Three weeks after the cancellation of an €18 million power station refurbishment project, the government has conceded that a €100,000 boiler modification implemented in its stead will not be as effective in cutting emissions.
Abrupt project switch typified Enemalta’s lack of transparency
The admission runs directly counter to initial claims by Enemalta, which had said that the low-cost modifications and change of fuel replacing the cancelled project would provide “equivalent emission results”.
Given the massive price discrepancy between the cancelled multi-million euro project and the low-cost modifications Enemalta eventually opted for, the energy company’s equivalency claims had raised expert eyebrows.
Replying to questions by The Times, a Finance Ministry spokesman admitted that emissions results achieved through the €100,000 modifications “are not the same as the results that would have been achieved by the €18 million project”. The spokesman explained that while the €100,000 modification would ensure that emissions from Delimara boilers fell within existing EU legal limits, the multi-million euro project would have resulted in emissions lower than EU targets applicable in 2020.
Modifications have also been accompanied by a change in fuel, with 0.7 per cent sulphur content fuel oil now being used instead of the higher-polluting one per cent sulphur fuel oil.
Switching to the 0.7 per cent fuel - which is also expected to power the new Delimara power station extension – comes with a price premium, although neither the government nor Enemalta have quantified this.
The cancelled €18 million project, first announced in October 2009, was introduced following a report by international energy consultants KEMA.
An Enemalta spokesman declined to share a copy of the consultancy report with The Times, saying it contained commercially-sensitive information.
Opposition utilities spokesman Marlene Farrugia felt that the abrupt project switch typified Enemalta’s lack of transparency.
“We don’t know how, why or even who took the decision to invest in the original €18 million project. All we got was a brief statement stating the basic facts. It’s symptomatic of Malta’s general lack of transparency concerning energy-related matters.”
She argued that Enemalta’s sudden shift from an €18 million project to €100,000 boiler modifications cast a shadow on all its previous investment decisions.
“Enemalta has suddenly discovered that it could save €17.9 million. It makes you wonder whether more money could have been saved on past investments,” she said.
Malta’s national energy provider is notoriously cash-hungry, with its most recent financial statements showing that, in 2009, the company made a €45 million loss after tax.
It has yet to present its audited accounts for 2010 or 2011. The Finance Ministry spokesman dodged questions about the delay, saying simply that Enemalta was working on its 2011 annual report, which would contain its 2010 financial statements.
Energy-related decisions were too politicised, Dr Farrugia said. Slamming existing policies as “piecemeal and lacking in accountability,” she called for revamped decision-making structures within the sector.
“Any investment in the energy sector should be sanctioned by an independent energy commission and be part of a long-term plan, complete with specific timeframes and clearly-explained recommendations,” Dr Farrugia insisted.
Meanwhile, the building of the Delimara extension has been completed and testing has started, Finance Minister Tonio Fenech said in reply to a parliamentary question last night.
He said the testing would include the boilers and the steam turbine as well as the emissions filtering system.
There are 30 days of reliability testing to ensure that the plant meets the environmental standards set in the IPCC permit granted by Mepa.The minister said payments of €157,463,386 have been made to BWSC so far and €8,671,167 directly related to the contract were pending.
No difficulties in testing have been identified so far, he added.