Ivan Camilleri, Brussels
Derogation effectively safeguards Enemalta's electricity monopoly
Enemalta Corporation can continue to be the only provider of electricity for the coming years after the government secured a derogation from a set of new EU rules aimed at opening Europe's power market to competition.
The derogation, which indirectly safeguards Enemalta's monopoly, was discussed informally between the European Commission and the government over the past months and has now been given the green light by EU energy ministers.
The derogation grants Malta, as an emerging market, the right not to allow third parties into its internal electricity market. In addition, state-owned Enemalta can continue producing and distributing electricity.
A Commission spokesman said Brussels accepted Malta's arguments that the island cannot have more than one supplier and distributor given its small size. The same applies to Cyprus and Luxembourg.
The derogation means that, in the future, no one can use Enemalta's grid to supply electricity to Maltese consumers or compete with the corporation through lower tariffs.
"First of all, this option is only a theory as it is economically unfeasible due to our economies of scale," a government spokesman said when questioned about the issue.
"It is clear we can't have more power stations on the island. Also, the project to link Malta to the European electricity grid is an Enemalta project.
These things require hundreds of millions of euro in investment, which no one can do apart from Enemalta," the spokesman added.
Through the new rules, consumers on mainland Europe will be experiencing more competition in the coming years. In Europe, it is already possible for a consumer to switch the electricity supplier and competition is becoming fiercer.
The rules, known as the Third Energy Package, aim at opening up the energy sector to competition by limiting the dominance of energy suppliers.
The rules, which still have to be approved by the European Parliament, will prohibit energy monopolies to simultaneously continue to produce and distribute energy. Companies will also have to divest their interests from the running of their electricity distribution systems.
Major distribution companies will also be obliged to allow third parties to use their grids for electricity transmission purposes in order to offer consumers more choice.
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l Galea
Oct 30th 2008, 14:14
"The rules, which still have to be approved by the European Parliament, will prohibit energy monopolies to simultaneously continue to produce and distribute energy. Companies will also have to divest their interests from the running of their electricity distribution systems."
This only means an increase in the tariffs because of other companies are involved in the distribution they have to make a profit over and above that made by EneMalta.
Simon Joseph Aquilina
Oct 30th 2008, 09:46
In this matter the EU and Maltese government are right. Malta is too small to have more than one energy provider. This would make Enemalta a monopoly here in Malta. However the article also says that the new rules “…will prohibit energy monopolies to simultaneously continue to produce and distribute energy”; from my understanding this means that Enemalta will only be allowed to produce the energy while other companies will be responsible to sell it – this would mean that different energy distributing companies would be selling energy at different prices / schemes and hopefully in this area there will be no monopoly. Unfortunately from the article I cannot understand if the government also has derogation on this; allowing Enemalta to both produce and sell energy! Additionally it is a bad idea to just leave Enemalta with a monopoly in Malta without any EU rules to follow. One of the main aims of the EU is to have a similar standard of living throughout Europe. Therefore the EU should make some capping rules on the tariffs the consumers have to pay; otherwise Enemalta (with a monopoly) will remain inefficient, with such inefficiency reflected in the price we pay!
James Sultana
Oct 30th 2008, 09:43
No wonder Agostino Pio wants to make sure that we have three times the number of taxis we have at the moment: HE WANTS TO BE SURE THAT HE HAS ENOUGH RESOURCES TO KEEP TAKING THE PUBLIC FOR A RIDE !!!!!
The Prime Minister on Xarabank said "Ta l-1 t`Ottubru mhux vera xejn. M`hemm xejn deciz li jidhlu b`lura... ahna qed niddiskutu" .. Dr. Austin decided that tariffs ARE BACK DATED.
Dr Austin: "Even if oil is now at $100, it still costs less than we bought it. We bought at $85. If it goes below that, we will keep our usual word and decrease the prices".... Oil is at less than $70 ... Dr. Wistin increased the prices !!
Dr. Austin: "all monopolies must end for the benefit of the consumer": The government negotiates a derogation to protect the Enemalta electricity monopoly.
And yet the apologists and spin doctors still meniton the change of positions taken by Dr. Sant and the MLP years ago! The TWO PRIME MINISTERS DO IT EVERYDAY !!! Even the person in command changes everyday !!!
Keep playing the piano dear apologists- while the ship is sinking!
Steve Rogers
Oct 30th 2008, 09:19
Unbelievable.
This means we are under the incompetent, inefficient rule of EneMalta with no freedom of choice like our fellow citizens on the mainland. We are at the whims of whatever Austin Gatt imposes on us - hence why there will be no more discussions as we are stuck with this monopoly.
Why did we join the EU? Why is this administration arrogantly treating us like little children as if we are still a colony dictated by an uncaring foreign power distant from the people?
Had the government put this to referendum it would have found a landslide against this move. Government of Malta open your eyes and ears - you are not listening to the moans and groans of your people and will pay dearly election time.
Evarist Saliba
Oct 30th 2008, 09:16
While one can go along with the general trend of the argument, does this mean that Enemalta has a veto power over the introduction of alternative sources of energy, like solar or wind energy, and not excluding oil-fired generators, for private or public use?