As consumers grapple with rising electricity costs amid the country’s shift to cleaner energy, the Department of Energy is sounding the alarm on a quieter but mounting pressure — insurers’ reluctance to provide fair coverage for coal-fired power plants.

In a media briefing on Thursday, Energy Secretary Raphael Perpetuo Lotilla urged insurance providers to lower premium rates for these facilities, warning that steep insurance costs could further strain the power sector and, ultimately, weigh on consumers.

Lotilla raised the issue following discussions with insurance firms, which he said have shown reluctance to offer reasonable coverage rates for the power sector.

“One of the issues that was raised was (some are closing their plants). Part of the answer is with the insurance industry because they are the ones who have shown reluctance in providing reasonable rates of insurance for the power sector, particularly... for coal-fired power plants that are existing,” Lotilla said.

Premiums rise

He noted that premiums for insuring Coal facilities have increased in recent years, creating additional financial strain for operators. 

While the Philippines has imposed a moratorium on new coal developments, several newly built and existing plants remain part of the country’s active energy mix.

“Since coal-fired power plants in the Philippines are part of the transition story, we have the challenge of getting not only financing for those still to be built, but the insurance premiums that are being charged, especially for these power plants,” Lotilla said.

He noted that coal plants not covered by the moratorium continue to play a role in ensuring energy reliability, and that insurance pricing must reflect this reality.

“I emphasize to the insurance company that we have had a stable legal framework, especially in the power sector since 2001, when EPIRA was passed, we have not reversed the direction of privatization,” he said.

“In our desire to be more balanced, in addressing the challenges of having affordable and accessible, reliable and resilient, as well as clean sources of energy, we have to consider this,” Lotilla said.

As of April, data from the Independent Electricity Market Operator of the Philippines showed that coal remains the dominant power source, accounting for 63.23 percent of total generation, followed by natural gas at 14.34 percent.