Enemalta

Delimara Power Station

Upon assuming office as Minister for Energy in 2013, Konrad Mizzi started implementing the Government’s energy plan with the primary aim of reducing utility tariffs. Previously utility tariffs in Malta were considered amongst the highest tariffs in Europe, and following the reductions utility tariffs become the fourth cheapest in the European Union.[2] This measure enabled the local industry to become more competitive.[3]

This saw the transformation of the energy in Malta, contrasting with the situation when Mizzi was given the responsibility when Enemalta was close to declare bankruptcy, with €840 million in debt and was consecutively downgraded by Standard & Poor’s. This affecting the credit ratings of the country at the time.[4][5][6]

In December 2014 Shanghai Electric signed an agreement with the Government of Malta[7] where it acquired a minority stake in the local energy producer Enemalta.[5][8][9] The acquisition was valued at €250 million. The restructuring envisaged new investment in the local distribution system, as well as transition from oil-fired energy generation to cleaner technology, such as the Malta-Sicily interconnector, gas-fired plants and renewable energy sources. This is expected to increase the grid redundancy and flexibility. The Government of Malta retained the majority of share of the energy company.[10]

Shanghai Electric is expected to be investing in the conversion to gas of an existing power plant which at present is powered by heavy fuel oil, valued at around €70million.[7] In 2016, and following the investment by Shanghai Electric and the restructuring process that followed, Standard and Poor's upgraded Enemalta's rating to BB- with a stable outlook.[11] Enemalta and Shanghai Electric established a joint venture to tap into renewable energy markets in Europe. They are jointly responsible for the development of the Mozura Wind Park project in Montenegro.[12][13] In 2020 it was revealed that businessman Yorgen Fenech made €4.6 million through his company 17 Black from Enemalta's purchase of the wind farm venture in 2015.[14]

Change in CO2 emissions, 2015/2014 – Source: Eurostat

The third pillar of the energy plan will also result in the closure of the Malta power plant which has been operating since 1969. The Marsa power plant has been shut down, on cold standby, pending the completion of the new gas fired power plant.[15] The local Opposition party criticised the Government of Malta that this plant has been shut down due to measures implemented by the previous Government and not due to the current Government’s plans. However, the current Government’s plan envisages the demolition of the 1992 Delimara Phase 1 Heavy Fuel Oil power plant.[16]

Demolishing the 1992 power plant, would be impossible to achieve without a new power plant due to N-1 requirements.[17] Over 700,000 tonnes CO2 were reduced by shutting down the Marsa power plant.[18] Statistics from the Eurostat confirmed that Malta experienced the highest reduction in emissions in all the European Union.[19][20]

The second pillar that would be sustaining cheaper utility tariffs in the long-term was the development of a gas fired power plant. The development of this project is based on a private-public partnership model. The Delimara Power and Gas project is being developed by Electrogas Malta Limited, a consortium that includes SOCAR, Siemens and Gem Holdings. The consortium has been restructured following Gasol departure.[21] Enemalta would be purchasing electricity. The local opposition Party has been critical of this project since its details were announced, including the procurement process. However, following parliamentary questions in the European Parliament by Malta’s European People’s Party, the European Commission stated that there were no procurement violations.[22]

Electrogas Malta Limited has recently won the award for Best European Energy Project which is organised by IJ Global. The project is expected to contribute greatly to the decrease in particulate matter by 90%.[23] Through the Delimara Power and Gas project, Malta will be conforming for the first time, with the N-1 principle which is stipulated by European Union directives.[17] Such concept enabled Malta to shift its financial resources onto other sectors, while simultaneously enjoying the benefits of modern and efficient infrastructure. The development of the gas fired power plant and the conversion to gas of another power plant is in line with the Energy policy of the European Union, that encourages the shift to gas in the energy sector.

The Gas power plant was officially opened in April 2017. The new power station was inaugurated minutes after the 25-year-old Delimara I power station was switched off. The old power station chimney, a 150 m structure in Malta was demolished in 2018.[24]