Labour seems to have forgotten the distribution cost of electricity
Published:
January 12, 2013 at 12:45am
While watching the Big Fight on television, a friend who consults in the field sent me a text message:
The 9c6 cost per unit that the MLP is harping on about does not take into account the distribution cost of electricity.
This means that it is a generated unit and not a delivered unit.
The cost of distribution is not as high as the cost of generation, but suffice it to mention that apart from actual cost, the system loses around 7% as technical normal losses. In Malta this is still higher, though – attributed to theft and unbilled units.
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Good point. As the experts pick away at and demolish little Joey’s magic solution, his thugs resort to the old ways. Sad times to come.
I was actually thinking about this. Does Joseph Muscat expect Enemalta to distribute electricity and maintain the network for free?
And Konrad also confirmed that the 9c6 does not include the profit margin for the producing company.
Qeghdin sew!
PL are banking on this sharp sales pitch to get to the public.
They do not need to convince Labour supporters that are yearning and eager for their party to get back in power, and rightly so.
They need to convince the floaters, but have they been convincing?
Making a statement is one thing, backing it up with factual figures and viability is not that easy.
The issue here is that PN needs its dormant and disgruntled voters to actually vote. Will PL indirectly assist PN in urging these possible non-voters to vote….and vote PN?
So now Konrad Mizzi confirmed that the 9c6 is only the cost of production. Let us do some conservative estimates:
10% for distribution losses will increase to cost to 10c6 per unit.
40M€ profit for Enemalta to cover maintenance and repair of the distribution network, wages and pay off its debt (which is an underestimate of course) will increase the cost to 12c4 per unit.
To pay off the 375 M€ investment over 25 years (not including interests) will increase the cost to 13c.
And for all this hassle let us assume that the private investor wants a mere 15 M€ per year (from which it has to cover maintenance and repair and pay wages for its workers). This would increase the price of electricity to 13c7 per unit.
Currently we are paying 16.1c per unit. So Labour’s plan at 13.7c would mean a 15% reduction.
BUT we already have a 25 – 15 % eco reduction mechanism which reduces the price of electricity for the responsible consumer to about 12c1 from 16c1. So where is the 35% saving that Konrad Mizzi calculated.
No wonder that they do not want to issue their workings.
Labour is on a deceit mission.
They are emphasising the number of 9.6 cents in an attempt to lead the electorate to believe that households or business will pay 9.6 cents per unit of electricity.
This impression they are trying to reinforce is not correct.
The Labour Powerpoint presentation is only claiming, without any credibility, that their Powerpoint Station can generate electricity at 9.6 cents.
Then, separately, their Powerpoint presentation states that bills will be reduced by 25% in the case of most households.
This means that the Powerpoint presentation only suggests that the generated cost to the household will come down from around 17 cents per unit to around 13 cents per unit.
It is the figure of 13 cents which is of any relevance to any observer.
Labour’s Powerpoint Station will generate units at a cost to the household at 13 cents, but the household will have to buy those units at the Powerpoint Station. If those units are delivered to the home, they are going to cost around 17 cents anyway.
Smellymara? Messymara.
Have we heard anything from the Minister for the South about this project as yet?
I thought I would see Silvio Parnis debating on Xarabank.
Have they gagged him already?
Will the PL force the private company to do at least one month reliability test (to ensure that it has been constructed safely and is reliable)?
Or will they be in such a hurry to lower the tariffs that will permit the plant to be put immediately online and then all of a sudden it trips or some other emergency/ fault happens and leave half Malta in the dark?
Dear Daphne,
I was in the audience at Xarabank yesterday.
Leo Brincat was accompanied by four henchmen who looked like thugs. I have written a brief account of what happened which you can copy or put in your own words as you feel necessary.I implore you to spread the message.
http://hibernatingfrommalta.blogspot.com/2013/01/the-labour-thugs-are-back.html
Very interesting.
“If energy plan fails, I go” says Muscat – The Times.
http://www.timesofmalta.com/articles/view/20130112/local/If-energy-plan-fails-I-go-says-Muscat.452868
Well, someone should tell him that it has failed already. In fact, it is a disaster.
If after 5 years of planning, this is the sort of plan Labour can come up with, I am out of here.
Will the last one out please switch off the lights?
Why switch them off? With this cunning plan they’ll never be switched on.
On TVhemm, Edward Scicluna admitted that the 9c6 per unit of electricity is the unit cost the new government would be paying for the production of this energy.
He also admitted that the distribution factor and theft factors need to be added.
If these costs add another 25%, the total cost would add up to 12c per unit.
I am actually paying 16c3 per unit less the eco-reduction. That works out at 12c6 per unit. Where would be my 25% saving?
When pressed by Lou Bondi’, Konrad Mizzi claimed that the utility bills will be reduced by an average of 25%.
This claim is being aired repeated on One television. Who are we trying to fool? If water is being reduced by 5% only, how could the utility rates be also reduced by 25%?
Are the rental charges being reduced by 25% too?
If in the negative no one can claim that the bills are being reduced by that proportion. Please treat us as normal human beings and not as idiots.
Jekk irridu nkunu korretti is-savings iridu jitqablu mhux mat-2012 imma mat-2014, meta jibda jintuza l-interconnector.
Anyway, iz-zewg partiti jaqblu mieghu u se juzawh.
Bil-proposta tal-Labour is-savings (skond ic-cifri imsemmija), meta mqabbla mas-2012 (bl-Enemalta taghmel telf ta’ €70+m) ikunu madwar €110m mhux €187m, ghax trid tnaqqas it-telf, ovvjament.
Fit-2013 (jekk l-enemalta tnaqqas it-telf ghal €50+m) is-savings ikunu €90m. U fit-2014 b;-interconnector is-savings jonqos izjed.
Pero minn dan is-savings trid tnaqqas is-€77m li l-LP qed iwieghed li jaghti lura lil-konsumatur (ghax is-savings ikun hemm jekk thalli t-tariffi kif huma llum).
Ir-riskju hu li fil-fatt, meta taghmel is-sommom kollha hemm riskju kbir li tkun qed tahdem bit-telf jew bi break-even.
Minn research semplici jidher li fir-rejalta hemm 2 options ghal powerstation gdida – HFO jew natural gas. Il-gas hi l-preferred option imma f’postijiet remoti, fejn it-trasport tal-gas huwa sfida, l-HFO tkun aktar taghmel sens.
Power station bil-gas hija aktar efficjenti mill-HFO u probabilment tigbor il-kapital qabel, imma jekk il-provista tal- gass ma tiswilekx hafna.
If I produce 100 units and supply 100 people, and charge 10c per unit, what happens when I push for the 10% in alternative energy (as per EU request or directive….call it what you want)?
I am still producing the 100 units whether I like it or not.
Would I not need to distribute the 10 euros between the 90 people instead of a hundred? Not all energy produced is consumed.
Haven’t we seen Konrad Mizzi in another incarnation before?
http://www.makefive.com/categories/entertainment/movies/best-james-bond-bad-guys/jaws