If Malta fails to reach EU renewable energy targets it could cost the country about €400 million, according to a "hypothetical" analysis by the National Audit Office.
The study was requested by Parliament's Public Accounts Committee last year, after Environment Minister George Pullicino warned that if the proposed offshore wind farm was not feasible, Malta would be "stuck".
According to a directive, EU member states have to generate 10 per cent of their energy from renewable sources by 2020.
If not, countries would likely have to fork out penalties, buy "green certificates" from other countries and create new shared renewable energy projects with other states.
According to the report by the auditor general, in a worst case scenario where Malta only manages to generate one per cent of renewable energy, it would face penalties of up to €26.1 million.
However, it might also have to fork out money to rectify the situation with interim measures (buying green credits from countries with excess renewable energy) and longer term measures through new cooperation agreements with other states.
These could cost €58.5 million and €324.9 respectively, according to the report, which together with the penalties put the damage at more than €400 million.
To make matters worse, a failure to reach the targets could also set Malta back in other areas, such as carbon dioxide reduction, meaning penalties and expenses could pile on.
In fact, the report did not tackle the consequences of the other part of the EU energy directive, which says that member states also have to use renewable sources for 10 per cent of the energy used for transport.
The National Audit Office pointed out the study had various limitations, not least because 2020 is 10 years away and a lot may change by then, including technological advancements and energy demand.
The study also had to work with limited availability of overseas data and information and base its estimates on rates prevailing at different points in time.
In terms of green credits, or, as the report calls them, statistical transfers, this depends on having countries with excess renewable energy, which could be difficult if the EU raises its targets further.
Meanwhile, the Ministry of Resources and Rural Affairs reacted by saying that the government was working to reach the targets and investing in solar, wind and biomass energy.
It added that the economy of climate change and renewable energy was a relatively new subject so it was difficult to come to a precise estimate of how much not reaching the targets would cost Malta.
"It is important for everyone to work together to reach these targets. It is wrong to instil fear and doubt on projects that will help generate cleaner energy just to take advantage in the short-term," the Ministry said, referring to the Labour party, following months of back-to-back statements on the government's handling of the environment.
The war of words continued in the past weeks where it was revealed that the offshore wind farm in Sikka l-Bajda could face more difficulties than hoped.
The auditor's report can be accessed on www.nao.gov.mt.