We should not be surprised that unrealistic promises are not being delivered, but Mizzi and Muscat must be held to account, Mark Anthony Sammut writes
Interconnector. BWSC. MegaWatts. Gas Pipeline. Tanks. LNG carriers. Energy.
Barely 16 months ago these words were the highlight of the 2013 general election debates. Joseph Muscat kicked off Labour’s election campaign with the promise of a 25 per cent reduction in electricity and water tariffs to be brought about by his and Konrad Mizzi’s grand plan of building a new gas power-station to be financed by the private sector.
They promised the power station will be operating by March 2015, that there will be a 10-year power-purchase agreement and that it will need storage facilities for 60,000 cubic metres of gas. Former Minister Tonio Fenech had called this an “Alice in Wonderland”, and he’s being proven right on all fronts. The Prime Minister confirmed this power station will not be ready by March 2015, the 10-year power-purchase agreement has been reduced to five years, and the storage facility has more than doubled to 140,000 cubic metres stored in a permanently-anchored LNG tanker.
Apart from the technical timelines of the new gas power-station project, there was another aspect of which the PN was highly critical: that this new power-station was completely unnecessary given that the 200MW interconnector cable would enable us to buy electricity from the cheapest suppliers from anywhere in Europe.
This has led the government to a brick-wall. While it has guaranteed the Electrogas consortium, which was selected to build the new power-station, that it would buy all of its 200MW of energy, the Chinese corporation which has bought the 150MW BWSC plant wants a similar guarantee: that all of its energy will be bought as well.
To put things into perspective, Malta has a base-load of around 160MW during the night and an average of 240MW during the day, with peaks during summer of around 450MW. If the government binds itself to constantly buy 350MW of electricity from these two suppliers 24×7, it will be most of the time wasting this energy, apart from leaving dormant a 200MW interconnector cable, an investment costing €200 million which enables us to buy electricity at prices which can sometimes be up to three times lower than the fixed price Labour planned that Electrogas will sell its energy at. Not mentioning another 180MW of spare generation at Phase 2 and 3 of Delimara which Enemalta will still own.
This makes the PN’s position, declared by Simon Busuttil yesterday in front of Parliament, very relevant. These contracts and agreements will bind not only Muscat’s rudderless government: they will bind all future governments. Remember that the BWSC plant has been sold to the Chinese corporation forever. As Busuttil stated, the market should be left open and government should not bind itself to buy extra electricity from any supplier. It should leave future governments free to buy electricity from the cheapest offered supply.
The Prime Minister is insisting that the important thing is that electricity tariffs have been reduced. But we are not as stupid as Muscat expects us to be. That, however, is not what is important. That was the easy bit. The important thing is how that is going to be financed now that his grand plan has stalled. And he, of all people, should know that. If the new power-plant and the plan with which he bound himself to before and after the election are either not going to happen or are deemed unnecessary for the tariff reductions, he should keep his word and resign. Otherwise both him and Konrad Mizzi are simply not to be believed any more.
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