Insurance Premiums Impact Coal-Fired Power Plants
Operators of coal-fired power plants are currently facing a significant rise in insurance premiums. This increase has led the Department of Energy (DOE) to urge insurance companies to offer “reasonable” rates. Coal-fired power plants remain an essential part of the country’s energy mix despite these challenges.
Energy Secretary Raphael Lotilla explained that premiums have gone up especially for coal-fired power facilities. He recently met with insurance company representatives to emphasize that “the regulatory framework is stable in the country” when it comes to these plants.
Moratorium and Its Effects on Insurance Rates
The moratorium on building new coal-fired power plants has caused hesitation among insurers. They are reluctant to provide fair premium rates for the existing coal power sector. According to the Energy chief, “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 that have come in.”
He further explained that the government aims to maintain a balanced power mix. This involves ensuring affordable, accessible, reliable, and clean energy sources while recognizing coal’s role in this transition.
Coal’s Continued Role in Energy Generation
Coal still accounts for about 63% of the country’s power generation. The DOE expects power producers to add roughly 2,255 megawatts of coal supply by 2028. This expansion is part of the goal to increase overall capacity to 11,000 megawatts.
This additional capacity is crucial to meet the projected peak demand growth of approximately 5.3% between 2023 and 2028. The Energy Department emphasizes the importance of managing insurance costs in ensuring the sustainability of coal-fired power plants during this transition.
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