Readers will be shocked by this picture of a power station with a chimney belching dark smoke into the clear blue sky. Yes, this was the situation in one of our power stations which not so long ago was burning black coal that used  to be stored at the quayside in Marsa and, as can be expected on windy days, a fine black powder used to cover the entire harbour area.

When the PN government decided to stop using coal and start burning oil in the old power station at Marsa (targeted to be decommissioned in 2009 but still much in use today), the villagers rejoiced and looked to the future. Some blame the incidence of lung cancer or bouts of asthma to the carbon laden atmospheric conditions, which of course improved substantially when we changed from coal to low sulphur oil. However, this came at a cost as it increased rates charged to consumers. There were many protests about the high cost of living caused by staggered increases in the rates, with industrialists claiming subsidies to be able to stabilize their prices, especially since such upward revisions coincided at a time when recession hit their export markets badly.

There is no doubt that the inefficiencies of both the Marsa and Delimara generating plants (only reaching 23 per cent and 30 per cent maximum efficiency, not to mention the theft from smart meters) added handsomely to the cost of operations, and of course the credit rating of Enemalta was marked down due to its highly leveraged position with foreign banks (before the massive investment by Shanghai Electric). Many had criticized building an extension using a controversial prototype BWSC model running on heavy fuel oil (HFO). HFO may be cheaper to buy, but when adding the cost of storage and disposal of its obnoxious waste it is an expensive fuel in the long run. The BWSC plant can be converted to run on gas but probably it is expensive to convert it to run on diesel or other fuel oil with lower CO2 emissions, yet the government has promised to switch the operation to run on gas. Critics have hit out at the government saying that the BWSC plant is still burning heavy fuel oil two years later.

Electricity generation using a cleaner fuel was promised by this government, which took a gamble to quickly rush through a tendering process leading to the selection of a consortium of local and foreign investors which pledged to install a plant running on LPG to be commissioned, tested and running in six months' time. In the meantime, only minor dredging work has started in the bay where the Floating Storage Unit (FSU) will berth, but who cares, consumers have already started enjoying reduced rates and next year industry will follow.

Hot on the heels of the appointment of Electro Gas, a consortium led by a team of local companies (Tumas and Gasan) with other international partners which are to finance the commissioning of the gas-fired power station. The Tumas group needs no introduction as it is well known in Malta as owners of the Hilton hotel complex and the sprawling luxury residential apartments and marina at Portomaso, while the Gasan Group is an established business with various interests in automobile importation, hotels, insurance and other sectors. Gem Holdings is composed of the Tumas and Gasan groups and has partnered with German firm Siemens, the commodities trading arm of Azerbaijan's State energy firm Socar, and UK company Gasol to form Electro Gas Malta consortium. Hurray, next year exporters shall be provided with clean electricity at a price reduced by 25 per cent although the Chamber of Commerce complains that this rebate is not enough as we remain more expensive than our competitors in mainland Europe.

With a fanfare of publicity, the energy minister proudly announced the winning consortium as "a world class" team and their bid was able to get bank finance for the project to supply clean electricity at a fixed price for the first five years. The minister guaranteed that emissions will be cut by half, while the Opposition is digging its feet in saying, as it has right from the beginning, that having a monopoly Electro Gas with 18-year exclusivity to supply an essential national service can be dangerous. They reason (and not without merit) that owning the only gas-fired plant and related infrastructure for liquefied natural gas storage places any consortium in a powerful and perhaps envious position as can be said for other natural monopolies which were nationalized in the past (e.g., Tug Malta, Airport, Freeport, Sea Malta, MidMed Bank etc). On the other hand, one can safely say that privatization (even though sometimes on the cheap to secure employment) has proved to be a smart experience for the bidders, as all are doing well generating handsome profits while securing sustainable employment.

The consortium will build a new plant while the BWSC plant will be converted to gas in due course. All this against an undisclosed sum which is payable on contract and will guarantee provision of clean electricity at a fixed price for five years, with subsequent revisions. It was also decided that rather than build permanent tank structures on the quays (this was heavily criticized by the PN), it will store liquefied gas on a supply vessel permanently berthed at Delimara. The storage ship, with capacity of 126,000 cubic metres, has been criticized as being too big and it will dwarf any other container ship which enters the Marsaxlokk harbour and is quoted to have.

Enemalta has also signed a deal with a China state company to invest €320 million and acquire a minority shareholding, which will go a long way to buttress its much depleted capital that over the past decades has accumulated cash losses of €800 million (apparently owing creditors via a special purpose vehicle for the Delimara phase one and two plant). As can be expected with the appointment of a Chinese deputy chairman, one anticipates a root and branch review of current work practices that may lead to improved opportunities for an over manned Enemalta to better use its technical staff. Some may be seconded to the new company under current conditions, but will remain on Enemalta's books. All this fits into a strategy to have a mix of electricity supply if and when interconnector submarine cable to Gela in Sicily is functional as this gives us redundancy in supply and thus will not place all our eggs in one consortium.

But sometimes it does not rain, it pours, where electricity supply is concerned since only this week European Union has included the proposed gas pipeline between Malta and Sicily in a list of energy projects which may qualify as a subsidy from a total of €5.85 billion in funding. The proposed gas supply will be via a 150 km pipeline from Sicily to an offshore Floating Storage and Regasification Unit some 12 miles off Malta. This will provide a golden opportunity for Malta to be able to trade in gas supply markets if, and only if, it can successfully persuade other Eastern Med countries to link their gas fields to supply Northern Europe. Perhaps it is ironic that after 60 years of failed attempts to drill for oil/ gas both in territorial offshore waters, it is a pity that Lady Fortune has not smiled on us this year and we had another dry well in a drilling site just opposite Libyan waters.

Back to the energy problem the extensive infrastructure which the Electro Gas Malta consortium intends to build together with the future liquefaction plant connected to the gas pipeline to Italy will secure a bright and healthy environment. Malta adds another pillar to its thriving economy which this year has already registered a respectable 3.5 per cent GPD growth from a mixed economy. Hopefully, once the conversion to gas is completed, this will secure healthy living in a clean air habitat for the inhabitants of Marsa and the inner harbour area subjected to fine dust from the old Marsa plant or the accidental spillage of carcinogenic residue from burning HFO at the Delimara plant.

2015 welcomes us all to a brighter future.

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The writer is a partner in PKF an audit and business advisory firm