OREANDA-NEWS. December 15, 2014. According to new timeframes announced by Energy Minister Konrad Mizzi, Malta will be making use of gas-generated electricity by June 2016. A 200MW interconnector connecting Malta to the European grid will be commissioned in early 2015 as works on the interconnector are in their final stages.

The June 2016 deadline also means that the BWSC plant would have been converted to gas while the ElectroGas plant is up and running.

Around 50% of Malta’s required electricity will be generated by the ElectroGas consortium, while the BWSC plant – to be converted to gas by Shanghai Electric Power – would cater for 30% while the interconnector would provide for the rest of the 20% of the energy mix.

The agreement signed with the Chinese state-owned company does not dictate the energy dispatch that Enemalta should buy from the converted BWSC plant, but it will be up to a technical committee to decide this.

Having landed in Malta from China yesterday afternoon, Mizzi told parliament that the “formal close of the Shanghai Electric Power investment was being finalised”.

No fresh details on the SEP agreement were given, other than that the BWSC will be converted to gas by SEP and that the EUR320 million cash injection in Enemalta meant that SEP would be acquiring a 33% stake in the company.

Addressing a press conference soon after briefing parliament on the new timeframes, Energy Minister Konrad Mizzi said a technical committee would, on an annual basis, decide how much electricity Enemalta would need to buy.

“These would be based on economic criteria, the unit cost of electricity and security of supply which can vary from year to year. Early on, we will be making more use of the ElectroGas plant which is envisaged to be running most of the time. The other two portions will be split 30% and 20% between the SEP plant and the interconnector respectively.

“This mix may change over time depending on the price of the interconnector.”

Mizzi confirmed that Malta was currently negotiating prices with an international company on the interconnection, which include congestion charges that must be paid and losses that have to be shouldered.

The agreement with Shanghai Electric Power, which will see the Chinese acquiring a 33% stake in Enemalta and an investment to convert the BWSC plant to run on gas, should be finalised in the coming weeks. Mizzi pledged that the agreement would be tabled in parliament for debate.

Mizzi said the ElectroGas contract would be disclosed during a separate debate during which the contractual provisions and all the pricing-related information would be published. He cautioned that the publication of such information would be subject to clearance from the consortium’s end and based on legal advice.

The timeline of the conversion of the BWSC plant and the construction of the ElectroGas plant will “be the same and both will work in synch”.

Mizzi said that the formula used to determine the price of energy to be purchased from SEP and ElectroGas was “very similar” with the price variation depending on the efficiency of the plants. Further details will be announced once government announces the final deal with SEP.

Although the new interconnector is built in a two-way system – meaning that Malta could both import and export energy – the government will initially be importing only.