Cebu’s power problem shifts from generation to grid capacity

CEBU, Philippines — Cebu’s power problem is no longer only about adding generation. The bigger constraint is whether the grid can move new electricity to where it is needed, according to Mandaue Chamber of Commerce and Industry President Barbara Gothong-Tan.

Cebu has about 1,500 megawatts of power demand, Gothong-Tan said, leaving the province vulnerable to alerts when available supply falls too close to demand. A 30 percent reserve margin would require roughly 2,000 MW of available capacity, she said.

The situation has been worsened by outages at power plants, including Therma Visayas Inc., or TVI. Gothong-Tan said one unit is expected to return in August 30 (Unit 2) and September 11 (Unit 1) bringing the plant’s 300-MW capacity back into service.

But additional generation alone will not solve Cebu’s reliability problem, she said.

“Regardless if we’re going to build 10 gigawatts by tomorrow, there’s no way of connecting it to the grid” without adequate transmission capacity, Gothong-Tan said.

She pointed to delays in the transmission development plan and the lack of new lines as key constraints. Congestion can also raise system losses and other power-related charges, adding to the cost borne by businesses and consumers.

The issue is particularly pressing for Mandaue’s industrial sector, where sudden power interruptions can damage equipment and disrupt production, Gothong-Tan said.

Cebu also remains dependent on electricity imports from Luzon and Mindanao, exposing the province to supply problems elsewhere in the country.

That makes local generation more important, she said. Cebu needs additional dependable, or baseload, power rather than relying solely on solar projects, which cannot provide electricity around the clock.

Businesses are already taking steps to protect operations. Some companies are turning to renewable-energy suppliers, while others are installing solar panels and adopting their own backup measures.

But those options can be costly. Gothong-Tan said electricity prices faced by businesses have already reached about P15.60 per kilowatt-hour and could rise further.

Companies may not be able to pass the full increase to customers because they must remain competitive, she said. Businesses often absorb part of the higher cost rather than risk losing market share.

The government’s proposals to reduce electricity costs also face a basic question: who ultimately pays?

Any subsidy or cost-transfer mechanism, Gothong-Tan said, would eventually have to be funded by someone, with the burden potentially returning to consumers.

For the business sector, the more durable answer is infrastructure.

Gothong-Tan called for the transmission development plan to keep pace with the power plants being built or planned in the country. She also cited permitting delays and right-of-way issues that can hold back projects.

“There has to be synergy between NGCP, ERC and DOE,” she said, referring to the National Grid Corp. of the Philippines, Energy Regulatory Commission and Department of Energy.

The challenge, she said, is aligning regulation, investment returns, power rates and infrastructure development so that private companies have enough incentive to build while the grid can accommodate new capacity.

Cebu’s emerging energy projects — including battery storage, renewable generation and new conventional capacity — can strengthen reliability, but only if transmission and grid connections are delivered alongside them.

For Cebu’s business community, the issue is increasingly a competitiveness concern rather than simply a power-sector problem.

Without a grid capable of delivering dependable and affordable electricity, new factories, commercial projects and other investments may face higher operating costs and greater risk.

The priority now, Gothong-Tan said, is to make generation, transmission and regulation move together rather than allowing each part of the power system to operate on separate timelines.