The Government has asked for a full feasibility study from Norwegian firm Sargas, which is offering a €1 billion coal-fired power station.
A pre-feasibility study by KPMG still left many questions unanswered, the Government said in a statement, in which it revealed it had asked the company for a fully-fledged feasibility study if it wanted Enemalta Corporation to continue to consider the project.
Introduced to the Government and the Opposition by former EU Commissioner John Dalli in 2010, Sargas proposed the development of a new coal-fired, barge-mounted plant that would be dry-docked at Marsaxlokk Bay.
The €1 billion plant would be paid off over a period of 30 years, during which time it would supply a steady stream of cheap energy which could even be exported, according to the proposal.
The issue had become a political hot potato when the proposal was first revealed by Mr Dalli with the Labour Party accusing the Prime Minister of ignoring the proposal and the Government hitting back with the charge that the PL wanted to go back to a coal-fired power plant.
In its preliminary study KPMG identified six major issues which need to be assessed in more detail before discussions could go further. The questions concern the particular type of technology to be used, based on carbon capture, and a number of environmental issues related to the location of such a plant in the middle of Marsaxlokk Bay.
Although according to Sargas the technology is already in use, KPMG said the carbon capture component, which is pivotal for the project’s viability, should be studied further.
Many studies, including those by the European Commission “indicate there are a number of factors including public acceptance, adequate carbon pricing, as well as the need to prove that carbon capture can work on a large scale” which need special attention.
On the environmental impact of the proposed plant, the KPMG study reveals a number of problems, including those related to “the storage of Co2, biopaste and coal as well as any negative aesthetic impact; impact on wave formation, flora and fauna, and marine topology, noise pollution and possible odours.”
The Government said that due to the length of the period covered in this proposal, “there is a degree of uncertainty about future developments concerning elements that are integral to this proposal” which requires Sargas to provide a full feasibility study to analyse and address the major issued outlined by KPMG.
The Government said it could not publish the entire study without the consent of Sargas due to a non-disclosure agreement.