During the Joseph Muscat’s administration, the sure-fire policy was to turn away from burning heavy fuel oil at the old Delimara plants and exclusively import fossil fuels, aka Electrogas, BWSC plants. Such gas is imported from Azeri shareholders owning Electrogas via an FSU vessel permanently anchored in Marsaxlokk. From a long-term and Net Zero policy perspective, the development and commissioning of a wind or solar farm could generate up to one-third of the island’s current energy consumption.
With an estimated contract value of €1 billion, Malta aims to attract investors to design, construct, operate, maintain, and eventually decommission this impressive offshore structure, planned to be located 12 nautical miles from the coast.
The concession will be for 35 years, and the two sites identified by the government are Hurd’s Bank, off Marsascala, and to the South, off the Freeport. Hurd’s Bank, which is a shallow area in international waters is currently extensively used for ship bunkering. This location, due to its shallow water, is ideal for anchoring floating turbines or solar panels. Prime Minister Robert Abela said that the project will enhance Malta’s energy diversification and increase the current use of renewable energy.
There were among 64 entities and individuals who previously submitted their views on the PMC’s document. Times of Malta understands that the government is tentatively planning to see the wind farm up and running by the end of the next legislature, somewhere around 2032. Bidders will be expected to identify where they plan to site their project within the two identified areas. The two areas are relatively shallow, reaching depths of about 90 to 150m. Energy generated by turbines/solar panels will be transmitted back to shore or diverted via export cables. The competitive process will involve three stages.
Stage 1 is the Preliminary Qualification Questionnaire (PQQ), Stage 2 is the Invitation to Participate in Dialogue (ITPD) and Stage 3 is the Best and Final Offer (BAFO). Observers may wish to question what tangible progress was achieved in the sphere of green energy during the Labour administration, now in its 11th year. If successfully installed in the next seven years, a green electricity source will eventually partially replace the use of LNG and/or importation from Italy of power over two interconnectors.
A national policy for offshore renewable energy was first announced in August 2023. This year, two consortiums and a Greek company submitted their bids:
The first consortium is Code Zero Consortium, led by SEP (Malta) Holding Ltd, with partners Kornelio Energy 1 Limited, M. Demajo (Holdings) Limited and NMK Renewables Limited). SEP, based in Whitehall Mansions, Level 4 at Ta’ Xbiex Seafront, is one third shareholder of Enemalta with various business interests covering Electric Power Transmission, Control and Distribution, Electricity, Oil & Gas, Energy.
A second submission was made by the consortium Atlas Med Wind, led by GreenIT SpA (Italy), partnered with Seatrans Shipping Ltd, Central European Advisors Limited and CI V Transfer Coöperatief U.A.
The third submission was by MCKEDRIK Sole Member Ltd, a sole applicant from Greece.
Another novel strategy is Green Finance.
This includes promoting investments and green bonds used in low carbon energy generation and sustainable infrastructure. So far only one bond of €25m has been launched locally in 2023 by Water Services Corporation (more issues may follow). In the context of annual peak demand of 870 megawatts, the offshore facility produces 300mgw, which critics say is just tinkering on the surface. However, it is a start and in seven years’ time, it will strengthen the supply side and possibly avoid summer blackouts. Another drive is aimed to solicit domestic calls for the deployment of more onshore photovoltaic farms.
Minister Miriam Dalli, Energy minister, is currently supporting the ongoing technical studies to announce exciting fresh competitive calls for locals. Another dream will be the production of hydrogen gas by electrolysis of sea water.
This is a by-product consisting of pure hydrogen gas conveniently bottled in pressurised canisters for export. The wind farm concession falls short of indicating the parameters of a feed-in tariff to Delimara or as the case may be, if there is scope for excess energy to be exported by the successful concessionaire. Ideally, producing hydrogen via electrolysis can be exported using a future “Melita” TransGas hydrogen-ready pipeline.
This has been identified as a project of common interest by the European Union. Malta is a safe bet for investors, as it guarantees full protection during the commissioning period. One hopes that our Net Zero challenge will be reached by 2050.
It is advisable that a thorough study be conducted by experts advising Castille to develop targeted tax incentives, carefully tailored to attract international investors in this niche market.
