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MALTATODAY 25 September 2022

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2 maltatoday | SUNDAY • 25 SEPTEMBER 2022 NEWS Thank you... for having bought this newspaper The good news is that we're not raising the price of our newspaper We know times are still hard, but we have pledged to keep giving our readers quality news they deserve, without making you pay more for it. So thank you, for making it your MaltaToday Support your favourite newspaper with a special offer on online PDF subscriptions. Visit or scan the QR code Subscriptions can be done online on Same-day delivery at €1 for orders up to 5 newspapers per address. Subscribe from €1.15 a week Same-day print delivery from Miller Distributors mt CONTINUED FROM PAGE 1 However, businesses who will reduce consumption dur- ing the peak hours will also be compensated for loss of busi- ness, through an open compet- itive process – tenders – where consumers bid for compensa- tion for having reduced their consumption. The cheapest compensation requested will win the bid. According to government ex- perts analysing the Commis- sion proposal, the demands could be more onerous for the Maltese: the amount of elec- tricity that must be reduced is 10% over the average baseline of of five winters, from 2017 onwards. But Malta's historic date, which includes the COVID pe- riod where there was already a reduction in consumption – particularly due to the lack of mass tourism in 2020 – has drawn the average demand lower. That would mean Brussels's measure inflicts a further re- duction over an already low baseline, which for large busi- nesses like hotels or manufac- turing plants could also inflict job losses from lower produc- tivity. Malta's energy system is pow- ered by liquefied natural gas, but is converted into electricity and has no distribution system for heating via pipes in winter. Winter peak hours occur in the evenings when demand for heating grows, meaning reduc- ing energy consumption inside government offices through- out the day will not have a big enough impact. Instead it is likely that it will be left to certain industries and large businesses to reduce their operations in order to make up for the overall national reduc- tion. If winter peak consumption reaches 450MW, the 10% cut could be equivalent to the ca- pacity required by around three medium-sized hotels or one large manufacturing facil- ity, that would have to stop op- erations for at least 2.5 hours a day. Cap on LNG price Malta is now pushing for a general cap on the wholesale price of natural gas, along with Italy, Greece, Belgium and Po- land. If successful, this could lead to a reduction in price of LNG, which would in turn impact prices of energy Malta sources from its interconnector to Ita- ly. But the Commission is still studying the pros and cons of the gas cap and will not put for- ward any legislative proposal until the internal assessment is completed. The idea of introducing an EU-wide price cap on all gas imports, beyond Russia, gained traction after August saw re- cord-breaking prices in trading and pushed electricity bills to unsustainable highs. Critics however think a price cap on gas will alienate ship- pers of LNG, who will instead re-route the commodity to other markets. The EU is already attempting to source LNG purchases from other parts of the world to compensate for the loss of Rus- sian pipeline gas. But gas prices have been hovering at around €200 per megawatt-hour – six times the price in 2021. Gas is the most expensive fuel, and it also sets the final price of electricity. A price cap on gas imports would artificially con- tain the price of electricity bills by forcing suppliers to effec- tively turn a smaller profit. But as demand for new gas markets ramps up, suppliers might not be too enthusiastic about such price caps. Brussels plan The Commission's plan is to reduce electricity consumption for households, companies, factories and public buildings. The EU-wide plan would intro- duce a mandatory target to cut demand by at least 5% during peak hours. In practice, this would affect between three to four hours per weekday, the Commission estimates. Peak hours refer to the time of the day when demand in- tensifies and prices reach their highest levels, particularly due to the influence of gas-powered plants. Countries will be allowed to identify their own peak hours, which usually take place be- tween 7 am to 10 pm, and de- sign their own measures to en- courage the reduction. In addition to this, a volun- tary target would ask countries to slash overall electricity de- mand – combining both peak and off-peak hours – by at least 10% by the end of March. The Commission believes record-high bills are already pushing consumers to cut down on their power use and the EU-plan would serve to re- inforce the ongoing trend. Businesses will bid for compensation under EU rules to cut down electricity demand CONTINUED FROM PAGE 1 The government has accused Steward of failing to make the necessary investments to re- vamp the hospital facilities and services it took over from former concessionaire Vitals Global Healthcare. And in an uncompromising excoriation of the contract, the National Audit Office said the failures of Labour's privatisation of the state hospitals was down to the selection of VGH as the con- cessionaire, "a poor choice that set the stage for what was to come." But the Maltese government is exposed to a great deal of risk on the Steward concession: an agreement hammered out in August 2019 with former tour- ism minister Konrad Mizzi re- galed it with "escape clause", that turns any termination of its concession into a govern- ment default. In the agreement signed by Mizzi and Steward Healthcare, the government agreed that should the hospitals' conces- sion be terminated by a court of law – for whatever reason, and even if Steward is in breach of contract – such an event would be a government default. That would mean that all debts incurred by Steward would be passed on to the gov- ernment, and the American company would still be liable for a €100 million contractual pay-out for its equity. Steward talks over milestones

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