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Powering productivity

Ing. Frederick Azzopardi, Executive Chairman of Enemalta Plc.

Malta long relied on old power plants and an ageing distribution system, but the sector has been completely reengineered. MaltaProfile spoke to Frederick Azzopardi, Executive Chairman of electricity provider Enemalta, about Malta’s current and future electricity needs.


Malta’s energy sector has just been modernised. Can you update us on the country’s generation infrastructure?

Malta’s energy mix is today based on three main components: onshore power plants, an electricity interconnector to Sicily and renewables. Until recently Malta was predominantly reliant on power plants running on Heavy Fuel Oil (HFO). In fact, the two main power plants in Marsa and Delimara, which now houses a series of separate power plants, used this type of oil. However, the current executive rolled in a plan to remove HFO due to its high concentration of pollutants. In April, Malta finally switched off its last plant in Delimara that was using HFO. This plant has been put on standby for a couple of months and will be dismantled this summer.

A number of open cycle and combined cycle gas turbines from the older power plant in Delimara will only be used in emergency situations and also then they will not use HFO but will run on gasoil. Meanwhile, on the same day that the last HFO-plant in Delimara was switched off, a new gas-fired power station, the ElectroGas plant also situated in Delimara, became operational. It is now one of the main electricity generators on the island. The eight combustion engines of another HFO-fired plant, which was built in 2012 – Delimara 3 – are also being rebuilt to run on natural gas. Half of them are already generating gas-fired electricity, while the refitting of the other half will be completed shortly. 

What is Malta’s current energy generation capacity and is Malta’s supply keeping up with the demand?

Malta’s requirement at its highest peak is 438 megawatts. At the moment, the main source of energy supply is the new ElectroGas plant in Delimara that generates 205 megawatts. Malta can also rely on 200 megawatts at any given time coming directly from an electricity interconnector with Sicily. Another 150 megawatts are supplied from Delimara 3, which is currently being changed to run on gas. The older Delimara 2 power plant, which runs on gasoil, can also provide us with an additional 200 megawatts in emergency situations. However, the amount of onshore gasoil storage is limited, and we can only make use of this emergency capacity for a couple of days. These calculations do not include energy provision from renewables, mainly photovoltaic systems. Malta has some 100 megawatts installed capacity in terms of grid-connected renewables on private households and Government projects, which deliver some 70 megawatts in effective energy production.

 

How do you expect electricity supply and demand to develop in the coming years?

While the current energy supply does cover the peak demand both in summer and winter, we are aware that we need to plan for the future. Economic growth means electricity demand will increase. One also needs to point out that Enemalta has to fulfil the so-called N-1 obligation. This means that we need to be able to supply energy to Maltese households and businesses even when one of our main energy provision components experiences difficulties. Security of supply is our main priority, and we want to ensure that this remains the case in the future.

Enemalta has returned to profitability, less than three years after its debts had reached €1 billion. What were the key elements in Enemalta’s transformation?

We are making better use of our resources; our employees have become more engaged and are understanding that their efforts impinge directly on the company’s success. But it’s also about management, structural decisions and vision. The decision of Chinese giant Shanghai Electric Power (SEP) to invest €320m to buy a 33% stake in Enemalta also led to the creation of a number of separate sub-companies that are opening new doors to the international market. For example, the newly set up Shanghai Electric Power International Renewable Energy Ltd., in which we have 30% shareholding, is looking out to invest in energy and non-energy related projects around the world. On the other hand IESC, which is 70% owned by Enemalta and 30% by SEP, is an international engineering service centre made up of former Enemalta employees through which we can give several services. We are now actively bidding and winning contracts, which bring in extra revenue. In addition, we set up a commercial section within Enemalta itself and are competing with other engineering companies in Malta, for example when it comes to the maintenance of low voltage and medium voltage systems of certain industries. There are obvious advantages that we can offer, including 24-hour support, latest industry technology and expertise.

What are Enemalta’s plans when it comes to upgrading Malta’s distribution infrastructure?

We will continue to strengthen our distribution infrastructure, increasing its redundancy and introducing new network automation technologies. The fact that Enemalta is profitable again allows us to focus on our distribution network, which has already seen an investment of some €100 million in the last three years. We expect this investment programme to continue. For instance, the industrial zone in Hal Far has been earmarked for further investment given that it is one of the areas where industry will likely expand in the coming years. We are investing some €9 million in the distribution centre there.

Looking to the future, what other opportunity areas do you see emerging that Enemalta could take advantage of?

I think there are two areas that could account for growth in the future: this is the wider adoption of electric cars and the use of LNG as marine fuel. We are looking into both markets at the moment as our overarching principle is to make Enemalta as financially independent and operationally diversified as possible.

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