Liberalisation in the energy sector

"The challenge to industry will be to satisfy the demands of marketing while maintaining cost effectiveness and reducing any possible environmental impact. There are no easy solutions to these problems, but striking a balance between all of those demands would enable all of us to meet the challenge," FOI council member and environment committee chairman Godwin C. Micallef told a seminar organised by the Reggie Miller Foundation on May 19, which aimed at disseminating knowledge on the reforms in the energy sector envisaged in Malta and in the EU.

During Mr Micallef's presentation, which focused on the liberalisation in the energy sector, the FOI official explained that, while Enemalta Corporation had nothing to do with the liberalisation process, this process included the possibility of interconnection with European mainland, as well as energy efficiency and renewables. He stated that among its objectives, the authorities were seeking to create a fair and level playing field. Yet the FOI questions the criteria on which fuel prices will be regulated.

In view of studying more efficient and effective use of energy sources particularly due to the increase of fuel prices, Mr Micallef stated that the FOI and the Malta Resources Authority (MRA) had established a joint committee, which unfortunately had held its last meeting some months ago. He also pointed out that, although the FOI committee members had raised various points, the FOI had, as yet, not been given a reply on the outcome of discussions held between the MRA and Enemalta on these points.

After referring to an initiative being conducted by the UK Government on energy efficiency, Mr Micallef presented some FOI recommendations to encourage energy efficiency including the provision of subsidised or free audits for energy efficiency; higher incentives for use of electricity during off-peak hours; the possibility of variable tariff systems and higher threshold for night use of power; as well as the capping of the surcharge per company rather than per meter.

He reported that the authority was seeking to reduce bureaucracy, direct regulation and supervision, as well as to steer industry to self-regulation. However, the FOI questions how these, as well as the need for a one-stop shop approach, can all be reached when regulation involves the co-ordination between many authorities including the MRA, MEPA, the Occupational Health and Safety Authority (OHSA), the Transport Authority (ADT), the MSA and the Customs department.

As to quality checks, the FOI official recommended that the MRA should revise its paper on proper marking of fuels and different dyes. He also questioned whether the authority was to be responsible for ensuring the competence of quality checks and highlighted the FOI's concern that in Malta there was only one company equipped to conduct such checks.

Mr Micallef also highlighted various provisions introduced by the EU directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. This directive aims at having renewable energy sources providing 21 per cent of electricity by 2010. He also discussed some of the points raised in the EU Green Paper on Energy Efficiency particularly the need for a clear vision for promoting sustainable development.

The conference participants were also addressed by Malta Resources Authority CEO Antoine Riolo, MEP Joe Muscat; Enemalta chairman Alexander Tranter; Enemalta CEO Anthony Rizzo, Enemalta HR and corporate services chief Anthony Bonello, and GWU deputy general secretary Gejtu Mercieca.