How the Opposition is wasting energy on energy

The Opposition has been making a song and dance about energy policy. It has come up with various stunts and half-baked proposals to try to put itself in the driving seat of the policy agenda. However, there is broad agreement that it is failing to understand that before people can start taking it seriously, it must first come clean and admit its past failings in this area. Instead, its spokespersons continually adopt a negative narrative that all that the current administration has done in this area is bad, if not criminal, and that voters made a grave mistake when they changed energy policy direction in 2012.

After eight years in Opposition, the PN still has not admitted it was failing the public in this area before 2013. Fronting virtually the same crop of MPs and resorting to advisors that were around in the second Gonzi administration, people like Manuel Delia, Chris Ciantar and Ray Bezzina, they keep on dusting their pre-2013 policies and try to pass them on as new.

Somehow, strategists at Tal-Pietà still fail to understand that energy was the PN’s Achilles heel in 2013 and that restoring credibility in this area requires that the Party reinvents itself. And to reinvent oneself one must start by admitting past failings. The people were not wrong in 2013. The PN’s energy record was abysmal and they could not be trusted any more to run this sector to the ground.

In terms of electricity prices, the rise during the second Gonzi administration was the highest in percentage terms across the EU, with Maltese families facing a rise that was three times that faced by the average family in the EU. Asbusinesses were still recovering from the global recession, the Gonzi administration was more “generous” with them. It only increased prices for businesses by twice the EU average.

Somehow, strategists at Tal-Pietà still fail to understand that energy was the PN’s Achilles heel in 2013.

Opposition spokespersons can try to interpret Eurostat data on energy prices creatively, quoting prices before taxes rather than those faced by consumers. The reality is that we now have much lower prices than in 2013, and all international institutions have pointed out that energy reforms were one of the main drivers of Malta’s economic turnaround.

As to the claim that energy prices fell because of the interconnector, one fails to understand how if this were true, the Gonzi administration, despite its commitment to build the interconnector, was so adamant that lowering electricity prices in 2013 was an “Alice in Wonderland” fable.

The truth is that the interconnector was no guarantee of lower prices. This was the assessment made by three independent researchers, from notable Swiss universities and the London School of Economics, who in 2015 prepared an academic study in the international journal “Utilities policy” published by the eminent Elsevier publishing house. The Opposition would do well to read at least the introduction of this study:

“The main finding is that the Malta-Sicily interconnector does not necessarily lower electricity prices for Malta’s consumers. However, some scenarios, notably the incorporation of natural gas in Malta’s future generation portfolio, achieve win–win situations for both consumer and supplier.” 

However, while important, electricity prices are not the ultimate scope of energy policy. There are at least two other important issues environmental impact and financial sustainability – and on both, the second Gonzi administration failed greatly.

Between 2009 and 2012 Malta’s energy sector increased its greenhouse gas emissions by nearly a tenth. Across the EU during the same time, emissions of that sector fell by 2.5%. By contrast, the latest data show that greenhouse emissions of Malta’s energy sector were down by 40% on their 2012 level. Across the EU the decline was of less than 12%. Despite expanding Malta’s economy by three times more than the EU, Government policy led to a cut in the emissions of Malta’s energy sector by three times more that in the EU energy sector.

The choice of the last PN administration to use heavy fuel oil to generate energy meant that our country’s emissions of the dangerous air pollutant, sulphur oxide, rose by a fifth in just three years, while across the EU emissions of this dangerous pollutant were cut by a fifth. Our small country in 2012 was emitting nearly as much sulphur oxide as Switzerland, a country that has nearly twenty times Malta’s population. We now emit less than twenty times the amount that Switzerland does.

As for financial sustainability, back in 2012 Enemalta was not just failing. It was becoming a big risk for Malta’s banks and economy. The 2013 IMF report on Malta stated that “The high level of government-guaranteed debt and delicate financial position of Enemalta heighten concerns about Malta’s fiscal sustainability”. Throughout the second Gonzi administration the debt of Enemalta grew from 7% of GDP to 12.5%, or over €800 million. It was worrying the IMF so much that it dedicated 4 entire pages of their report on Enemalta. The latest IMF report on Malta, by contrast, includes not a single sentence on the issue.

Therefore, if the Opposition continues with the approach taken in recent months, it is literally wasting energy on energy. If there is an area where the public will not trust the Opposition’s call for a return to pre-2013 policies, it is energy. No one wants to go back to high electricity prices, high emissions of the most dangerous air pollutants and high debt levels for Enemalta. Especially when the alternative is a progressive agenda of stable prices, lower emissions and a profit-making Enemalta.

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