News | Wednesday, 19 May 2010

Energy consumption in Malta

George Said

Malta’s small size, its geographical position and its high population density exert substantial pressure for an adequate energy supply. Being totally dependent on the imports of fossil fuels for the provision of a secure, competitive and affordable energy supply that is environmentally and financially sustainable has always been a challenge.
Malta imports a range of fossil fuel commodities, primarily used for the generation of electricity, all modes of transportation, and for most industrial processes. Fossil fuel importation data reveal that around 63 per cent is used for electricity production, while another 26 per cent is consumed in public and private transportation. Over the past fifteen years, an increase in the importation of fuel oil and unleaded fuels was recorded.
The high amount of fuel oil consumption is due to the ever-increasing demand for electricity by consumers, which up to 2003 was estimated to be increasing at an average rate of 5 per cent per year. This levelled off in recent years. Chart 1 depicts this pattern.
Such an increase is also reflected in the electricity maximum demand, where an average 340 megawatts was registered on a monthly basis last year. This demand is mostly attributed to the domestic sector since it is the country’s biggest electricity consumer. This sector accounts for 35 per cent of the total electrical consumption. The next two major electrical power consumers are the commercial sector, which absorbs 33 per cent, and the industrial sector, which accounts for 30 per cent of the electricity generated in Malta.
Energy production in small island states is costly and ways to maximise energy consumption have to be introduced. Energy efficiency has proved to be a cost-effective strategy for building economies, indicating that this is also the way forward for Malta.
Data for the past seven years indicate that Malta’s economy is becoming more energy efficient. Energy intensity is a measure of energy that Malta uses to create a unit of GDP. It is the ratio between the total energy produced and the GDP. Chart 2 shows that from 2004 the GDP has a steady growth rate while energy intensity is on a downward trend.
This may be due to a number of factors, primarily the introduction of energy-efficient technologies and a shift from the manufacturing-oriented structure towards service-oriented activities. The purchase of modern, energy-efficient appliances by households, which use significantly less energy than older appliances, has also played a part. As an example, today’s energy-efficient refrigerators use 40 per cent less energy than conventional models did less than a decade ago.
Should this trend continue it may cause a shift towards a relative decoupling of energy consumption from economic activity.
In view of several EU regulations and directives concerning the production and distribution of energy, Malta has to diversify its electrical production and distribution of fossil fuel while maintaining a high-quality product and service.
The proposed Energy Policy for Malta was launched for consultation in April 2009 and outlines Government’s envisaged policy for the energy sector, the priority areas and the overall objectives for the sector’s development.
The policy document identifies six key policy areas, together with measures proposed for achieving the objectives of a secure, competitive and environmentally-sound energy supply for Malta. These are energy efficiency, reduction of reliance on imported fuels, stability in energy supply, reduction of emissions from the energy sector, efficient and effective delivery of energy and policy support to the energy sector.
Further investment and research are essential towards ensuring that the energy sector in Malta develops in line with the highest international standards. Various innovative projects, such as installation of photovoltaic cells branding the latest technology, are being successfully applied across the domestic and industrial sectors. These initiatives have the financial support of the EU. In the coming years, Malta may experience a drop in energy demand if households are more economical in the consumption of the various forms of energy.

Mr Said is manager of the Environment and Resources unit at the National Statistics Office.

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