Malta – Harnessing wind energy

The quest to produce energy from “clean” sources for the sake of safeguarding the environment has become practically ingrained in the mindset of this country spurred on by the real need to pollute less the natural environment and also to reduce the burden on power generation plants and containing consumption costs.

Thus, the notion of using natural resources to generate energy has become widely accepted and investments are gradually being carried out to produce energy mainly from the sun and to a much lesser extent, from wind power.

Feasibility studies conducted last year on the site off Ghadira bay, the identified location for the proposed wind farm, have shown that there is sufficient wind to generate the required wind energy to power 40,000 homes. This is no mean feat when considering the amount of power generated by the wind itself. Even more so, this is positive news especially when considering that this means of energy generation is undoubtedly more environmental friendly than the Delimara and Marsa power stations which have over the years emitted much more harmful gases into the air than anticipated and a form of redress to lower the emission levels is required.

The crucial question that has to be asked, however, is what will be the investment cost required for the wind farm to be in operation? Installing a wind turbines is not a straightforward affair and a few considerations have to be factored into the equation before clean energy from wind power can be produced. Thus, the most important considerations are intrinsically related to cost, both in terms of installing the wind turbine and the price of energy produced due to the high operating costs involved.

The Minister responsible for Resources and Rural Affairs warned that the cost of the energy produced by the wind turbines will not necessarily be lower than the energy produced by the power stations due to the expenses involved. Nevertheless, producing power for around 40,000 homes cannot be underestimated and more analysis on cost related issues should be examined further to understand better the feasibility of this project.

Another issue, which has already been debated to an extent, is the aesthetic impact that the significantly large wind turbines will have on the country’s coastline. Due to the limited land mass, a wind farm is expected to significantly impact on the visual element whereas entire wind farms in nearby Sicily gradually seem to blend with the environment, somehow.

Thus, the advantages and disadvantages of this project have to be evaluated carefully especially in terms of costs involved. At the moment, the country depends solely on the Delimara and Marsa power stations for all electricity generation with Delimara in the process of receiving an extension to cope with the demand and Marsa set to close down due to its ageing equipment, low productivity and high emission levels. One should however keep another important consideration in mind as far as capital outlay and source of clean energy is concerned, namely the underwater connector that will soon be connecting the national electricity grid to the energy resources powering mainland Europe.

It is understood that an expression of interest for private investors willing to finance the wind farm project will be issued soon, since at this stage the country cannot afford the significant capital outlay required to installing the wind turbines offshore. Any enterprise will, understandably and unlike Enemalta Corporation, expect to make a return on the capital invested and a profit from the operations and this will invariably have to be reflected in the energy tariffs sold to the national electricity grid.

In terms of clean energy, producing sufficient power for 40,000 homes through a wind farm is worth considering. It is now a matter of convincing private investors to finance the project and determining the cost of the clean energy produced while weighing the feasibility with the current situation and the plans in the pipeline with regards to energy generation.

While on the subject of energy costs and return on capital employed, the country is still waiting for the authorities to announce the increase in energy tariffs expected once the Delimara power station extension is completed and works on the interconnector to Sicily start.

As the Minister for Finance announced a few days ago, Enemalta Corporation had the habit of not including a return on investment element in the energy tariffs charged to consumers. Lately, this cost element was included but the latest two investments still have to be accounted for and factored into the tariffs. Thus, a further increase in tariffs seems to be the only plausible solution for the investment being made of circa EUR450m.