Updated | €14 million necessary for 200MW interconnector's security of supply

Opposition says failure of government to secure gas plant in time will mean more subsidies for energy corporation to finance tariff reductions

The energy ministry is contesting claims by the Opposition that Malta should not pay some €14 million in obligations for the state utility to ensure security of supply.

“It is a fable to say that the €14 million for security of supply are a subsidy. These are funds for Enemalta to guarantee security of supply according to global and EU norms. Although our coubtry will have three operators for the generation of electricity, it will be Enemalta’s obligation to ensure a reserve of capacity for any eventuality, such as an energy cut in the supply from the interconnector.”

Mizzi said that the increase in this amount was down to the increase from 60MW to 200MW in energy generated from the interconnector.

The Nationalist Party has insisted that subsidies for Enemalta have increased by €14 million to €40 million, and dubbed Joseph Muscat’s energy plan for a new gas plant a “failure” after it was announced that the plant will be delayed by 15 months to June 2016.

“This means that the reductions in energy prices will be paid by the Maltese taxpayer through higher subsidies, and with more debt incurred by Enemalta,” the PN said in a statement.

The patry contradicted claims by the Prime Minister in parliament that an EU Directive obliged the State to forward a payment to Enemalta for security of supply.

“The Directive being referred to gives the government or the regulator the power to impose conditions on operators to have a reserve capacity, and not oblige the State to pay for this reserve, or obligations imposed on operators.

“This Directive has been in place since 2006, and the Maltese government was never under any obligation towards Enemalta, and no infringement proceedings were opened by the EC. This is just an excuse from Joseph Muscat to hide the financial failure Enemalta faces over the delayed plant, which had to deliver €187 million in savings this year, but which now means €234 million in savings will be forfeited by June 2016.

“Muscat has not kept his word when before the election, he placed his political carrier on the line and promised to resign if the gas plant is not ready by March 2015.”

Prime Minister Joseph Muscat yesterday accused Opposition leader Simon Busuttil of being negative, reminding him that he was “part and parcel” of the previous government’s failures, adding that “the opposition still hasn’t learned from its past mistakes.”

“We’re solving the mess we inherited, especially at Enemalta,” Muscat said, rebutting Busuttil’s claim that government had allocated €14 million in subsidies to the carrier.

The government said the €14 million increase in subsidies was a "fable" and that the money was in line with EU directives for Enemalta to ensure security of supply as per global norms.

But Busuttil claimed that the subsidies conflicted with Mizzi’s claim that the tariff reductions will not be paid for by the taxpayer.  “Nothing is as it seems with this government, you must always read between the lines.”

More in National