The Malta Independent 8 March 2021, Monday

Is climate change stupid?

George M Mangion Tuesday, 19 January 2021, 09:37 Last update: about 3 months ago

In any discussion about climate change and its sister topic "renewable energy" the critical issue is how quickly the world can implement decarbonization to stave off the worst effects of rising temperatures. Simply put, this usually means switching to renewable energy sources such as solar, wind and hydroelectricity as the latter does not emit carbon dioxide and other greenhouse gases that contribute to global warming. Energy use is changing fast. The shift to renewable sources, however, needs to happen faster, not just in power generation but in heating, buildings and transport, to check the rise in global temperatures.

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Many studies show how renewables could supply four-fifths of the world's electricity by 2050, massively cutting carbon emissions and helping to mitigate climate change. But solar and wind power have to be fully integrated, with sustainable bioenergy, hydrogen fuel cells providing another key part of the mix. All this means speeding up innovation in business and technology. In simple terms, it means the world needs to start taking collective action to promote renewable energy before it is too late.

During the past decade, Malta's energy policy focused on maximizing an effective renewable energy potential. So far, it does not have a natural gas network with mainland Europe, consequently LNG is supplied to the power plant via an FSU, although use of natural gas in future niche applications may start to develop if the Malta-Italy gas pipeline is successfully implemented.  

As a general comment, one may say that clean energy has far more to recommend it than just being "green". In the EU, there is a plan that reaching zero emissions by 2050 can be doable.  Everyone now acknowledges that the Green sector creates jobs, makes electric grids more resilient, expands energy access in developing countries and helps lower energy bills. All of these factors have contributed to a renewable energy renaissance in Malta as governments over the years have commissioned studies on both wind and solar energy plants. Regrettably, the spirit was willing but the body was weak. In 2019, Malta was at the bottom of the table in terms of the share of electricity coming from renewable energy.

Eurostat reveals we are much of a laggard compared to others since we only generated 8% when compared to the average 34% of the EU. At the lower end of the scale, the share of electricity from renewable sources was (8%), Cyprus and Luxembourg (10%). The target plan for the EU is to become the world's first climate-neutral continent by 2050 - an admirable objective behind the European Green Deal. Obviously, most will agree that the use of renewable energy has many potential benefits, including a reduction in greenhouse gas emissions, the diversification of energy supplies and a reduced dependency on volatile fossil fuel markets.  

The trophy goes to Austria which in 2019 had more than 79% of electricity consumed generated from renewable sources. But the new hobby horse is hydrogen fuel technology.  Some criticize that the EU Green strategy is not as revolutionary as it may seem when it concerns hydrogen. Currently, it gives top priority to reduce the use of fossil fuels. However, it acknowledges that other forms of low-carbon hydrogen produced by electrolysis using electricity generated by LNG will play a pivotal role in the short- and medium-term.  

The EU strategy also emphasises the need for significant support for research and innovation at an international level, both for technology development and cross-border trading, particularly for an ambitious plan to start using hydrogen fuel cells. Without any doubt, apart from nuclear power, the use of green hydrogen is the best option today for the decarbonisation of the energy system, yet risks associated with this nascent technology must never be underestimated.  

One cannot label this as a panacea as there exists challenges to translate this revolutionary concept into a commercial reality with proper regulation for the global market of hydrogen trading.  

Back to Malta's present electricity production and one can appreciate the effective use of the electricity interconnector operated by Enemalta plc in coordination with the transmission system operator in Italy, Terna. According to this arrangement, the Maltese electricity system is being treated as a virtual consumption and production point connected to the Italian transmission grid.  

The interconnector is claimed to have reduced our cost of electricity and emissions when compared with other competing sources of power generation. As stated earlier, the planned gas pipeline interconnection between Malta and Gela (Sicily, Italy) has reached the permitting stage and technical, financial and environmental studies are finalized but unfortunately the €400m project has not qualified for financial support from the EU. The latter seems to prefer the use of hydrogen compared to LNG as the former is 100% carbon neutral.  

All the same, efforts to support the deployment of renewable energy, especially photovoltaics, solar water heaters and heat pump water heaters (which are particularly well suited to Malta's geographic location) and incentivizing the use of electric cars are afoot. One must also acknowledge the technical, geographical and spatial barriers limiting renewable energy potential in Malta.  For such reasons, it must start again to support the exploitation of viable indigenous sources of natural gas in offshore waters. Perhaps the appointment of Dr Miriam Dalli as the new energy minister will galvanize the nation to attract foreign capital to continue seismic studies in our vast Continental shelf. Malta does not have a natural gas network with Europe (LNG is purchased from an Azeri firm and supplied via an FSU), although uses of natural gas in future niche applications may start to develop if the Malta-Italy gas pipeline dream becomes reality.  

A recent comment by Energy Minister Dalli on this topic, following the refusal by the EU to fund the project, was that government would seek alternative financing arrangements to proceed with the investment. In her plan, this pipeline will initially carry LNG and can later be switched to accommodate a hydrogen flow. 

This is a pragmatic stand as government appears committed to keep depending on LNG, at least in the short-term. This policy is a millstone around our necks because the state is committed to buy electricity from Electrogas (an Azeri company running an LNG plant) based on an 18-year fixed supply contract.

In conclusion, the planet urgently needs to be protected from the damaging forces of climate change and one expects Malta to do its share as a signatory to the Paris accord.

 

The writer is a partner in PKFMalta, an audit and business advisory firm.

 


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