Labour cannot change the way Malta produces electricity without raising taxes, according to the Minister for Finance, Tonio Fenech.

In a clip aired during a press conference, Konrad Mizzi clearly said that PL would not increase subsidies, leaving the only option for converting the power station into an alternative energy solution by next year, not doable.

The Ministry said that there is a possibility for utilizing these alternative solutions but would take time and/or money.

Sargas, which is a coal-fired plant, for example, is possible and the Ministry of Finance is looking into it, however would take a minimum of five to seven years to implement. If this is implemented, however, would be less than if using gas.

The process of changing to natural gas is also a possibility, but would cost €334 million and Malta would not start to see the fruits of its labour for five to seven years. The government is currently seeking EU financing to conduct this project once the EU budget is revised in 2013. What Labour hasn’t said is that a pipeline to bring the gas from abroad would not happen overnight.

The Ministry also looked at Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG), but these solutions bring complications and would not be viable.

The quickest solution would be the Interconnector and that is why government is investing €200 million to import energy, the Minister said. This cable will give Malta a more stable and efficient power source.

At the end of the conference, it was said that, given the above information, Labour’s plan to create alternative energy without raising taxes or subsidies is, impossible.

It was also announced that early indicators show that the subsidy level for the power station will remain roughly similar to this year at €25 million.

PL reaction

The Labour Party said that the Minister responsible for energy, for which government does not have a policy, is not credible when attempting to give lessons in this area. He is the Minister responsible for purchasing a power station from BWSC which burns heavy fuel oil and for which the country paid €157 million and it is still inoperative.

The PL said that it would be better for Tonio Fenech to wait for its electoral manifesto which will be published on the same day as the PN. Labour added that Minister Fenech should explain how he is in agreement with the European Union to increase energy prices after the elections according to the European Autumn Economic Forecast.

Dr Konrad Mizzi reaction

Malta’s electricity tariffs are much higher than those of our European Union counterparts and this is putting a lot of pressure on both households and industry. The current situation is a direct consequence of the poor choices made by the Gonzi administration. The Prime Minister had the opportunity to invest in a clean gas power station which would have resulted in lower tariffs and more importantly a  significant improvement in our health and well-being. However Dr Gonzi’s choice was that in 2012 Malta commissioned a power station fueled by heavy fuel oil after changing the country's environmental legislation. By making an exception for this dirty fuel Government sold the health of Maltese children in favour of air pollution and an economic future tied to international oil prices.

Government is also currently commissioning an electricity cable between Malta and Sicily. While this is a positive development we are disappointed that the Government does not have a robust commercial plan to procure electricity from Europe. Government has invested €200 million and does not have an indicative price for buying electricity over the cable. This was admitted by Tonio Fenech on a TV programme earlier this week. Minister Fenech also admitted that Government’s plans for Wind energy which account to 40% of our clean energy target are failing. These Government failings were clearly exposed by the PL’s representative, Dr Konrad Mizzi on the TV programme Close Up earlier this week. Partit Laburista persists in its question to Government about the unit cost of electricity supplied by the inter-connector when it is finally operational.

Partit Laburista will provide leadership to address our energy challenges.  We will reduce the cost of electricity generation to ensure that this is competitive with other European nations. Such an improvement in the cost of generation will in the future reduce the need for Government subsidies to Enemalta. Lower cost of generation will allow us to focus more investment in fields such as education and health. We are saddened that Tonio Fenech has given up on making Enemalta competitive and his only response to our energy challenges is to provide subsidies to Enemalta which only alleviate a small proportion of the pain the tariffs are causing to our economy. This does not address the core problem which is the cost of electricity generation. Moreover his plans to increase electricity tariffs after the Election were also recently exposed by the European Commission’s Autumn report on Malta.

Clearly Minister Fenech is in panic mode and is worried about the prospect of credible proposals which will be proposed by the PL. The PL has a credible plan to address our energy challenges which will be an integral part of our electoral manifesto.   Partit Laburista will reduce energy costs for families and businesses and in doing so, will restore hope through economic growth and prosperity for all.