Powering Up Malta

Manuel Zarb - 8th September 2017

Energy and Water Agency CEO Daniel Azzopardi speaks about the Agency’s role within energy policy, how it acts to achieve its goals and the challenges of making Malta’s concerns on policy heard in Brussels.

“We’re a relative pioneer within the public sector,” says Energy and Water Agency CEO Daniel Azzopardi. “During the 1990s, the trend was for Government to set up authorities in the energy and water sector which were a hybrid between a regulator and policymaker. Nowadays as an EU member state, this is no longer possible.  The regulator needs to function as an independent authority whilst policy making remains at the core of the Government’s functions.”

The E&WA, Mr Azzopardi explained, is now a policy agency. “We like to look of ourselves as a think tank in the Energy Ministry. The Agency’s distinct identity enables it to attract top notch professionals who would be difficult to engage otherwise. The Agency is entrusted with both drafting and implementation of policy, which nowadays is heavily influenced by Brussels as the European Union’s competence over this area increases.”

“The Agency has three pillars on which policy is built,” said Mr Azzopardi. “These are security of supply, sustainability and affordability – principles which are complimentary and mutually reinforcing. Security of supply is secured through a mix of onshore generation, including through the new 215MW gas-fired power plant, and Malta’s interconnection with the European grid via the Malta-Sicily cable. The next logical step is now to have a pipeline for natural gas linking Malta to mainland Europe. This also helps make energy more affordable for the local consumer. Over the past years Malta joined a number of energy islands to place interconnectivity at the top of the EU’s priority list.  This is now entrenched in EU policy and reflected by financial support for projects of ‘Common European interest’”.

The revamp of the generation and distribution sector, the construction of the interconnector, fuel switch to natural gas, and upscaled support for renewable energy whilst improving energy efficiency throughout the energy cycle have also contributed towards more sustainable and affordable energy. “We’ve managed to reach a delicate balance on these pillars – we have achieved a secure, clean and affordable supply of electricity. We can always do more, but keeping costs in mind is crucial,” Mr Azzopardi affirmed.

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During the Maltese Presidency of the EU Council, the EWA was heavily involved in negotiations over energy – both in Brussels and in Malta. “The Presidency’s job is to square a circle, drafting an elegant text backed up by our technical expertise, which is sufficiently appealing to most, if not all, other 27 Member States” said Mr Azzopardi. “This required us going up to Brussels every week to assist our colleagues during Energy Working Party discussions and drafting sessions of legal text.”

“During this Presidency, the energy team successfully closed existing files on energy efficiency labelling and security of supply in case of a natural gas crisis – in essence, a plan B in case the natural gas coming into the EU from Russia, which is roughly 30 per cent, stops flowing. We also opened new files such as the Clean Energy for Europeans package, nine pieces of legislation which will overhaul energy in Europe for years to come. This requires us to propose a national sustainable energy target which is based on facts and figures, and which will allow the Commission to monitor progress effectively such that each Member States does its fair share towards the overall union goals. Our Presidency also reached a general agreement during the June Council on the Energy Efficiency Directive.”

Having spent seven years working in Brussels, Mr Azzopardi has seen the Commission’s competence in the energy sector grow, also in reaction to gas supply crises triggered by Russia. Nevertheless it is important that Malta’s voice continues to be present.

“A lot of our work is now related to helping our colleagues represent Malta in Brussels,” he said. “Our country has unique problems which we have to make known in the EU – our small size, population density, geographic isolation and small energy system are all significant challenges. Thus we have to communicate with the EU institutions – especially the Council, Commission and the European Parliament, presenting data which backs up our arguments, to make sure that energy policy made in Brussels is not a one size fits all and reflects our needs and specificities.”

Giving an example, Mr Azzopardi mentioned the 2020 renewable energy targets which had mandated that 10 per cent of Malta’s energy come from renewables by that year. “This is very challenging for us due to a lack of space – we also don’t have rivers or shallow offshore sites suitable for Wind Farms like other member states. Whilst we still plan to reach the 10 per cent target indigenously, this is quite expensive and requires a disproportionate effort compared to other countries. Nowadays, as a result of dialogue with the Commission, the top-down approach has changed. “Backed up with data, we can now set our own realistic targets for 2030 which are ambitious yet based on the local reality.”

Mr Azzopardi goes on to discuss the local situation in energy use. “Around 60 per cent of electricity on the island is used by the industrial and commercial sectors,” he explained. “So this is where savings need to be achieved. Our national primary energy generation is now very efficient, and it’s time to turn to the demand side and address energy consumed by the commercial and industrial sector. This requires raising awareness – particularly important due to a lack of information amongst businesses.”

Asked about the reaction from business, Mr Azzopardi answered that the process is all very new. The Agency, however, is undertaking various schemes to make the change easier for businesses. “Through the Energy Efficiency Partnership – a voluntary agreement to carry out audits in larger enterprises – we’re going beyond what is required by law. Companies which implement energy efficiency measures shall not only reduce their energy costs, but shall be also rewarded with tax credits according to the energy efficiency investment carried out as well as the level of energy savings achieved.  The Agency is also collaborating with Malta Enterprise to provide free energy audits for SMEs, whereas a new scheme is being developed in collaboration with MHRA to reward hotels which achieve better energy performance.” Due to the novelty of energy efficiency audits in the local context, Mr Azzopardi continued, the Agency feels that more needs to be done to promote the relevant benefits to ensure higher uptake.

Speaking on energy poverty, Mr Azzopardi recognised that issues still exist. “In Europe, energy poverty generally means not having enough money to heat your home during the winter, which unfortunately is something that many Europeans deal with. In Malta we don’t have this problem. Many people, however, still face difficulties. Due to this, our Agency has started to visit people’s homes in collaboration with LEAP, carrying out an energy and water audit to help vulnerable families reduce their consumption (and their costs). This can make a big difference to their quality of life, especially for the most vulnerable.”

Concluding the interview, Mr Azzopardi reiterated the Agency’s primary goal. “We deal with both the software and the hardware of energy and water policy,” he said. “The software is legislation and policy – the hardware is the physical infrastructure needed to put our policy into practice. Through a combination of both, and the schemes necessary to get business and industry involved, we can continue to support Malta’s sustainable development.”

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