Labour’s ‘cheaper-energy’ plans cost party €100,000

According to Labour sources, Labour's plans to reduce energy tariffs represent an expenditure by the party of roughly €100,000.

The plan, unveiled on Tuesday morning on the second day of the 2013 Election campaign, pledges potential savings of €187 million in Malta's energy generation costs.

Through this plan, which involves the full conversion of the Delimara power station to gas-fuel from the current operation of heavy fuel oil, Labour is guaranteeing a 25% reduction in the burden of energy tariffs by 2014

Labour's plan to reduce utility rates is based on the supply of gas through the development of a liquefied natural gas terminal, with a regasification facility, if funds arrive from the EU.

Labour has placed considerable emphasis on how its plan is based on a focus on gas fuel, which includes the construction of a gas pipeline to Europe; the interconnector to Sicily for the provision of electricity, and a major push towards renewable energy.

The viability and sustainability of the announced project was also vetted and directly endorsed by energy consultancy firm DNV Kema, which also happen to be Enemalta's consultants.

Labour sources also say that despite how DNV Kema is also the government's energy consultant, Labour's collaboration with the energy consultant dates back to before the government started working with the firm.

The conversion of the BWSC turbine at Delimara to gas from HFO will cost €68 million. Another €142 million will be invested in the LNG terminal.

The combined €376 million capital cost is close to a feasibility study conducted by the finance ministry which claimed the cost of Labour's plan would be €350 million.

The use of the Malta-Sicily energy interconnector will be retained, Labour candidate and energy consultant Konrad Mizzi said during the proposals' unveiling, allowing for an energy cost of 0.096 cents per unit.

"This will give us savings of €187 million a year, reduce emissions, ensure the close of the Marsa power station and a portion of the old Delimara power station, and the removal of the large chimney from the Delimara skyline, as well as the end of heavy fuel oil," Mizzi said.

Mizzi also said the financing of €376 million would be done through public-private partnerships.

"Enemalta will only convert the BWSC plant to gas, but private companies would focus on the new part. There are sufficient savings to enable this, and Enemalta will not be privatized," Mizzi said.

"We hit the ground running in May 2013, with a tender for a 10-year fixed-term electricity contract. The savings will allow us to give €77 million in tariff reductions and pass on €110 million to ensure the sustainability of Enemalta, a fair private sector return, and the repayment of debt through the special purpose vehicle."

Mizzi said the eco-reduction and energy benefit mechanisms will be retained.

The Labour Party has presented its plan to reduce electricity bills, in a strategy widely believed to adopt the use of gas importation through an offshore gas tanker depot.

The party says its plan is "affordable, reliable and clean", and will push for the conversion of the Delimara power station's fuel from heavy fuel oil to gas.