Enemalta spent less money on upgrading its distribution grid last year than it had a decade earlier, despite its infrastructure having to cater for a significantly larger and more power-hungry population.
The electricity company spent just over €21.3 million on infrastructural upgrades in 2014, at a time when Malta’s population stood at roughly 434,000 people and monthly energy demand averaged 339 megawatts.
Fast-forward 10 years and the company’s capital expenditure remained virtually unchanged even as Malta’s population and energy demands ballooned.
Enemalta spent €20.2 million on upgrading its high- and low-voltage networks in 2023, a year when Malta’s population was 29 per cent larger than in 2014 and average energy demand was roughly 39 per cent higher, according to National Statistics Office data.
The chronic lack of investment in the national power distribution system has led to a series of power cuts across the country, angering residents, frustrating tourists and leaving business owners out of pocket.
Energy Minister Miriam Dalli has argued that Enemalta now has an “unprecedented” mandate to dramatically improve distribution networks, following an even more dramatic series of nationwide power cuts in the summer of 2023.
But data published by the National Audit Office this week suggests that even when Enemalta had the money to upgrade Malta’s networks, it failed to do so.
Spending shortfalls were especially acute when it came to high-voltage network upgrades. Between 2014 and 2023, Enemalta only spent around two-thirds of the money allocated to it to improve these networks.
That meant more than €60 million it had available to upgrade high-voltage networks across that time period went unused.
Enemalta has blamed this summer’s spate of power cuts on faults to that very same high-voltage network – an underground network of 132,000-volt cables used to move electricity from power stations and the interconnector to distribution centres across the country.
When asked by the NAO to justify this expenditure failure, the company blamed constraints on human resources and trouble sourcing high-voltage cables internationally.
It also argued that the underspend on high-voltage networks had to be seen in the broader context of investment in low-voltage networks, which move electricity from substations to households and businesses.
2023 high-voltage investment among lowest in the last decade
But even when investment in low-voltage networks is factored in, it is clear that investment stagnated, even as demands on the national energy grid skyrocketed.
Enemalta’s peak investment year was 2017, when it spent €31.5 million on capital projects. By 2019, spending had dropped to €17.5 million before settling at around €20 million annually.
Enemalta's forecast showed a 3% increase, but actual demand rose by 14%
All the while, demand for energy kept growing and growing: Enemalta’s forecasts were for power demand to grow three per cent year-on-year between 2022 and 2023. Instead, demand rose 14 per cent.
The rise in demand was also evident in the growing number of electricity meters that Enemalta was installing. In 2014, there were 291,426 meters installed across Malta and Gozo. By 2023, there were more than 377,000 of them.
Enemalta spent more in capital expenditure in 2014 - €21.3 million - than it did in any of the years between 2019 and 2023.
Throughout this past decade, Enemalta has been the responsibility of five separate ministers - Konrad Mizzi, Joseph Muscat (who assumed the portfolio following a 2016 reshuffle), Joe Mizzi, Michael Farrugia and Miriam Dalli - and countless chairmen, CEOs and executive chairs.
Despite the NAO report laying bare the stagnation in investment, Enemalta has pushed back against suggestions that its investment strategy was lacking.
Other energy companies across the Mediterranean region had suffered similar outages last year due to the high temperatures, it told the NAO, and just 0.6 per cent of its 14,000 high-voltage joints had failed in the summer of 2023.
That 0.6 per cent failure rate, however, led to days of nationwide blackouts and an urgent meeting of social partners, who in July 2023 demanded action from Robert Abela’s government.
Abela responded by pledging to invest €30 million annually to improve network infrastructure, and Enemalta engineers have since laid several kilometres of new cables in an effort to stem problems.
Those works were evidently not enough, as intermittent power cuts have continued to plague the country this summer, as summer temperatures hit.
Energy Minister Dalli acknowledged as much in a radio interview on Saturday, saying work to revamp the distribution network “has to be done in phases”.
In the meantime, Enemalta has turned to what its executive chairman Ryan Fava described to Times of Malta as its “Plan B” – a series of large generators parked on streets across the country, temporarily feeding power to affected areas.
So far, 14 of the container-shaped generators, which run on diesel, have been deployed. More are on the way, Fava said on Saturday.
Breaking away from the company's defensive tone towards the NAO findings, the Enemalta boss acknowledged that works on the distribution network throughout the years "should have been more aggressive”.
Some localities remained without power for all of Friday night and much of Saturday, however, while residents in others reported multiple brief and sudden outages that damaged appliances and other equipment.
In Sliema’s Milner Street, for instance, one resident keeping tabs counted over 60 power cuts throughout the day.