Energy Secretary Raphael Lotilla on Thursday urged insurance companies to continue providing coverage to coal-fired power plants at reasonable rates amid the ongoing energy transition.
“The general observation is that insurance premiums have significantly increased in recent years,” Lotilla said in a briefing. “And not only have they increased, but they are reluctant to reinsure coal-fired power plants.”
He said the insurance industry has also “shown reluctance in providing reasonable insurance rates for the power sector,” even for existing coal-fired plants.
“Premium rates, the premiums for insurance, have increased, especially for coal-fired power plants,” the energy chief said. “Since coal-fired power plants in the Philippines are part of the transition story — in other words, we still have coal-fired power plants that are not covered by the coal moratorium and have come online.”
He said coal power plant developers face challenges in both financing and higher insurance premiums.
“We want them to realize that in our desire to have a more balanced approach to addressing the challenges of affordable, accessible, reliable, resilient and clean energy sources, we have to take this into account,” Lotilla said.
Lotilla said the Philippines has about 7,000 megawatts of coal-fired power plants that are 10 years old or younger, which will have difficulty obtaining insurance.
“We want to ensure that by having these discussions with the insurance companies, we’ll be able to help convince them that the risks they associate with the Philippines are actually much less than what they are factoring into their premiums,” he said.
He said the Philippines also has a stable regulatory framework for the power sector, which should be “a source of assurance that the regulatory framework is stable in the country and the downstream deregulation law is also in place.”
