Alexander Demarco, the Governor of the Central Bank observed that when the massive subsidies were introduced in 2022, "energy prices had become volatile and had risen sharply after the Russian invasion of Ukraine at the time".

Hence, Demarco pitched for Malta to increase its investment in offshore renewables as a way to reduce Malta's dependency on fossil fuels and its exposure to their volatile prices, as his preferred exit strategy for the energy subsidies to LNG producers. According to Eurostat, Malta currently ranks bottom out of all EU countries from the share of electricity consumed that was generated by renewable energy sources (RES); just 10.7% of all energy consumed across the Maltese islands in 2024 was generated from renewable energy.

The island is aiming for climate neutrality by 2050 through a combination of renewable initiatives and carbon credit purchases from other countries. With help from EU funds it plans a second electricity inter-connector and new large-scale battery storage systems. The electrical energy mix in Malta consists of approximately:

• 70% local generation from LNG plants, (grey energy)
• 20% Malta-Italy inter-connector;
• 10% of local RES generation.

In contrast, Austria generated 90% of all its consumed electricity in 2024 from renewables while almost half (47%) of all energy generated within the entire European Union came from these clean energy sources. Simultaneously, Malta ranked fourth bottom in the EU-27 for the proportion of its total generated energy deriving from renewables. Energy Minister Miriam Dalli announced that Malta is expected to select a contractor for its first offshore floating wind farm by the start of 2028.

Four years ago, the National Policy for the Deployment of Offshore Renewable Energy was launched and issued a tender for Malta's first floating offshore wind farm. However, the commissioning date for the project remains uncertain.

As a consequence, the island ranked lowest in renewable energy (41st place) but performed better in climate policy (20th place) and greenhouse gas emissions (22nd place). Let us compare and contrast what measures have been taken so far by Dalli to kickstart investment in offshore renewables.

This ushered an issue of a pre-qualification Questionnaire (PQQ) phase for a modest 300 MW floating wind farm to be located in two preferred sites with our EEZ. The selected concessionaire will handle design, construction, operation, maintenance and decommissioning (with government-owned elements like export cables/substations).

Much of the Med. has deeper near‑shore waters and valuable wind resources where fixed foundations are not feasible - floating wind unlocks these areas. Obviously, the main challenges are complex maritime uses (tourism, fisheries, shipping), environmental permitting, grid evacuation and seasonal demand, port and supply chain readiness, and higher costs than established fixed‑bottom offshore wind markets. At this stage, once Malta started in the race for the offshore industry, let's review how other countries have progressed so far.

These include France, Portugal, Spain and Italy (developer activity and industry scale‑up) and Greece (a rapid policy push). These countries combine policy ambition, developer interest, and some demonstration or planning activity. France, Portugal (technology leadership), Spain and Italy (developer activity and industry scale‑up), Greece (rapid policy push). These countries combine policy ambition, developer interest and some demonstration or planning activity.

The trophy goes to France, which leads Mediterranean floating wind brigade, championing the first commercial-scale pilots now online or commissioning. In contrast, much of the Med. has deeper near‑shore waters and potential wind resources where fixed foundations are not feasible - floating wind unlocks these areas.

Key advantages being access to stronger, steadier winds and the ability to site farms away from tourist/coastal constraints. Main challenges in the region include complex maritime uses (tourism, oil bunkering, fish ranching pens, shipping), environmental permitting, grid evacuation and seasonal demand, port and supply‑chain readiness, and higher costs than established fixed‑bottom offshore wind markets.

Offshore wind remains underdeveloped in the Med. compared to northern Europe, with no permanent installations yet and only pilot projects like France's three-turbine setup. The region's deep waters favour floating technologies, and studies estimate a technical potential of 782 GW for floating offshore wind, concentrated in Libya, Tunisia, Italy, and Greece (accounting for 72% of the total), with an average levelised cost of energy (LCOE) of 93.4 €/MWh and capacity factors around 32%. Malta's efforts are now driven by the National Energy and Climate Plan (NECP), which commits to deploying at least 350 MW of offshore renewable capacity by 2030, potentially scaling to 380 MW, with further targets of 450 MW by 2040 and 2050.

This aligns with EU goals under the TEN-E Regulation and includes a focus on floating technologies due to the deep waters around the island. Following progress toward adopting a national policy on offshore renewable energy, the ministry recently identified potential marine zones for wind and solar projects and streamlined regulatory frameworks to attract investors.

The policy narrowed down six initial areas to two suitable sites for floating offshore renewables following a strategic environmental assessment. A major milestone is the launch of a competitive tender in December 2024 for Malta's first floating offshore wind farm, with a target capacity of around 300 MW (ranging from 280-320 MW), located beyond 12 nautical miles in what will be declared as the Exclusive Economic Zone (EEZ). This project is expected to generate up to 0.8 TWh of clean energy annually, complementing a strong solar infrastructure and helping triple its renewable energy share.

By July 2025, three consortia submitted pre-qualification bids: the Code Zero Consortium (led by SEP Malta Holding), Atlas Med Wind (led by Italy's GreenIT SpA), and Greece-based MCKEDRIK. These are currently under evaluation for technical and financial criteria.

Additionally, Malta is exploring floating solar through a Preliminary Market Consultation and plans to establish a new authority for overseeing offshore projects, with a broader offshore energy and green hydrogen strategy slated for a Preliminary Market Consultation (PMC). This was completed for a 50 MW floating solar project.

In conclusion, one recalls Demarco's advice concerning the policy of paying a €350 million annual subsidy to grey energy producers; ideally, funding should be redirected to turn the vision of offshore clean energy into reality.

George M. Mangion is a senior partner at PKF Malta