Net News ran a report that the government is refusing to disclose details about its energy purchases. Concerns are growing about the government’s energy purchases and its overall energy policy after the war in Iran has shocked oil and gas prices upwards.
Malta’s electricity system relies on a combination of imported natural gas, electricity generated locally by a private gas-fired power station, and electricity imported through the European grid. At the centre of the system is the state energy company Enemalta, which purchases electricity for the national grid and manages the country’s overall energy supply. The structure of these contracts — particularly those linked to the Electrogas project — continues to shape Malta’s energy policy and public finances.
Most of the natural gas used in Malta’s electricity generation is imported through the Electrogas Malta consortium, which built and operates the gas-fired power station at Delimara. The plant, with a capacity of around 205 megawatts, forms a major part of the country’s electricity supply. Under the energy reform framework introduced in the 2010s, Electrogas was required not only to build the power station but also to secure LNG supplies and deliver electricity to Enemalta. Rather than buying most of the gas itself, Enemalta primarily buys electricity produced by the Electrogas plant through a long-term power purchase agreement that guarantees the consortium a steady revenue stream for the duration of the contract.
Alongside this arrangement, the government also purchases natural gas separately through Enemalta for the Delimara 3 power plant, which is operated with Shanghai Electric. This means Malta effectively has two gas purchasing channels: LNG imported and used by Electrogas for its own plant, and gas acquired by Enemalta for other electricity generation facilities. The system is complemented by electricity imported from the European grid through the Malta–Sicily interconnector, which can supply a large share of Malta’s demand when imported power is cheaper. The gas used by the plant has historically been supplied through trading arrangements involving Azerbaijan’s state energy company SOCAR.
The gas supply arrangement linked to the Electrogas project is expected to expire next Summer. While the long-term electricity purchase agreement between Electrogas and Enemalta continues until around 2035, the approaching expiry of the LNG supply arrangement raises questions about how Malta will secure future gas supplies and whether the government will renegotiate the structure of the country’s energy purchasing system.
The last government gas-purchase agreement was linked with oil prices and the government called this as a hedge: but this is not a hedge. A hedge would serve you to protect you from price volatility in relation to the price purchase of your supply – this is not the case with the current contract as it is rather simply a bet that oil prices would be relatively cheaper than gas prices – that’s not a hedge.
The Finance Minister is also mum on these arrangements and the Energy Minister repeatedly refused to answer questions.
The government is hiding past corruption and incompetence as it refuses to disclose details about its policies and purchases – this is an empirical reality and not an opinion. Electrogas, which was a the flagship corruption project of Joseph Muscat and his friends, is making a significant profit while Enemalta is making consecutive and regular losses as it is propped up by government subsidies. The government’s response to energy prices are direct subsidies with no strategic intent or will to address the crux of the problem. The only solution the government is offering is renewable-energy which as is in the real case in Europe, does not guarantee lower electricity prices. The Foreign Minister Ian Borg held a meeting with US Energy Secretary Chris Wright and discussed potential gas purchases but the brief is under the responsibility of the Ministry of Energy and the Energy Minister has so far kept a policy of complete secrecy.
By keeping the lid on its actions and discussions regarding Malta’s energy policy, the government is trying to avoid accountability. These are matters of national interest, and the government should not have the power to suppress information or evade scrutiny by refusing to disclose details that go to the very core of everyday life in Malta.
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