Updated 10.30am with OPM reaction
Power supplied to Enemalta by China's Shanghai Electric in 2015 has cost Enemalta at least twice the price paid to acquire power from the interconnector during the same year, Times of Malta is informed.
Audited published accounts by the Chinese company D3 (Delimara3) Generation Ltd show that Enemalta paid the owners of the former BWSC plant 14.5 cents per kWh (kilowatt-hour) of energy it was provided in 2015.
Meanwhile, according to publicly available information, Enemalta paid an average of between three and eight cents per kWh during the same year for electricity it imported through the interconnector.
Sources close to Enemalta said that during its first 16 months of operation, until the end of 2015, Enemalta paid the Chinese company €27 million for its services, with the Chinese company declaring a profit of €20 million. All the D3 revenue comes directly from Enemalta.
Although Enemalta does not want to give any details on how much energy it acquired from the Chinese, citing commercial sensitivity, NSO statistics show that during 2015, Enemalta was provided with 392,000 MWh of energy from the BWSC plant, amounting to 28 per cent of all its annual needs.
“An analysis of all the publicly available data shows that the cost to Enemalta for every kWh of energy provided by the Chinese company was very high, especially when compared to how cheaply Enemalta is procuring electricity through the interconnector,” a senior Enemalta official said on condition of anonymity.
It paid €27 million in first 16 months
"However, this is the price Enemalta has to pay to cut its long-term debts and produce healthy accounts," the official said.
"The government sold the Chinese its most efficient plant at the time while guaranteeing a steady income to the Chinese to recoup their investment in a short time. In the meantime, Enemalta could slash millions from its books," he said.
Times of Malta is informed that according to the contract signed between Enemalta and Shanghai Electric, and which was heavily redacted by the government when published, Enemalta is not obliged to buy all the energy produced by the former BWSC plant.
Instead, Enemalta pays fixed amounts to the Chinese to make plant available, independent of how much energy they procure.
The same system is adopted with Electrogas – the natural gas plant built by the Gasan and Tumas groups and foreign shareholders to supply energy to Enemalta.
“[The Chinese] will be paid for making their plant available, and this is the major component of the agreement, from which the real profit comes.
“Enemalta will then pay also for the maintenance cost and the fuels costs used according to how much energy is actually supplied,” Enemalta officials said.
Asked to confirm that the cost of electricity supplied by the former BWSC plant was much higher than those of the interconnector, a spokesman for Enemalta refused to reply.
He said that the cost of 14.5 cents per Kwh was “way off the mark”.
However, when asked to state the cost paid by Enemalta for every kWh obtained from the Chinese plant in 2015, it did not reply.
Asked to state whether it made more sense for Enemalta to keep running the BWSC plant itself so that it could offer lower electricity tariffs to consumers, Enemalta also did not reply.
Last month, Times of Malta reported that the Chinese are currently making €41,000 in profits a day from the plant bought from Enemalta.
Claims are wrong, figures misinterpreted - OPM
In a reply this morning, the Office of the Prime Minister said the claims made in the report were "totally wrong" and had misinterpreted the NSO figures.
The OPM said the actual figure of electricity produced by Delimara 3 was double that quoted in the report.
"The report conveniently chose not to mention that Enemalta is paying a cheaper price for electricity generation through natural gas, when compared to electricity generated by oil. Not only is the country saving on costs, but it is also being spared tons of toxic waste which used to be produced by the same plant."
The OPM said it would be good if the experts being quoted in the report were made public and came forward for a discussion to realise they were wrong.
"The government is very concerned about the irresponsible way the Opposition is speaking about the energy sector, putting forward erroneous arguments, which if put into practice, would leave the people in the dark without electricity provision for almost 700 hours a year."
A recent report by Standard and Poor's confirms that the only threat to Enemalta is a change of political policy, it said.
Meanwhile, the National Statistics Office clarified that it publishes the total electricity generation from the power plants and the interconnector, however, no information is given with regards individual power plants because it falls within NSO's "confidential criteria".