In view of the rising cost of fuels and the increase in the cost of electricity, the Malta Federation of Industry (FOI) has prepared a number of proposals, which could be employed as short- and medium-term mitigating measures. The adoption of such measures should form part of a holistic energy plan, whereby a mix of initiatives is undertaken to exploit synergies between them.
A workable national energy policy framework, whose implementation is divided in short to medium-term actions spanning a number of years and longer term projects, is urgently needed.
The cost structures corresponding to the relevant actions need to be both clear and transparent to the consumer, with the overriding objective being how Malta can sustain its economic and social development within the current and prospective energy trends but without causing unnecessary shocks.
It is very important that the current system of capping of utility charges to large enterprises be maintained. This safeguards direct and indirect employment. It is recommended that enterprises benefiting from the capping system should submit an energy performance plan, spread over a number of years, to commit to a reduction in energy use arising from efficiency measures and to an increase in energy generated from sources other than fossil fuels.
The FOI stresses that the effects of the increase in energy and water bills must not be exacerbated by inflationary pressures emanating from labour costs.
This would surely result in significant serious spiralling effects as employers will then be influenced by the combination of higher energy costs, higher labour costs and a potential reduction in the aggregate demand. The government must avoid a repetition of enhancing the the Cost of Living Adjustment (COLA) with an additional expense to employers.
It is desirable that the new tariff system would entail time-of-use (TOU)-based charges, which would discourage consumers from using electricity at system peak hours. A new tariff structure should encourage consumers to move their electricity consumption, when possible, from established peak to off-peak hours. This contributes to a more efficient use of electricity-generating equipment.
The process of reducing the amount of energy that we consume will lead to the reduction of carbon emissions and a reduction of the need for additional energy supplies, hence costs.
Saving energy can also reduce the amount of renewable energy needed to meet our targets by reducing the overall energy consumption. This is cheaper than investing in new generation plant and may lead to an absolute reduction in energy demand in the longer term.
Using every unit of energy as efficiently as possible has to become ingrained in our culture. To achieve this, there should be the introduction of policies so that every sector of the economy is encouraged to consider the economic benefits arising from energy efficiency and that our energy efficiency policies and efforts are integrated.
Improving energy efficiency within enterprises requires the constant investment in new technologies to consume less. Thus, effective uptake of energy-efficient practices within enterprises could consequently make a major contribution to business competitiveness in terms of bottom-line savings.
The deployment of public funds to support the undertaking of enterprise energy audits and the implementation of the recommendations arising therefrom would assist business to meet international performance standards with regard to climate change and to benefit from the potential economic and environmental synergies offered by solar thermal heating/cooling and rainwater harvesting technologies. Similarly, support to educate our workforce on the conservation of energy is also very necessary.
The government should invest in short- to medium-term renewable energy projects, which show promise of reasonable returns.
Where possible, investment should be made in government buildings, such as local councils, factories and schools.
Long-term doable projects, such as wind generation, should be embarked upon, at least on an experimental basis. Subject to environmental and economic considerations, exposed uninhabited coastal sites could accommodate a small wind farm.
The proposed energy cable link to the European grid should be pursued with urgency. It must be emphasised that this measure should not just be a case for less expensive energy but to enable Malta to achieve a much higher level of energy security and potential diversification of energy sources.
Mr Muscat is director general of the Malta Federation of Industry.