Issue link: https://maltatoday.uberflip.com/i/507285
maltatoday, WEDNESDAY, 6 MAY 2015
13
Business Today
H
ow can we tell if the
constant barrage in the
media about combating
climate change is not
another hoax like the
millennium bug?
What is undeniable is the increase
in carbon dioxide concentrations
and other greenhouse gases, such as
methane and nitrous oxide, caused by
our activities – mainly the explosion
in car ownership, not to mention
attracting more heavy industry.
Reliable sources tell us there are
several lines of evidence to prove that
carbon dioxide has been on the increase
in the past two decades. We know that
much carbon dioxide is emitted – just
recall how, not so very long ago, we
ran our Marsa power station on coal
and later switched to burning fossil
fuel, and of course with the increase in
the influx of tourists there are more car
emissions.
All this can be attributed to human
activities, which account for the increase
in carbon dioxide concentrations.
Certainly, concentrations of carbon
dioxide in the Mediterranean have
increased along with the atmospheric
concentrations, which is giving us
colder winters and higher humidity in
summers.
All lines of evidence taken together
make it unambiguous that the increase
in atmospheric carbon dioxide
concentrations is human-induced
and is primarily a result of fossil fuel
burning. It is a fact that greenhouse
gases, when controlled, can serve
a useful purpose: that is, to absorb
infrared radiation from the sun and re-
emit it in all directions.
Without this natural greenhouse
effect, primarily resulting in the
creation of water vapour and resultant
carbon dioxide, this functions like a
shield to protect the earth's surface,
which otherwise without it its
mean surface temperature would be
intolerable instead of the habitable
average temperature that results.
Increasing the concentration of
greenhouse gases directly increases
the atmosphere's "optical thickness"
for infrared radiation, which alters
the total amount of solar radiation
absorbed by earth. The same amount
of energy earth receives as solar
radiation, in a steady state, must be
returned as infrared radiation; the
energy of radiation depends on the
temperature at which it is emitted and
thus determines the mean temperature
at the emission level.
Readers may expect this is another
article extolling the benefits of clean
air resulting from massive new
investment in plants generating green
energy – the answer is that only a few
(if any) do shed any tears for our lack
of success in reducing the national
carbon footprint, which undoubtedly
is contributing to climate change.
There have been many conferences
and press releases by the EU,
particularly on Renewable Energy
Systems, and various attempts to
propose ambitious goals for Member
States to step up their investment in
promoting green energy. The target
was that by 2020, the EU would
seek to obtain 20% of its total energy
consumption requirements from
renewable energy sources.
Malta has so far been a laggard in
this regard, as only small steps have
so far been taken. As a definition
renewable energy includes wind, solar,
hydro-electric and tidal power as well
as geothermal energy and biomass,
and from studies published by the EU
one notes that Germany leads the pack
as a country which has invested the
highest amount in this sector, claiming
to be the world's first major renewable
energy economy (in 2010, investments
totalled 26 billion euros).
According to official figures, some
370,000 people in Germany were
employed in the renewable energy
sector in 2010, and it is no surprise
to discover that most companies
benefiting from this sector are small
and medium sized companies.
One may question why Malta, with
better exposure to the rays of the sun,
has not responded to this call to increase
production of electricity from the use
of photovoltaic panels, considering
that prices for the equipment have
been dropping such that for example in
the four years prices for solar modules
in Germany dropped from €3 to €1
per peak watt.
During that same period production
capacity surged with an annual
growth of more than 50% while China
increased its market share from 8% in
2008 to over 55% in the last quarter of
2010.
It is encouraging to note that in 2012
the price of Chinese solar panels had
dropped considerably for the supply
of panels made of crystalline modules.
One may observe that awareness in
Malta of the benefits of using such
technology has changed since the
arrival of Shanghai Electric Power,
which as an investor plans a massive
increase in PV panels linked to the
national grid.
The solar cell is the elementary
building block of the photovoltaic
technology and so far research in new
technology has been making giant
steps by testing new prototypes made
of semiconductor materials, such as
silicon, which due to their properties
makes them highly conductive and in
turn use ingenious ways how to capture
the energy of the sun and convert it
into electricity through an inverter.
Recently the photovoltaic market
has flourished, especially in Germany,
followed by Spain and Italy, while one
notes that Greece is due to be the next
fast-growing market. This was due to
several types of incentives offered by
EU countries, including tax rebates,
cash grants and feed-in tariffs – all
this stimulated growth in this nascent
industry.
Naturally the main stimulus for
household users is the comparatively
high cost of electricity tariffs charged
by national or other publicly owned
energy providers.
Back to Malta, electricity provider
Enemalta enjoys a monopoly so some
contend there has been no serious
attempt to switch from burning oil to
gas, which is considered safer although
the subsea inter-connector with Sicily
does open new possibilities, yet one
may question what are the main
factors that impeded Enemalta from
encouraging a steady growth of PV
panels among household owners and
in particular ample use by industry?
The answers can be varied but surely
the demographic and geographic
characteristics of the island create
issues of spatial planning, given that
Malta is a very small and densely
populated state but in the past there
was no political will to bite the bullet
and migrate to gas, as evidenced by
investing €200m in the BWSC plant
to run on heavy fuel oil.
As regards installation of solar
panels it is not all gloom and doom
since starting from zero in 1995
there has been a huge leap in rooftop
installations to 2010. Official statistics
indicate that PV has grown at an
average yearly rate of 35% from 1995
to 2005 (1,8 kW to 40 kW) and of 63%
between 2005 and 2010.
Ask any architect and he will point
out that spatial planning takes into
consideration the issue of devoting
open areas to renewable energy
systems (RES) that often clash with
other planning needs and for this
reason large-scale RES installations
are not practical in Malta.
Having acknowledged that Malta
needs to catch up on lost time in
green energy, the MRA had issued
a tender for consultants to prepare a
CBA (cost benefit analysis) following
guidelines issued by the Commission
i.e. delivering the internal electricity
market and making the most of public
intervention C (2013) 7243 Final,
together with the accompanying
Staff Working Document – European
Commission guidance for the design
of renewable support scheme.
It is common knowledge that
reports of this calibre will include
various studies, such as CBA, that
can assist the MRA to develop a new
policy framework for promoting the
installation of PV in households by
setting up a rebate scheme for users
together with a respectable grant, with
a view to attaining the prescribed clean
energy. Naturally such an important
policy document included dialogue
with all the stakeholders and for this
purpose one notes the implementation
of risk mitigation and a scientific
survey which incorporates market
research regarding future tariffs.
In conclusion, can the environment
minister, Leo Brincat, succeed in
catching up with other EU states and
achieve the desired target of 20% of
total energy sourced from non-fossil
fuels by 2020 – surely the impossible
we do now, miracles can wait.
gmm@pkfmalta.com
George M. Mangion is a partner in
PKF, an audit and business advisory
firm
References:
MRA (2009): Malta Resource
Authority, Analysis of Potential
for Co-Generation on the Maltese
Islands. Available at: