28 June 2006

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The energy riddle

Enemalta has just presented its 10 year Electricity Generation Plan, and the message is clear: if nothing is done we will be low on capacity to meet anticipated demand and also be infringing EU environmental obligations
Based on current energy supply and on projected demand in 2010, Enemalta will not have any reserve energy capacity. But problems could start even before that date since after the summer of 2007 the reserve capacity would not be enough to keep the island powered up if one of the larger units at either Marsa or Delimara goes faulty.
Furthermore, to add to this conundrum, Enemalta has to modify existing plants at a hefty cost to meet the strict environmental obligations imposed by the EU.
The country is experiencing a growing demand for energy and the utility company has reached a stage where old plants need to be replaced. The Marsa plant has six boilers with an average age of 27 years, seven steam turbines of an average age of 45 years and gas turbines aged 16 years. We seem to have a retreat house providing half of our energy requirements. The Delimara plant is more recent with two steam units that have been working for 15 years, two gas turbines in operation for 11 years and one combined cycle plant of eight years. These two power plants generate around 495MW in summer and with an annual growth rate of 12MW Malta will reach its existing generation capacity in the next five years.
The Enemalta technocrats who compiled the report also took into consideration the anticipated changes in load demand which will result when the Mater Dei hospital is in operation as well as another two mega projects pertaining to the private sector - the Manoel Island and Tigne development by MIDI and Pender Place. The report also takes into consideration the increased energy demand as a result of the Smart City project at Ricasoli. As a sideline it would be useful to revise the projections if low cost airlines start to operate and the anticipated figure of new tourists shoots up as a result.
In the absence of no reduction in peak demand, the only option is to acquire additional generation capacity at the earliest. Also any future large developments must invest in renewable sources of energy and nationwide we have to embrace energy efficient building design regulations.
The well-prepared and detailed Enemalta report gives an analysis of the various emissions legislation, Malta has to follow. The report also delves into the technical solutions to the problems the island is expected to face. There is a balance of arguments covering affordability, technical, environmental constraints and security issues.
The first directive discussed is the Large Combustion Plant Directive that regulates the maximum emissions for sulphur dioxide, nitric oxide and dust. Keeping a status quo and not reducing the current emissions means that the boilers providing over 40 per cent of Malta’s power generation will have to be replaced in 2010.
Otherwise, the EU Commission may initiate infringement proceedings against Malta. The estimated cost of modifications is Lm11.5 million and an additional Lm2 million in running costs. As if this is not enough bad news, at Delimara we have gone past the transitional period and compliance costs are estimated to be another Lm7.5 million with an additional annual cost of Lm1.2 million.
In these circumstances it is correct to ask why was this national problem not identified before and dealt with in good time. The citizen has been literally left in the dark as to the seriousness of the situation at hand.
It is argued that modifications at the Marsa plant cannot be done by the beginning of 2008. Moreover, Enemalta had committed itself not to operate the Marsa plant for more than 20,000 hours in eighteen months time, and at the present rate of operation, this shall expire in 2010. Now, the country is in a fix and government has to fix it.
Another directive is the National Emission Ceiling Directive and with the current mix of plants in use and fuels, the emission limits for 2010 will not be met. Another regulation entitled the National Allocation Plan which includes the emission trading scheme and the Kyoto Protocol guidelines, gives us some breathing space as we are in line till next year while the allocation value for 2008 to 2012 are still being discussed.
We also have the Gothenburg Protocol to abide with when it is eventually ratified. Here we seem to be within the emissions target albeit at a small margin. Following this detailed consideration of environmental regulations the conclusion is that any new generation plant has to be gas fired. The plan specifies that 300MW is needed by 2010.
The timing of decommissioning equipment must tally with when the new equipment becomes operational and a revised distribution network is in place. Enemalta is not only concerned with the generation issues but has to optimize and improve the distribution network.
The first decision taken is to procure a 100MW local generation plant which has to be up and running by summer 2009. A possible solution for meeting the electricity demand and abide to emissions obligations is a 200MW cable which will connect Malta to the mainland European Grid. However, this is dependent on independent studies being carried out by the regulatory body, The Malta Resources Authority. An alternative to the latter proposal is to have another two combined plants of 100MW each.
The overall cost of these infrastructural projects runs up to a staggering Lm195 million and not all of this bill can be funded by the EU.
Alternative sources of energy, such as wind, waste, and biofuels may only provide limited capacity. However, Enemalta is committed to purchase all locally produced alternative energy provisioning.
A green investment in alternative energy is a socially responsible investment but one has to appreciate that these alternatives are registering commercial viability lately as the price for oil and gas has moved upwards.
The energy riddle needs to be solved and it cannot be treated like the pensions issue. The consequences of not solving the energy problems are immediate and wide ranging. Indeed, we are already in the second half of the first decade of this new century and power outages should be history.

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