Enemalta to start competition for gas power station and terminal

The Maltese government will issue an international expression of interest for a power purchase and gas supply agreement on 11 April, as part of the process towards the construction of a new 200MW power station at Delimara.

The new power station, a key plank of Labour's electoral campaign, will use liquefied natural gas (LNG) storage, re-gasification and a natural gas supply infrastructure and a combined-cycle gas turbine (CCGT) electricity generating plant.

"This new source will reduce Malta's dependence on electricity produced from oil, and will result in corresponding reductions in both electricity costs and environmental emissions, in line with the European Union roadmap," Enemalta said.

Enemalta Corporation will run a competition for the new energy contracts. The EOI and a request for qualification will be followed by a request for proposals.

Parliamentary secretary for MEPA Michael Farrugia today said that the application process for the new power station was expected to be fast-tracked by the planning authority.

The new energy supplier will be required to supply approximately 200 MW from a new gas-fired CCGT plant and corresponding LNG facilities, which may also supply a further 150MW from the existing Enemalta plant - Delimara phase II - which will be converted to run on natural gas.

In the following months, investors will be pre-qualified and then invited to bid competitively to enter into a power purchase agreement, or a gas supply agreement, with a pre-condition to build, own and operate their gas and power plants at the Delimara site to be fully commissioned by spring 2015.

For the last 10 years, there has been an upward trend in the consumption of electricity on the Maltese islands, although a short term decrease in consumption coincided with a period of economic contraction in the period of 2008-2010. The Maltese economy is now projected to continue to grow and this is expected to be accompanied by an increase in electricity demand.

Malta is dependent upon imported fuel oil, which energy minister Konrad Mizzi said results in high marginal costs for power generation. Malta is required by European Union regulations to implement directives related to combustion emissions. "This project will further fulfil Malta's obligations towards the European Union Energy roadmap and underline the government's commitment to cleaner, cheaper energy for the Maltese Islands," Mizzi said.

Delimara currently runs a 150MW plant using heavy fuel oil, while a 200MW interconnector to Sicily will be completed in 2014. The older power station at marsa is expected to be decommissioned as well as the older steam turbines at Delimara (phase I).

Mizzi said that by spring 2015, the baseload power will be supplied by the 200MW gas-fired plant, whose fuel will be received through a LNG terminal that must be constructed and will be operational in time to supply gas to the new generating plant.

The LNG facilities may also provide natural gas to the existing 150 MW HFO fuelled internal combustion power plant, which will eventually be converted to operate on natural gas. Although these facilities will be located onshore at Delimara, consideration will also be given to bidders which present alternative solutions in which at least a part of the LNG Facilities is installed on a floating platform to be moored close to the Delimara Power Station.

The Maltese government believes at least 60,000 cubic metres of LNG will be needed to serve the existing Delimara plant and the new CCGT plant, with a project monthly gas average of 15.6 estimated that a storage capacity of approximately 60,000 m3 of LNG will be required to serve both the existing 150MW plant and the newly constructed CCGT plant, however alternative proposals may be considered.

The successful bidder will be asked arrange the design of both the CCGT and LNG Facilities such that waste heat from the CCGT is used in the re-gasification of LNG. Once the new plant is operational, the older Delimara steam turbines will be decommissioned, while the Delimara phase II plant will remain oil-fired together with some smaller oil-fired circuit gas turbines as back-up.