Malta signs €182 million interconnector contract
‘Malta will buy energy from nuclear plants’
Malta will be linked to the European electricity grid by the end of 2013 under a €182 million contract signed by the government and a French company that will be responsible for the laying of the underwater cable.
Nexans will be laying a single alternating-current cable with a carrying capacity of 200 megawatts, linking Marina di Ragusa in Sicily to Magħtab. Here, a new substation will be built, linked to the Kappara distribution centre.
The contract was signed yesterday by Nexans vice-president Yvon Raak and officials from the Contracts Department in the presence of Finance Minister Tonio Fenech and Enemalta’s top brass.
The interconnector would most likely lead to cheaper electricity rates, Mr Fenech said, insisting, however, it all depended on the contracts signed with electricity generation companies once the cable became operational.
“The cable gives us the opportunity to buy electricity from the much larger EU market, which may be cheaper than if we had to produce it ourselves. However, the advantage is that, for the first time, the country will have an energy mix that is partially generated domestically and partially obtained from abroad,” he added.
He said the infrastructure that would be built had the potential of accomodating a second cable in the future.
“One cable is deemed enough to cater for the economy’s needs for the foreseeable future,” he said.
The interconnector and the extension to be built at the Delimara power station are vital developments because they will provide the additional energy required to substitute that generated by the Marsa plant, which must be closed down in two years’ time.
As a result of the interconnector, Malta will be able to buy electricity from nuclear power plants abroad, which pollute less than those run on fossil fuels, or from plants running on renewable energy. This would help the island reach the EU’s emissions targets.
The cable is expected to have an underwater route length of 95 kilometres and will be laid in sea depths of about 160 metres.
Enemalta’s chief technical officer, engineer Peter Grima, said the interconnector would enable the corporation to re-energise the island immediately if a total blackout occurred.
A cable connection to the mainland was important, he added, if Malta were to develop large scale alternative energy plants such as wind farms.
Mr Fenech said 50 per cent of the project’s cost would be financed by the European Investment Bank, another €20 million would come from EU funds and the rest of the financing from domestic banks.
The contract needed to be signed before year’s end so Enemalta does not lose the EU funding allocated for the project. The corporation will recoup the cost of the interconnector through its tariff structure, which already caters for a return on invested capital.
Nexans was selected because it had the cheapest bid after a second round of bidding. The first call for tenders was cancelled in July. Fresh bids were then requested from four shortlisted companies but only three submitted a bid – ABB, Nexans and Prysmian PowerLink . The Nexans bid was €25 million cheaper than second-placed ABB.
“This project will provide Malta with an economically viable source of energy as well as giving us peace of mind,” Mr Fenech said.