% to 14,769 MW in Luzon and 8.2% to 2,789 MW in Mindanao.

Speaking at an energy forum in November, Cebu Governor Gwendolyn Garcia warned that power demand in Cebu is already exceeding the national average year-on-year. Cebu’s total plant capacity of 1,123 MW fell short of the peak demand of 1,223 MW recorded in May 2024, according to the National Grid Corporation of the Philippines. Time is of the essence.

Projections based on the Philippine Energy Plan show that peak demand in the Visayas will rise to 10,678 MW by 2050.

Energy Secretary Raphael Lotilla remains optimistic, stating in a briefing that 2025 will bring a "much better situation" due to these soon-to-be operational power projects and newly energized transmission lines.

"While it is an election year, it is also not an El Niño year; in fact, it is seen as a La Niña year, and therefore, the constraints we saw last year will not be as severe this year," Lotilla said.

Sustaining Cebu’s Economic Momentum

Central Visayas’ energy sector will benefit from new power projects coming online, with a growing emphasis on renewable energy alongside the crucial role of baseload capacity.

The critical question remains: Can Cebu’s energy supply sustain the momentum of its rapidly expanding economy? In 2023, Central Visayas posted the fastest economic growth rate in the country at 7.3%, with Cebu serving as its economic engine.

Cebu's strategic location makes it a vital economic and logistics hub, but maintaining its competitive edge requires a reliable and abundant energy supply.

Compared to other key economic hubs such as Metro Manila and Davao, Cebu faces greater pressure to enhance its power infrastructure, given its reliance on external energy sources.

Garcia has reminded government officials, business leaders, and energy stakeholders of the “profound impact energy has on business, industry, and the daily lives of Cebuanos.”

Unreliable electricity threatens the continuous operations of key industries such as tourism, IT and business process management (IT-BPM), and manufacturing. It also impedes Cebu’s ability to deliver essential government services and achieve its smart city goals.

Critical infrastructure projects and transport systems will also be affected. The governor emphasized the need for Cebu to generate power capacity in-island instead of being “at the mercy” of power imports from neighboring provinces.

Currently, Cebu imports about 60% of its energy needs from neighboring islands. Energy independence is vital to ensuring Cebu remains a strong and competitive investment destination.

Baseload Power: The Foundation of Energy Reliability

For Cebu to sustain its economic momentum, a robust and stable energy grid is indispensable. Baseload power sources, including coal-fired and geothermal power plants, contribute to this stability by providing continuous electricity regardless of demand fluctuations.

At the same time, the country is expanding its energy portfolio, targeting a 35% renewable energy share by 2030 and 50% by 2040 to support long-term sustainability.

The DOE considers the country’s 6,300 MW of coal-fired power capacity sufficient for now to meet baseload power needs until 2030, as expansions of existing facilities and new energy sources continue to be developed.

“We do not set aside our responsibility to ensure adequate baseload capacities in conjunction with our push to increase the renewable energy share in the power mix,” Lotilla said at a forum in June 2024.

As the Visayas region’s energy needs grow, a diverse and well-balanced energy mix remains essential for long-term security. Combining baseload power and renewable energy sources will ensure stability while enabling Cebu’s transition to a more sustainable energy future.

Expanding Energy Capacity in the Visayas

Securing Cebu’s energy future requires strategic action and bold investments in large-scale power initiatives. A reliable energy framework goes beyond simply meeting growing demand—it’s about ensuring business continuity, sustaining industrial growth, and attracting new opportunities.

As of May 2024, the Visayas had around 76 power plants generating a total capacity of 3,334 MW, with 49% coming from renewable sources. More energy projects are underway.

For example, AboitizPower is expanding its 340-MW Therma Visayas Inc. (TVI) coal-fired power plant in Toledo, Cebu, to add 150 MW and ensure a reliable power supply.

Additionally, several solar power projects are expected to be completed in 2025, including:

• The 300-MW Kananga-Ormoc Solar Power Project

• The 137.48-MW Calatrava Solar Power Project

• The 130.05-MW Bacolod Solar Power Project

• The 112-MW San Isidro Solar Power Project (Phase 1)

South Cleanergy Inc. also plans to build a 239.56-MW solar farm and a 65-MW battery energy storage system (BESS) project in Negros Occidental. Construction is expected to begin in the first quarter of 2026, with commercial operations targeted for late 2027.

Meanwhile, the 206-MW San Isidro wind project is scheduled to begin commercial operations in February 2026.

The influx of new power projects and the pursuit of a diverse energy mix signal a promising outlook for Cebu and Central Visayas. However, sustaining this momentum requires decisive action and continued collaboration among the government, energy providers, and industries to build a stronger, more resilient energy landscape.

By committing to a future-ready energy framework today, Cebu can secure its position as a powerhouse of economic growth, investment, and innovation for years to come.