The House of Representatives yesterday started debating a Bill to amend the Malta Resources Authority (MRA) Act, laying the ground for the liberalisation of fuel imports and distribution.
Resources Minister Ninu Zammit explained that the authority was set up six years ago to serve as the regulator in the areas of energy, water and mineral resources. It was responsible to ensure that there was security on supply, distribution was efficient, consumers enjoyed the lowest possible prices, the sector was sustainable and that there was respect for the environment.
As far as possible the authority worked with stakeholders to ensure that reforms were made by consensus.
The authority was still building its capacity but its functions were on the increase. For example, it ensured that proper practices were followed in quarrying. It issued licences and monitored all sort of activities involving resources, from quarries to the operation of power stations and other energy-generating activities, petrol stations, oil storage activities, efficient production of good quality water and oil exploration.
Where applicable, the authority ensured that competition was fair among all operators.
Mr Zammit said the authority was currently conducting a public campaign on the efficient operation of electrical appliances and it also operated the subsidy scheme on the purchase of electricity and water efficient equipment. The scheme was announced at the last Budget and by May, 7,400 applications for refunds had been received.
The minister spoke on the recently issued draft energy policy and said that the document had passed through the consultation process and was now being fine-tuned in line with all EU requirements.
A study had been commissioned on the benefits and constraints involved in the introduction of renewable sources of energy. While everyone wished to see renewable sources of energy in Malta, there were certain limitations, notably costs and space. Malta was densely populated with too small an area to cultivate crops for biofuels. For the same reasons, it was difficult to build an onshore windfarm of a certain size. One could opt for an offshore windfarm but the sea had been found to be very deep, exceeding 50m in the most suitable areas. Nonetheless Malta was following developments in this area.
Photovoltaics to harness solar energy were still expensive, making the generation of energy from this source between twice and three times more expensive that current energy production methods.
Malta, however, could and needed to make more inroads in the use of solar water heaters, where it way behind, say, Cyprus. Solar energy water heaters last year only accounted for 0.28 per cent of total energy consumption in Malta. Should penetration reach the levels of Cyprus, that would translate in a saving of 4 per cent in the generation of electricity through ordinary sources.
Mr Zammit said that where possible, Malta would also introduce renewable energy from biomass. In this sector, by 2010, Malta could be producing as much as 3.6 per cent of its energy needs. Production of biodiesel was also expected to increase.
The EU target was for a fifth of energy production to come from renewable sources by 2020 and this was what Malta should be aiming for.
Apart from promoting renewable energy sources, the authority was seeking to reduce energy demand, with particular progress having been made in the production of water.
Mr Zammit said the MRA was also conducting a cost benefit analysis on linking up the Maltese electricity grid with that of mainland Europe. Another study involved linking up to the European gas network.
The minister said the long process for the liberalisation of the domestic fuels market was now approaching its final stages and the authority was being given the legislative tools through this Bill to manage this sector.
This had been a complex process with extensive consultation involving areas such as importation, security of supply for the various fuels, storage, distribution, the operation of installations, safety and record keeping. Legal notices would be issued after the passage of this Bill.
MRA officials would have the authority to periodically inspect installations to ensure that operations were efficient, safe and, as far as possible, did not harm the environment. The authority would be able to seize and examine samples and impose fines where regulations were not respected.
Mr Zammit said the liberalisation of the importation and distribution of fuels was aimed at benefiting consumers through a fair price, efficient service and good products.