Just as the European Commission rapped Malta for not making any tangible progress to reach binding renewable energy targets by 2020, wind speed studies have confirmed that an offshore wind farm on the reef known as Sikka l-Bajda is viable. This is good news, though it will, of course, take time before the project takes off. Quite interesting too has been the government’s decision to reconsider linking the island to the European gas pipeline grid, in the same way it is doing with the laying of the interconnector to link Malta to the power grid on the mainland.

Labour has taunted the government for making a U-turn over the gas pipeline proposal but, in this case, it can well be said that the U-turn – if it can be considered a U-turn at all – is most welcome as it would not only help to ensure greater reliability in fuel supply but will contribute to cleaner power generation. The interconnector and connection to the gas grid will, therefore, be very important infrastructural works that would help solve problems, though it is unlikely they would make any impact on the cost of fuel to the consumer, at least in the foreseeable future.

Prime Minister Lawrence Gonzi explained in Parliament Malta had not joined the gas pipeline project from Libya to Sicily in 1995 because of technological problems and the costs involved. One of the conclusions of the latest European Union summit was that, by 2015, no region or island in the EU would be left out of the power and gas energy grids. The Prime Minister saw this development as a new opportunity for Malta to tap financing for schemes or initiatives in these sectors.

It is indeed an opportunity that ought to be actively investigated and acted upon without loss of time. The EU is providing €25 million in funds, under the European Recovery Plan, for the interconnector, which is to be laid by a French company, Nexans. Under the contract, worth €182 million, Nexans will lay a single alternating current cable with a carrying capacity of 200 megawatts. The interconnector will link Malta to Marina di Ragusa in Sicily.

The extension of the Delimara power station, as well as the laying of the interconnector, and the proposed link-up with the gas grid involve a substantial capital outlay.

Finance Minister Tonio Fenech gave a brief account of this when he explained in Parliament the other day that a “special-purpose vehicle” model was being drawn up to keep the energy corporation’s long-term debts sustainable and help it repay them over a period of time.

How will the corporation actually recover the cost? The minister explained a structure had been agreed upon for the tariffs to incorporate the costs involved in the generation of electricity and the return on capital employed.

Clearly, there is no question that the corporation has to recover costs as, otherwise, it would be unable to keep financing works to ensure power supply all the time.

However, its debt would not have accumulated to the level it has reached today had the energy tariffs been raised gradually, as it has often been suggested, and had its efficiency improved. Still, all the developments taking place in the energy sector today indicate the country is moving in the right direction. The problem is that it is not moving fast enough. It does not reflect well on Malta to miss its own targets.

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