Failure to attain renewable energy targets could cost Malta €36m in worst case

Malta could suffer penalties of between €2.9 million and €36.1 million if it fails to produce 10 per cent of its energy from renewable sources by 2020, according to estimates made by the National Audit Office.

The Audit Office said that it had sought to estimate Malta’s contingent liability on the basis of financial penalties that could be imposed by the European Court of Justice, statistical transfers and cooperation agreements.

The best case scenario presumed that Malta would only marginally fail to attain the relative renewable energy targets and thus would produce nine percent of the gross final consumption of energy from renewable sources by 2020. This implied that Malta’s contingent liability would relate to one percent of gross final energy consumption.

The worst case scenario presumed that in 2020 the exploitation of renewable energy sources would have reached one percent and thus the contingent liability will relate to nine percent of gross final energy consumption.

It was estimated that the contingent liability could amount to around €2.9 million (based on a five-year lump sum penalty and a subsequent periodic payment based on a presumed five-year period of non-compliance), and €36.1 million respectively for a one percent shortfall from the renewable energy targets.
Additionally, in the event that renewable energy targets remained unattained, there was also a risk that Malta would face further non-compliance costs, the audit office said.

It stressed that these were assumptions based on presumed scenarios in the event that the mandatory EU target was not attained.
The full report is available online at www.nao.gov.mt

01.07.2010
The Times of Malta