The deal with Shanghai Electric Power will be concluded shortly and the contract will be tabled in Parliament in the coming days, Energy Minister Konrad Mizzi said today.
Dr Mizzi was speaking at a press conference shortly after announcing in Parliament that the new gas-fired power station will be operational by June 2016.
The Energy Minister said the new timeline is based on responsible choices. The energy sector now stands on sound footing. When the PL was elected to power it was in total disarray. Debt had exploded and the corporation had racked up a huge bill in unpaid excise taxes. The due taxes have been paid, the Minister said, and the government will recover the money once the cashflow deal with SEP is signed. The corporation will also be halving its debt. The government now has the necessary financing to convert the BWSC plant to run on gas.
Dr Mizzi said the interconnector will be commissioned in the coming weeks and Malta will be in a position to import energy early next year.
Bills for households were reduced last year and will be reduced for industry in March, injecting €80 million into the economy. "The turnaround was made possible in a shorter than expected timeframe because of good decisions taken by the government. Converting the power station to gas would have allowed us to reduce tariffs but would not have addressed the debt problem in a short time. The agreement with SEP made that possible and also led to an important cash injection in Enemalta."
The government needed to align the SEP and Electrogas strategic projects. The Minister said he opting for a lengthier process that would achieve better results. Having two plants also ensured security of supply in case one of them suffered damage.
Dr Mizzi said the "final closure" on the deal with SEP will be carried out in the coming weeks. The gas timeline was reviewed and aligned with the closure of this agreement and the delay will not have a negative impact on government finances, he said.
Site preparation and clearance works at Delimara were complete and the specially made LNG pumps have been ordered. The LNG conversion plant is also on order and the gas-fired plants are being built by Siemens in Sweden. Mr Mizzi said the controversial Maritime Study is almost ready and the interim results were positive.
The Energy Minister said the BWSC and Electrogas plants will be completed together. Enemalta will not be bound to buy all electricity generated by the BWSC plant or the Electrogas plant. "We will have the efficienty to switch between plants. Options vary according to economic criteria and security of supply."
The Minister said the price for energy from BWSC will be similar to that of Electoragas. Pricing will be announced shortly. The pricing and conditions with Electrogas will be disclosed in a separate Parliamentary debate.
Replying to questions by this paper, Dr Mizzi said the interconnector alone would not have been sufficient to reduce energy tariffs becase the prices were not low enough.