New incentive to promote use of solar water heaters

Enemalta is to waive the Lm70 charge for new connections for premises where a solar water heating system is installed, Economic Services Minister Josef Bonnici told parliament yesterday.

He said that some 5,000 new connections were made last year, which, at Lm70 each, meant a substantial income for the corporation, but it was taking this measure to further promote solar energy, with was more environmentally friendly.

A condition which would be laid down in terms of this scheme was that back-up water heating by electricity should kick in only at night. In this way, Enemalta would be able to shift some of its power generation to the lean night hours.

The minister was speaking during the debate on the estimates of Enemalta Corporation.

He said power generated from the power stations had doubled in 15 years to two million MW/h and had power generation facilities not been increased, Malta would now be having very serious economic problems.

Indeed, generating capacity had risen from 235MW to 341MW during that period.

In the past four years alone, power generated had risen by 20 per cent.

Maximum power consumption was now almost equal between winter and summer, consumption in the latter having gone up steeply as more people bought air conditioners.

All this showed the need for the corporation to continue investing in generating facilities and also in the way that generation was carried out. For example, Malta had committed itself with the EU to use cleaner, even if more expensive, fuels for the power stations.

Cleaner fuel was also being bought for use by motor vehicles, with leaded petrol having been phased out and diesel having a much lower sulphur content. Three precipitators had also been installed at the Marsa power station that had substantially reduced the black dust emitted from the chimneys.

Prof. Bonnici said Enemalta's maintenance programme over the past few months included an overhaul of the gas turbines. Changes to the fuel injectors in the boilers of the power stations which would mean fuel savings and cleaner emissions, were currently in hand.

Following two explosions in switchgear equipment over the past year, the switchgear system at Mellieha, which was similar to the one that had exploded at Marsa, had been disconnected and replaced.

In Marsa, a new switchgear room was being built. Since there were no spares for the Marsa switchgear, the former Mellieha equipment was being used as a backup.

Prof. Bonnici said an insurance company had forwarded the money for the submarine cable between Malta and Gozo dragged by a ship's anchor just over a year ago.

Work on the gallery to carry the 132Kv cable between Delimara and Marsa was well in hand but problems had been encountered because of faults in the rock structure to the extent that the boring machine had to be pulled back from the Delimara end to work from Marsa. This was an important project which would give Enemalta the flexibility it needed to shift generation sources when faults occurred.

Plans had been drawn up for two further tunnels, from Marsa to Marsascala and from Marsa to Valletta and the hospital. Running cables through such tunnels protected them better from damage which could be caused by contractors.

Prof. Bonnici said he was pleased to observe that losses in the power system through the distribution system and from theft or meter under-reading had dropped from 20 per cent of total generation to 13 per cent this year, a saving of Lm1.3 million in one year alone. This had resulted from more extensive inspections, with 242 cases of theft having been detected in over 5,000 inspections. At the same time, more than 9,000 meters were replaced.

Enemalta was now adjudicating tenders for the supply of pre-payment meters which were suitable for holiday flats and for consumers who repeatedly fell back on their payments and even had to have their power supply suspended. It was hoped the new system would be installed within two years.

Turning to the gas division, Prof. Bonnici said planning for the setting up of the new Lm5m gas bottling plant near the freeport to replace the one at Qajjenza had been speeded up and it was hoped the project would be completed next year.

The current plant was viewed as posing a danger to residences which had cropped up all around it. It was hoped that steel works for the new plant would be awarded to Malta's own shipyards.

Vapour recovery units were being installed at the petrol tanks in Birzebbuga in line with EU requirements to reduce fuel fumes.

The project to extract oil that had seeped into the ground at the March 31 installation at Birzebbuga, where some of the tanks were over 100 years old, had yielded 75,000 litres of oil and water. This plant would have to be transferred to Has Saptan or near the new gas plant by 2010.

Prof. Bonnici said a study on the feasibility of linking up to a gas pipeline between Libya and Sicily was now nearing conclusion. It appeared that the most technically viable option was not to actually tap into the pipeline through a T-junction, but to have a pipeline directly from Sicily to Malta. An advantage in this option was that should the gas supply from Libya be interrupted, Malta could use gas supplied to Sicily from Algeria. The capital costs were sill being worked out and one had to see if Malta's relatively low consumption levels made such a project financially viable. Since such a pipeline from Sicily would link Malta directly to the European gas network, Malta, as a member of the EU, may also be eligible for EU funds for its implementation.

Prof. Bonnici said a very significant development in the distribution system was the setting up of new distribution centres at Mater Dei Hospital, Valletta, Kirkop, and Marsascala.

He said Enemalta had ended this year with a loss of Lm1.3 million from a loss of Lm3.5m the previous year and was projecting a surplus of some Lm380,000 for the current year. The petroleum division was expected to make a surplus of Lm7 million, but the electricity division was expected to lose Lm6 million and the gas division some Lm500,000.

Rising tensions over Iraq and the situation in Venezuela had pushed up oil prices, but that had been partially compensated by a more favourable dollar exchange rate.

The fact that the price of fuel for motor vehicles was now being adjusted according to international market conditions was yielding better results for the corporation without causing undue burdens to motorists.

The imposition of VAT on gas and power, which was being absorbed by Enemalta, would not affect its financial performance since the corporation could now claim VAT credit and was being given assistance with regard to street lighting and in the introduction of lead replacement petrol.

The minister said that Enemalta made a gain of Lm3 million up to September from a loan swap from euros to dollars in January.

Concluding, Prof Bonnici referred to opposition leader Alfred Sant's remarks on Sunday and said Enemalta would be positively affected by EU membership. It would take on the EU's emission and fuel standards and would be eligible for structural funds to develop its facilities.

Liberalisation would lead to more efficiency for the good of the country and there would be no difficulty for the corporation to upgrade and become more efficient. It was worth noting that the EU had recognised that Malta had a small, isolated power system, and EU criteria could not therefore be automatically applied here.

Indeed, it was worth recalling that it was under the Labour government that workers' jobs were put under threat after the then chairman said that Enemalta had 500 excess workers. The number of workers had since fallen by several hundred through natural wastage.

When he spoke during the winding up of the debate, Prof Bonnici agreed that with time there should be further liberalisation, particularly with regard to fuel importation but also possibly in other sectors of Enemalta's operations. But there were areas where liberalisation would probably not be possible, such as in distribution.

Remarks by the opposition spokesman on utilities, Dr Louis Buhagiar, are being carried separately. The estimates were approved after a division, the opposition voting against.

The gas bottling plant, which is to be relocated to Benghajsa