Climate change and the policies the EU is adopting to combat it pose one of the most significant challenges the European electricity industry is facing. It is estimated that this industry will need to invest over €29 billion before 2020 if the EU emission and climate change targets for 2050 and beyond are to be reached.
Emerging data show us that action will be required sooner rather than later and that global emissions will have to peak within 10-20 years and decline thereafter if dangerous consequences, such as irreversible tipping points, are to be avoided.
The recently-published Stern report compiled by a team of economists lead by Sir Nicolas Stern, former chief economist at the World Bank, concludes that avoiding the consequences of climate change is affordable (about one per cent of global GDP) if action starts immediately while the cost of inaction will be enormous (about five to 20 per cent of global GDP), hence business as usual is definitely not an option.
An important development in this regard is the upcoming launch of the European energy policy that is due to be published by the European Commission tomorrow.
It is expected that this important European policy document will include a strategic EU energy review covering both internal and external energy policy, general greenhouse gas emission reduction goals and specific objectives for a low carbon energy mix, a renewable energy road map, a communication on "sustainable coal" and a priority interconnection plan based on TEN-E projects of European interest.
Enemalta, in its own right, recognises the massive action and investment that is required to provide new generating equipment, a stronger and more robust transmission and distribution network coupled with a move towards a cleaner primary source of energy for electricity generation (that is, from fuel oil to natural gas).
This is why the corporation has, over the past months, made a huge effort to draw up the strategic framework that will guide it in identifying the future generation and transmission requirements of the Maltese islands.
Apart from moving towards natural gas as Malta's future primary energy source, one must not fail to seek new ways of utilising also other alternative energy options such as photovoltaic or wind energy to further enhance our country's energy mix.
Enemalta is monitoring developments in these alternative forms of energy generation with great interest as increased investment in developing more efficient, cheaper and technologically-advanced equipment is making this area of activity one to watch very closely. A recent article in The Economist claims that the total investment into clean energy stands at $63 billion this year (almost a 10th of America's venture capital), up from $49 billion last year and just $30 billion in 2004.
The Maltese government has already expressed its intent to develop an offshore wind farm. This is a welcome move as such a project will definitely further enhance our country's present energy mix and reduce our complete dependence on imported fossil fuels. Reducing our dependence on fossil fuels means lower CO2 emissions for Malta but does not necessarily mean cheaper energy prices because the capital investment and the maintenance costs for such a clean energy project will still be significant. As things stand today, burning gas is still a cheaper way of generating power than using wind turbines.
This notwithstanding, the move away from being completely dependent on imported fossil fuels for electricity generation is welcome. This needs to be kept within the context of the limitations and possibilities of our islands. We are not alone in facing the huge challenges of changing our energy mix. The European electricity industry is itself looking towards utilising a mixture of coal and gas carbon-capture technologies, nuclear energy and renewables as the main growth drivers of Europe's future electricity generation.
Enemalta now has a clear strategy and a planned vision for both its generation and distribution activities together with the country's move towards a cleaner primary source of energy for electricity generation. As the corporation celebrates its 30th anniversary this year, initiatives have already been set in motion and change is on the way.
Mr Tranter, an engineer by profession, is chairman, Enemalta Corporation.