Energizing Cebu; overcoming power challenges

CEBU, Philippines — The country stands out as the fastest-growing major Asian economy amid global challenges, with a 5.5% growth in the first three quarters of 2023.

Cebu, a key player in this growth, rebounded with a 6.9% growth in 2022 and holds a significant share of Central Visayas' economy.

Cebu plays a vital role in various industries, from manufacturing to information technology and tourism. The province's infrastructure and economic activities, including IT-BPM and tourism, contributed to a 42.7% rebound in accommodation and food services in 2022.

Before the pandemic, Cebu was identified for potential heavy and extractive investments. However, stable electricity remains crucial for the sustained operation of key industries and the well-being of Cebu's residents.

Recent Panay blackouts raised concerns, causing economic losses of P3.8 billion and exposing vulnerabilities in the Philippine energy complex. Visayas, particularly Cebu, faces a potential deficit of over 400 MW, impacting its power reserves and necessitating the need for new inland power plants.

Cebu's lack of new power plants raises concerns about rising electricity costs, already high at P19.69 per kWh in December 2022. Achieving self-sufficiency in power generation is suggested to alleviate these challenges.

The Department of Energy and the National Grid Corporation of the Philippines consider Cebu a key site for large-generation capacity additions. However, until additional power plants and transmission lines are established, the country's rapid sustained growth hangs in the balance.

A power shortage could hinder not only Cebu's growth but the entire Philippines'. The region's peak demand exceeds its available generating capacity, raising the risk of capital flight, business closures and a decline in living conditions due to layoffs and poor social services.

These concerns emphasize the urgent need for strategic energy solutions in Cebu and the broader Visayas region.