The stark reality

Our conscious price stability policy decision comes with a hefty cost to public coffers but the stark reality is that it would have been much more costly for our people, for our families and our businesses to carry the financial burden upon themselves

€1,700 is the very conservative amount of money our average households are saving every year thanks to the energy price stability policy of the Maltese government as a response to the unprecedented energy crisis brought about by the war on Ukraine.

This crisis is adversely impacting the whole of Europe.  On Friday, during an extraordinary meeting of the council of European energy ministers, I stressed that whilst we do need to send a strong market signal to curb the current high electricity wholesale prices, we have to ensure that, in the process, we do not impact our people and our economies negatively. Actions have to be beneficial to all member states.

There is no beating around the bush. Our conscious price stability policy decision comes with a hefty cost to public coffers but the stark reality is that it would have been costlier for our people, for our families and our businesses to carry the financial burden upon themselves.

In the face of high imported inflation, our commitment in protecting people’s incomes becomes even more pronounced. How could we tell our working families to let go on one of their twelve pay cheques simply because electricity prices shot up? How could we explain to a single parent, who this government supported so much in recent years and throughout an entire pandemic, that she might need to decide whether to pay her rent or drive her car? How could we force our pensioners to pay twice the price for gas cylinders to heat their homes this winter?

Despite the unprecedented challenges, above everything else we remain resolute in supporting our people’s quality of life. This is precisely what is underpinning our solid commitment of protecting the people from an otherwise very real risk of energy poverty.

Whilst it is true that the financial cost of these decisions is substantial, our decisions are guided and firmly grounded in the conviction that nothing pays more dividends than the wellbeing of our families. This is what is guiding the decisions taken by this government. We are making such calls not because they are easy but because they are right.

It is also important that we keep on driving energy saving and continue to improve our energy consumption patterns. Last week the entire public service started implementing specific guidelines that will see a substantial reduction in non-essential electricity use.

It is encouraging to see many in the private sector taking up similar initiatives. As a matter of fact, we are working with the commercial sector to start applying such measures too. Meanwhile we’ll be rolling out a campaign to bring households on board as well.

In the meantime, we are already implementing several measures to promote reduction in energy consumption, starting from public buildings, households and businesses. These measures include energy saving initiatives within the public sector, energy audits within enterprises, energy efficiency schemes for industry and renewable energy schemes for the residential sector.

Our current system of progressive electricity rates ensures that high spenders will keep on paying twice the European market rates and in the process partly contributing to keep lower bands for essential needs affordable.

However, one needs to be cognizant that the financial sustainability of these measures rests squarely on the strength of our economy. It would be pointless to subsidise the cost of energy if by so doing we would endanger the sustainability of public funds. This is why it is, perhaps today more than ever before, of paramount importance that we support the investment in our economy for it is this investment that will drive the much-needed growth to support this kind of expenditure.

We want our corporate community to invest in a greener and more sustainable economic model. The decarbonisation of our economy cannot and will not be the victim of this energy crisis. Indeed, we want the opposite to happen. We want to accelerate Malta’s transition towards a greener and renewable energy source that will accentuate Malta’s green transition.

This is why in the last months we flanked the household renewable energy investment schemes with an unprecedented call for large scale renewable energy farms for our commercial community to invest in. A similar scheme launched a year ago led to 36 new solar farm projects that generate enough clean energy to support more than 4,200 household and reduce seven tonnes of carbon dioxide yearly. This time around our ambition is to generate enough solar and wind energy for 6,000 additional households.

This is just another step forward and we will be doing much more.

Our message is clear, just like we did with the pandemic this government will be four-square behind the people. Our families will not be left alone but we all have to do our part, we will keep incentivising a more responsible use of energy whilst driving investment in renewables. Our focus is on the quality of life of everyone living on the Maltese islands.