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.