Energy in Malta – A Hard Task To Balance

Being an island in the middle of the sea and at least 60 km from the European or African mainland, Malta has always had a problem to feed its demand for energy, especially due to the fact that the island lacks any resources of its own. Controversial oil exploration claims have been disputed with countries such as Libya and Italy but with the steep fall in the price of crude oil, such an option has become all the more unviable.

Malta has depended on a fuel fired power station for its electricity needs since the pre-war years. The first one was on the outskirts of Floriana and which has since been dismantled although parts of it are retained in the Valletta Waterfront development. The second one was built in Marsa, and continued functioning until recently when it was closed down, although it is still theoretically on standby. The third was built in Delimara in 1989 although parts of it have now been phased out with a new diesel fired power station built recently and which caused considerable controversy.

One of the main electoral promises made by the Labour Party before its landslide 2013 election victory was the building of a new gas fired power station which would reduce energy bills considerably as well as a cleaner environment. So far though, the project has been mired in controversy and practically nothing has been achieved. A contentious agreement with an Azeri backed consortium named SOCAR has resulted in Enemalta being bailed out to the tune of EUR 300 million – this was done in lieu of the crippling debts that the state owned company faced in recent years. The project includes the mooring of a large vessel in the port of Marsaxlokk with gas tanks providing storage facilities for the new power station but so far nothing has materialised and the project is already a year late of its completion date.

Fuel prices in Malta are also a subject f hot debate, not least due to the ever growing number of private motor vehicles that are consistently reaching record levels. The fuel market is supposedly liberalised but there is in theory only one provider that is Enemed Malta, a subsidiary of Enemalta which provides fuels to the suppliers who in turn provide the various fuel stations with their requirements. A recent scandal that broke out some weeks before the 2013 General Election alleged that various persons were involved in a kickback scheme, although so far nothing has been proved and some persons who were charged have been found not guilty by the courts.

The Maltese consumer has been getting a raw deal at the pumps lately though with the price of oil plummeting to record lows whilst here in Malta it is now one of the highest in the EU, just behind countries such as Italy and Norway. Promised cuts in the fuel price have been few and far between whilst rather minuscule in amounts. The government keeps on harking on price stability but this situation is also making Malta severely uncompetitive where industry is concerned as high energy and fuel bills continue to take a heavy toll on businesses.