The unattributed piece "More trouble for Malta's energy prices in store as EU seeks to harmonise taxes" presents a number of dubious assertions and a title which goes against the grain in the second part of the article.
Starting with the second part headed in red "Government to buy energy from new power station at 'inflated tariff'", two prices for electrical energy on the European market (EEM) are quoted: a peak rate of 4c.3/kWh (not KW, please) and a base price of 3c.643/kWh. The remarkably low rates quoted prompt questions as to source: high or low levy, renewable, nuclear or fossil fuel? Source characteristics influence level and stability of price. Renewable sources like wind, for instance, while cheap, have a variable availability. But another more oblique question is also relevant: why is Sicily not making any use of some or all of this cheap power, rather than persisting in generating its own using gas and "oil"? If this power can "arrive" at Maghtab now or in the next couple of months, then it can "arrive" in Sicily.
In 2011, ENEL was selling power in Sicily at 19c/kWh. Allowing for 25per cent VAT, that would mean a 14c/kWh basic rate, and with 4c-5c profit a 9-10c cost/unit. ENEL complained that the limited capacity (250MW) of the Italy-Sicily under-sea IC was forcing a price differential of some 3c/unit between mainland and Sicily rates, a difference that is expected to diminish when the new 450MW IC comes on stream. No mention of availability of very low rates on the EEM was made.
The problems of tax harmonisation ─ quite apart from the others connected with actual grids ─ mentioned in the first part of the article strongly suggest that declarations about "cheap power" from the EEM being "available" at Marina di Ragusa on the Malta IC D-day are premature in the first instance, and can also be only partially correct at best. For with a 200MW IC, we have to have other local generators, a point originally made in Gordon Cordina's 2011 cost benefit analysis of the then projected Delimara1-BWSC-IC power station.
With Delimara1 (HFO) 120MW steam to be substituted by 200MW CCGT (cost 9.95c/kWh), BWSC piston engines (initially HFO and later natural gas) with an as yet unknown power price (and requiring a fallow period for conversion to gas) and, despite an approaching start date for the IC and no public information on IC prices, it is difficult to fill in credible detail on the energy prices we will be facing even if it's quite easy to sketch out a worst-case scenario.
Over all such speculation lies the shroud of the Enemalta usage plan. Minister Mizzi's remarks about having reached 'agreement' with Shanghai Electric and about buying all the Electrogas energy have not really helped us to see under the shroud. His promised 'disclosure' sometime soon may remedy that.
E.A. Mallia
Attard