Labour will appoint energy minister

A new Labour government will appoint a minister responsible for energy, in a bid to implement its €376 million plan to reduce energy bills up to 35% for households and 25% for industry, Joseph Muscat said today.

Presenting his roadmap to reduce energy bills to stakeholders at a business breakfast today, Muscat said that 25% in energy bill cuts he was pledging to businesses would make them more competitive and generate the necessary push to generate jobs.

"If elected, as Prime Minister I will shoulder the responsibility of this project, together with the energy minister."

Muscat also said energy would have a minister of its own, and that a new Labour government would invite the private sector to participate in the generation of energy.

"We will not privatize Enemalta. Our aim is to tackle fuel costs and that is why we will preserve jobs at Enemalta."

He also tried to dispel criticism that a 10-year hedging agreement on gas prices from one company that will build a gas unit at Delimara, would threaten the state's control on energy.

"Our plan doesn't depend on the technology of just one company. Over the years we have been approached by various companies all coming with their own proposals. We didn't want to restrict ourselves to just one proposal or two. And we chose to go for a technology which is tried, tested and proven."

He also said government's claims of having already considered gas were inconsistent with its decision to go for heavy fuel oil, and that he was unfazed by criticism that Labour's was an ambitious plan. "In our opinion and of our consultants this is not true. We are looking at the possible growth and demand. I prefer to be criticized for thinking too far ahead."

Finance minister Tonio Fenech yesterday said Labour's plan for the generation of over 700MW of energy, simply because this rendered a more efficient price of energy per unit, was too ambitious when the Maltese consumed some 450MW at peak periods.

Labour candidate Konrad Mizzi, the energy plan's main sponsor, said in 2012 one unit of energy cost Enemalta €0.18c to produce, of which a staggering €0.16c were related to fuel costs. This meant that last year, €360 million were spent in oil purchases.

Enemalta's debt currently stands at €835 million, while a special purpose vehicle intended to finance the debt will only repay €375 million, Mizzi said.

He also contradicted claims by finance minister Tonio Fenech that Labour's plan, devised by energy consultants DMV KEMA - who are also government consultants - was simple a "desktop plan".

He said Labour's projections were adopted with "a conservative approach. This plan is not built on paper."

Mizzi also said the reduction in energy costs would make the desalination of water by reverse osmosis cheaper, cutting water bills by 5%.

"If we don't act now, utility bills will increase once again - something which has been stated by the European Union. The choice is between joining forces with the private sector and address the utility rates or leaving everything as is and increase the rates," Mizzi said.