Floating wonders, energy horizons and burning fossil fuels

ese things can take as long as a decade to establish, and right now, the slow rate of progress is deeply concerning for the industry


PKF took the plunge this month and hosted an international conference focusing on renewables held at the Hilton in collaboration with the Times of Malta. Attendance was good but could have been much better considering the importance of our future supply of green energy. More conferences are in the pipeline.

16 speakers explained how Malta can take hold of its future destiny to become an explorer of green hydrogen. For Castille and bankers, this looks like a pipe dream for which there is no influencer to rock business leaders to start putting money where their mouth is.  Malta’s decarbonization journey simply cannot accelerate, if we don’t have the right technology, low-cost capital, and the right expertise to deliver the solutions we need. In offshore wind, right now northern countries are standing at the epicentre of an enormous seismic shift for a global energy system.

A decade from now, the industry will have grown into a well-oiled machine, with industrial processes ticking along at great scale.  Right now, however, pioneers are only just beginning this journey, and being active in this moment, feels both thrilling and terrifying for Europe’s decarbonization. As a nascent industry, it must innovate, think on its feet, embrace constant change, and absorb the impact of huge challenges.

Back home, it is surprising how local banks showed no interest to support the PKF renewables event, even though in Europe, banks such as HSBC form part of a successful Power to X consortium in Germany. Speaking at the PKF event, hon Minister Miriam Dalli blamed the banks which sit on idle capital (upwards of 24€ billion). In her opinion, they need to start the ball rolling to secure energy sustainability. These are like horses brought to the water but refuse to drink.

On a domestic scale, one wonders how smooth it was for Castille to attract private investment for Electrogas, which in turn honoured an electoral promise to lower electricity tariffs at its launch. Now, Castille is pumping €400 annually to subsidise energy and cost of cereals. The penny has dropped in Belgium this week - it launched a mega renewables conference. It groups the initiatives of nine European countries holding a summit aimed at up scaling green power generation spurred by the fallout of the Ukraine war and the push for meeting climate change protocols.

The world is in a desperate need of renewable energy. Many experts agree that it is a complex task for Castille to design a future energy system that can support a cost-competitive green transition, reduce dependence on LNG imports, and ensure a resilient and reliable energy supply. But Malta stands at an advantage as it is surrounded by offshore waters (part of EEZ) while blessed with over 300 days of sunshine.

The finance minister was clear in his message to the Chamber of Commerce delegates. With a grin on his face, he encouraged members to take the bull by the horns and start building a technical operation consisting of mega rows of floating PV panels and floating sea wind turbines. The area potentially allocated for renewables is in shallow waters close to Hurd’s bank - it is almost three times the island’s acreage.

PKF has been making the rounds with international operators to discuss forming a consortium. This consortium will consist of both local partners and existing producers in Europe. If it plays its cards well, Malta could generate 25GW of green power by 2050 provided it starts in earnest. A potential for exporting green power to the European grid can be facilitated either with the use of a second inter connector or a subsea hydrogen ready gas pipe.

Obviously, at its peak, this export potential will in money terms beat both gaming, tourism, financial services sectors - combined. Talking to a number of international leaders, one can mention giants such as Ørsted, Vestas, and EVP Renewables. Starting with Ørsted, they plan to install 50 GW renewable energy capacity by 2030 – the vast majority of which will be wind energy. Some of this energy will be fed directly into the grid, while some will be used to produce renewable hydrogen and e-fuels.

Being part of such a fundamental change this revolution brings significant responsibility to business leaders.  The drive to decarbonising Malta’s society, starts by cutting co2 from the air produced by over 400,000 conventional cars and construction engines, dense pollution from aviation and vessels that deliver cargo in our Freeport.  It’s time for Europe, to unite in order to bring wind energy to hard-to-electrify sectors.

To take the task of renewable hydrogen: starting from ambition to tangible reality, simplicity and speed are of utmost importance. Binding targets for decarbonization in industry and transport are needed to trigger investments into Power-to-X and deliver a globally competitive, demand-led hydrogen economy. Here, one needs to mention how the demand side has ordered new green vessels, while Ørsted, for example, is building production capacity for green marine fuels.

Operators are encouraged by the promulgation of the Renewable Energy Directive III, Fuel EU maritime, and ReFuel EU aviation.  Another major player is Danish Vestas. They are planning for scale-up at every corner of its business. It’s reflected in the design of its technology, the manufacturing footprint, its holistic approach to service, digitalisation and project development.

A fully decarbonised energy system will be uncharted territory for Vestas, since they are working to ensure that technology and expertise can be a beacon for those navigating in this new arena.  This involves Vestas discussing how they can rethink sea auction methods to enable healthier business cases across the wind energy value chain.

There is essentially one question that keep operators up at night; how are they to scale-up the offshore industry to meet EU ambitions? At the industry level, all are ready to act fast; it takes roughly two to three years to set up a new manufacturing facility to support a promising offshore wind value chain. What will hold everyone back, however, is the delay arising from bureaucracy and permits to link to grid networks, and infrastructure; ports, securing enough vessels to install larger wind projects.

These things can take as long as a decade to establish, and right now, the slow rate of progress is deeply concerning for the industry. Not to underestimate, players also have a huge journey ahead to train enough skilled talents to support a decarbonisation journey in Europe.

The European Union recently set a goal to double the proportion of renewables in its energy mix, to 42.5 per cent, notably by making it easier to get permits to install the infrastructure. The war in Europe has shown how fragile energy security can be.

We need to build up sustainable supply chains capable of delivering unprecedented growth in wind and solar power. Access to acreage, effective regulatory processes, control of inflation and healthy economic margins will all be required. Will our leaders smell the coffee?

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