GRID STRESS: Thin power reserves raise summer outage risk

By Francis Allan L. Angelo

The country’s three major power grids are projected to have sufficient electricity supply from April to June 2026, but dangerously thin reserve margins leave the system vulnerable to outages and demand surges during the peak summer months, according to the Institute for Climate and Sustainable Cities (ICSC).

The climate and energy policy group released its latest “Philippine Power Outlook: Reviewing the Adequacy of Power Supply for April to June 2026” on March 24, warning that supply margins remain highly sensitive to changes in demand, delays in project completion, unplanned outages of major power plants, and constraints in the high-voltage direct current (HVDC) lines connecting the Luzon, Visayas, and Mindanao grids.

The report found that the Luzon grid will have adequate reserves in the second quarter, provided committed power plant capacities come online on schedule during the first half of 2026. Among the most notable projects are Phase 1 of the Terra Solar project, with a total projected capacity of 1,785.7 megawatts (MW), and the Bugallon Solar Power Project at 530.4 MW.

Luzon’s tightest period is projected to occur during the week of May 18 to 24, when peak demand is expected to reach 15,683 MW.

The Visayas grid, meanwhile, is expected to maintain normal reserves primarily through HVDC imports of up to 450 MW from Mindanao and 250 MW from Luzon. However, yellow grid alerts are projected for May, even with power imports from across the country. The situation could worsen if Luzon and Mindanao need to restrict exports as their own reserve margins tighten.

Visayas demand is projected to peak at 3,340 MW during the week of May 18 to 24. On its own, the Visayas grid will carry a negative net operating margin throughout the second quarter, making it structurally dependent on imports.

Mindanao is projected to maintain normal reserve levels throughout the second quarter, with sufficient existing generation capacity to meet demand while still exporting power to Visayas. Its tightest period is expected during the week of April 20 to 26, coinciding with projected peak demand of 2,975 MW.

The analysis is based on the 2025–2027 Weekly Power Outlook published by the National Grid Corporation of the Philippines (NGCP) in December 2024, with updates from the Department of Energy’s (DOE) List of Existing and Committed power plants as of November 2025. ICSC adopted conservative assumptions, accounting for forced outages of about 700 to 800 MW — equivalent to roughly two coal-fired power plants or one unit of the largest coal power plants going offline.

“If additional power plants go offline beyond what is expected, this could further aggravate the power outlook and potentially lead to a more grave outcome, as available supply would be reduced,” said Jephraim Manansala, ICSC’s Chief Data Scientist and one of the authors of the Philippine Power Outlook report.

ICSC has released its Power Outlook report annually since 2021, estimating power supply and demand ahead of the summer months. This year, the first grid alert was already raised over the Visayas grid on January 20, during what is considered a period of low demand. The yellow alert, lasting from 5:00 PM to 7:00 PM, was triggered by forced outages of Therma Visayas, Inc. Unit 1 (150 MW) and Panay Energy Development Corp. Unit 2 (83 MW), while several other baseload plants were already offline for scheduled maintenance.

“This grid alert highlights the structural vulnerabilities that persist in the Philippine power system; it demonstrates that power supply challenges are not solely driven by high summer demand but are fundamentally linked to chronic forced outages of baseload plants and inadequate reserve margins,” said report co-author and ICSC Senior Data Analyst Charles Jason Diaz.

The report noted that in 2025, no red alerts were raised across the country and no grid alerts occurred throughout the second quarter, as most large baseload power plants avoided forced outages during the period. In contrast, 2024 recorded the highest number of grid alerts, with Luzon, Visayas, and Mindanao experiencing 29, 25, and 1 day of grid alerts, respectively.

Escalating conflict in the Middle East has also compounded concerns about Philippine energy security.

Extensive damage to Qatar’s Ras Laffan liquefied natural gas (LNG) facility, the world’s largest LNG export hub, wiped out 17 percent of Qatar’s LNG capacity, with repairs potentially taking up to five years.

The disruption triggered a 10 percent surge in the Japan-Korea Marker, a key Asian LNG spot price benchmark, and combined with ongoing shipping route disruptions through the Strait of Hormuz, prices have risen by 108 percent from pre-conflict levels.

Globally, fossil fuel prices have surged following escalating Middle East tensions, with crude oil increasing by 19 percent, LNG by 47 percent, and coal by 15 percent as of March 5.

The DOE warned of fuel price increases, with diesel prices expected to go up to PHP 24.25 per liter and gasoline prices estimated to increase by up to PHP 13.00 per liter.

The DOE also cited projections of up to 16 percent increase in electricity rates by April if global supply disruptions continue.

In the Meralco franchise area, generation charges have already risen from about PHP 6 per kilowatt-hour in 2023 to PHP 8 per kilowatt-hour in 2025, a 33 percent increase linked to LNG use in power plants.

The impact may be particularly significant in off-grid areas where power supply is heavily reliant on diesel power plants, potentially resulting in reduced operating hours and constrained electricity supply.

Among renewable energy options, ICSC identified solar as a quick-deploy solution that can help stabilize local grids and contribute to an affordable, reliable, and secure power supply.

“We have already identified a significant amount of available potential solar rooftop spaces across the country, and detected over 3,000 MW of existing solar rooftop capacity. Solar and battery are already cheaper than coal and LNG. It does not have the problem of land conversion and interconnection, and it generates power where it is needed,” said Atty. Pedro Maniego Jr., ICSC’s Senior Policy Advisor, citing data from the organization’s solar mapping tool Solar Power Estimation of Capacities and Tracking Using Machine Learning (SPECTRUM).

“The bottomline is that we have plenty of renewable energy (RE) resources. During crises, RE tends to become a hot topic — yet the technologies themselves have already existed for quite some time. While strong policies are already in place, their implementation hasn’t been as aggressive as needed in the past,” said Engr. Gaspar Escobar Jr., ICSC’s Grid Modernization Advisor.

“There is a clear need to intensify and accelerate RE deployment even beyond this crisis, so we can eventually move away from our dependence on imported fossil fuels and achieve energy security.”

ICSC recommended short-term measures including improved energy efficiency and conservation, strict compliance with the Grid Operating and Maintenance Program (GOMP), and utilizing energy imports and exports among the major island grids.

In the medium to long term, the organization called for a transition to a flexible and modernized power grid, along with more distributed and diversified power generation that makes use of the country’s indigenous renewable energy sources.

The report also flagged a critical data limitation: the absence of an updated NGCP power outlook for 2026.

The most recent outlook was released in 2024 and covered 2025 to 2027, with numerous committed power plants encountering delays, cancellations, or revised commissioning schedules throughout 2025.

ICSC called on the NGCP and DOE to prioritize the timely publication of updated power outlooks to ensure all stakeholders can make informed decisions based on current, accurate data.