Opposition calls for second combined cycle power plant

Opposition utility services spokesman Louis Buhagiar yesterday appealed to the government and Enemalta to quickly decide on the building of a second combined cycle power generating plant to ensure that the fast growth in the demand for power did not overtake power generation capacity.

Speaking in parliament during the debate on the Enemalta estimates, Dr Buhagiar also said it would be a "historic mistake" if Malta did not avail itself of the opportunity to link up with the gas pipeline to be laid between Libya and Italy.

Dr Buhagiar said that while Enemalta had to ensure that it always had enough generating capacity, it was also important to educate the people to use the most energy efficient methods not just to keep costs down but also to protect the environment.

Dr Buhagiar said it was regrettable that the more efficient combined cycle generators were not installed in the first phases of the building of the Delimara power station.

It was now important for a decision to be taken quickly for the installation of a second combined cycle plant so that it could be commissioned by 2005, when demand was expected to reach current production capacity.

Greater attention also needed to be given to Marsa power station, which produced some 40 per cent of power output. Some of its boilers needed be replaced with more modern, environmental friendly ones.

That the corporation was using fuel with a lower sulphur content was welcome but it was not enough. The government was bound, through its agreement with the EU to upgrade the Marsa power station to meet EU standards, but where would Enemalta get the funds it needed for that purpose?

Improving generation capacity needed to be matched by improvements to the distribution system. That little emphasis had been made on the latter was demonstrated by power cuts in various localities which had drawn stiff criticism from industry.

The government now seemed to be realising what had happened but it was acting too slowly. Work on the Mosta distribution centre and the gallery between Delimara and Marsa, for example, were dragging along too slowly.

Dr Buhagiar said the imposition of VAT on electricity and gas did not make sense and this measure had been introduced solely at the behest of the EU.

It did not make sense for the government to say Enemalta would absorb this VAT charge and be compensated by other measures as it was the consumer who would eventually be burdened with such expenses.

The government's decision to float fuel prices according to international market conditions had led to the cost of fuel being raised five times last year and had instilled uncertainty for industry.

It was important for the future to seriously address the use of alternative sources of energy, such as the sun and the sea. Enemalta had never given this sector any importance.

Now it had been announced that Enemalta would waive the Lm70 new connection charge where solar heating had been installed. This was a positive measure which followed others taken up by the Labour government.

It was positive that import duties on energy efficient bulbs had been reduced as part of the budget measures but it was important that the people were educated on the use of such apparatus.

It was also important to introduce a system where imported electrical equipment was labelled to show whether it was energy efficient or not.

Importance also had to be given for new houses to be built in an energy efficient manner.

Turning to the power factor, Dr Buhagiar said there still was a big difference between the use of energy during the day and the night. This meant that the corporation had to invest heavily to meet day demand and have its equipment idle during the night. This was a situation which needed to be remedied, particularly through talks with the heavy industrial power users.

Dr Buhagiar said he looked forward to the transfer of the gas bottling plant to Benghajsa from Qajjenza, thus removing the danger posed to neigbouring residents.

It was important for the country that gas was used for at least part of power generation. Many European countries had already moved from oil to gas. With two friendly neighbouring countries, Libya and Italy, about to lay a gas pipeline between them running just north of Gozo, it would be a historic mistake if Malta were not to link up with it, especially as Malta would not be able to meet the $160 million cost of having a gas pipeline from Sicily.

Dr Buhagiar said that because of EU demands, Malta would have to spend some Lm16 million to increase its fuel storage capacity to 90 days , even though Malta did not have the EU's problems with oil producing countries.

With EU membership, Enemalta also faced the risk of liberalisation and competition in its profitable sector, which was the sale of fuel, thus further burdening the country.

Indeed, Enemalta's financial situation was already disastrous, with debts of Lm115 million but the government was insensitive to the situation.

What did the government mean when it said that it was "averaging" when buying fuel? Did this mean a return to hedging after this practice, used at the time of the Labour government, had been so strongly criticised by the minister in the past?

Referring to Prof. Bonnici's remarks that at the time of the Labour government it was said that the corporation had 500 surplus workers, Dr Buhagiar said that in 1996, a study was undertaken on restructuring and increasing productivity but this did not envisage loss of employment.

Concluding, Dr Buhagiar said that councils were not at all satisfied with the level of cooperation they found from Enemalta.