COAL-FIRED power plants are experiencing difficulties in obtaining insurance cover as the transition to green energy moves forward, according to the Department of Energy (DoE).
“The general observation is that the insurance premiums have significantly increased since several years ago. And not only that they have increased, but that insurers are reluctant to renew when it is a coal-fired power plant,” Energy Secretary Raphael P.M. Lotilla said at a briefing on Thursday.
Mr. Lotilla said insurers “have shown reluctance in providing reasonable rates of insurance for the power sector,” even for coal-fired power plants that are up and running.
“We still have coal-fired power plants that are not covered by the coal moratorium,” he said. “And we have the challenge of getting not only financing for those that are still to be built, but also the insurance premiums that are being charged especially for these power plants.”
In 2020, the DoE issued a moratorium on the development of greenfield coal-fired power plants.
The Philippines has around 7,000 megawatts of coal-fired power plants that are 10 years or younger, Mr. Lotilla said.
He met with some representatives of the insurance industry on Wednesday.
“We want to make sure (we can) convince them that the risks that they associate with the Philippines are actually much less than what they are (pricing into) their premiums,” he said.
He said insurance companies are currently reviewing their exposure in the face of the changing global environment.
The government is seeking to increase the share of renewable energy in the power generation mix to 35% by 2030 and to 50% by 2040.
In 2023, the power generation mix consisted of 63% coal-fired and 22% renewable energy. — Sheldeen Joy Talavera