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Is the ElectroGas plant needed?

This article was published in Malta Today on Sunday 23rd October 2016 
(http://www.maltatoday.com.mt/comment/blogs/70916/is_the_electrogas_plant_needed#.WBNsVuF97m0)



The government claims the new gas power station and consequently, the floating storage unit (FSU) providing its gas supply, are required for two reasons: reducing our air emissions and our energy bills. But do these claims hold true?

Let’s first take a look at our current energy supply.

Eliminating the Marsa power station, which has now been decommissioned thanks to the interconnector, and the Delimara phase 1 steam turbine which the government announced it will dismantle, we have: an interconnector joining us to the European grid, supplying up to 200MW of electrical power, the BWSC plant (144MW), and Delimara phase 2 and Delimara phase 3, which together provide another 180MW of electrical power.

This means our total energy supply can reach up to 524MW.

And what is our energy demand?

Statistics published by Enemalta show that our base load is of around 200MW. This is the amount of minimum generating capacity needed 24/7, and the minimum load needed during the night for around nine months of the year. For the other months, the minimum load during the night goes up to around 250MW. During the day, this increases, up to peaks of less than 300MW for around two months, 330-350MW for most of the months, going up to 420MW in some days during the summer months.

Based on NSO statistics published a few weeks ago for the months of May to December 2015 – the first full nine months in which the interconnector was providing electrical power – Enemalta operated the interconnector at close to its full 200MW load at 90% of the time.

This means that for these past months, we relied on the interconnector for our 24/7 base load, with the BWSC power plant being switched on in stages for the extra load during the day and during the summer nights. Keep in mind that the BWSC plant is made up of eight 18MW turbines, which can be switched on in stages.

So if for example, during a particular night electricity demand does not exceed 220MW, supply can be provided by just the interconnector and two of the BWSC turbines. There is no need for the full plant to be in operation. This modular composition of the BWSC plant and its efficiency meant Enemalta could save millions in fuel costs, and the country could be spared unnecessary emissions.

This shows that apart from the summer months, the interconnector and the BWSC plant can provide for most of our energy demand, with the phase 2 and 3 turbines at Delimara being used during days with high demand.

It is evident that from a purely supply-demand perspective, the new 200MW ElectroGas power station is not necessary.

Now, how is the picture going to change once this new power station starts operating?

Up until now we know the government has bound itself to buy the full 200MW generated power from ElectroGas on a take-or-pay contract. It is important to note that in contrast with the BWSC plant, this new plant is not modular and cannot be switched on or off in parts. Even slightly reducing its output to 180MW will see it suffer a huge drop in efficiency.

This leads to the logical conclusion that once this new plant starts operating, it will be providing the continuous 24/7 base load for our electricity demand.

Additionally we can assume that, given that the Chinese bought the BWSC plant and converted it to run on gas, they have an agreement to sell its generated electrical power to Enemalta, for their investment to be worthwhile. 

So if our country has bound itself to buy its first 344MW of electrical demand from ElectroGas and Shanghai Electric, this means that the current cleanest and cheapest source of energy, the interconnector, will be kept switched off for most of the year, except for the high demand summer days. And given that we have to invest in more renewable energy sources to meet the EU’s 2020 targets, these peak demands will also be going down, further reducing the need to increase our peak energy supply.

What this means, in essence, is that while NSO statistics for last year confirm that the usage of the interconnector for 70% of our energy demand led to the single largest drop in CO2 emissions ever recorded, a massive 48% drop, replacing this base supply with the new ElectroGas power station will lead to an increase of our CO2 emissions over last year. Because although gas is cleaner than HFO, it is definitely not cleaner than the interconnector, which provides electricity being generated somewhere else.

Costs

It is evident that electricity prices over the interconnector, varying between 3c to 6c per unit, are much cheaper than the 9c6 we have bound ourselves to pay for each unit generated by Electrogas.

Moreover, given our electricity demand profile, we will not be using the interconnector during the night, which is the time when its prices are cheapest. 

Apart from this, buying electricity over the interconnector in bulk and over long periods, as we did during these past months, usually results in much more competitive prices than buying small amounts for small periods, as we will be doing once the new power station is in operation.

All of this leads us to the conclusion that the new power station and its tanker are totally unnecessary in terms of electricity demand, and will actually lead to higher CO2 emissions, and will make further reductions of electricity tariffs more difficult. 

No wonder everyone is asking who exactly will benefit from the new power station. No wonder everyone keeps mentioning the fact that the Minister and the Chief of Staff who negotiated all these agreements, together with a mysterious third person, have opened secret companies in Panama and tried to open bank accounts to hold an initial £5 million and a further $1 million annual deposits coming from “consultancy and brokerage”.

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