One of the main economic weaknesses Malta faces is its almost total dependence on imported fossil fuels.
The persistent oil market volatility impacts heavily on family finances as well as on businesses because oil and its energy derivatives are the lifeblood of homes, industry, transport and, indeed, every other facet of our daily lives.
When one adds the equally essential aspect of environmental protection, the importance of a well defined national energy policy becomes self evident.
It is in this context that the Government launched the National Energy Policy document detailing its vision for an effective energy strategy for the next few years. The document is based on the principles of efficiency and affordability, security of supply, diversification, flexibility and sustainability.
For many years, energy consumers in Malta were shielded from the realities of price volatility in energy markets. Enemalta’s sad financial situation is partly the result of the government-administered tariffs it charged for petrol, gas and electricity.
The positive aspect of this strategy is that, for many decades, consumers often paid subsidised prices for some of the energy services. But this fake utopia could not last forever because subsides distort the market realities that need to be addressed to ensure Malta’s competitiveness is indeed sustainable.
Another negative effect of past energy policies was that it discouraged the frugal use of energy resources because there was no real incentive to do so.
Reversing these flawed policies is proving to be painful but necessary because our future economic prosperity will partly depend on our ability to use expensive imported resources effectively.
The National Energy Policy document aims to encourage the use of alternative energy by households and industry. So far, solar energy is considered the most viable option for. It therefore makes sense for the Government to incentivise consumers to invest in photovoltaic technology to generate electricity.
This strategy should help this country make more progress towards achieving its 2020 target to have 10 per cent of its energy consumption coming from renewable sources.
Another important aspect of the national energy strategy relates to the need of secure energy supplies. Our total dependence for electric energy on the Delimara power station constitutes a major security risk that needs to be mitigated. The Sicily interconnector facility is, of course, a crucial plank of the national energy policy because it will provide us with an alternative source of electricity in case the Delimara power supply is interrupted for whatever reason.
The National Energy Policy document lays out a sensible strategy for the management of the country’s future energy needs. But like all strategy documents its success will depend on how well the different stakeholders are able to translate strategic thinking into operational plans that achieve the energy objectives of the Government.
The Achilles heel of the energy strategy could well be the ability of Enemalta to move out of the crisis creep that seems to have characterised its operations in the last several months.
It is inevitable that Enemalta should undergo a major restructuring of its operations. This should include not only its manning levels but also its management of day-to-day operations. Moreover, the financial restructuring of Enemalta that was announced in Parliament should be realistic and implemented immediately.
The National Energy Policy document brings us a step closer to a sensible energy strategy that now needs to be converted into a credible action plan.