Energy Mix Overview

At present, there are five main sources of electricity generation in Malta:

• a 205 MW Siemens combined-cycle gas turbine power plant, owned and operated by a private consortium of investors;
• a 144 MW dual-fuel power plant operating on a combination of gas and diesel;
• a 200 MW electricity interconnector between Malta and Sicily, owned and operated by Enemalta Plc as the sole buyer and supplier of electricity in Malta;
• a share of approximately 10% renewable energy generation from private and small-scale commercial land-based photovoltaics; and
• a 60 MW temporary diesel-fuelled power plant.

Over the past decade, Malta has seen a significant increase in renewable energy generation as a share of supplied electricity. According to data from the National Statistics Office (NSO), the share of renewable energy sources (RES) in the overall energy mix increased from approximately 1.5% in 2013 to approximately 10% in 2023. To date, most of the country’s renewable energy has been derived from solar photovoltaic (PV) installations, which constitute 97% of its renewable energy production. These developments correspond to a generation and supply capacity of 241,125.9 kWp.

Notwithstanding encouraging levels of RES development, Malta’s overall share of RES in final energy consumption remains one of the lowest in Europe, with the main challenges in expanding RES relating to spatial constraints and limited renewable energy potential. While the waters off the coast of Malta offer a potentially expansive area for offshore renewable energy development, deep bathymetry has hindered the deployment of conventional fixed offshore structures. Recent advancements in offshore floating technology have, however, led to a renewed focus on offshore RES potential and prompted the publication of the National Policy for the Deployment of Offshore Renewable Energy (NPOR) in 2023, with a focus on offshore floating wind and solar projects (including hybrid systems comprising both offshore wind and solar technologies).

Energy Transition and Applicable Targets

The initial steps in Malta’s energy transition have been to move away from carbon-intensive heavy fuel oil for power generation, by means of:

• decommissioning the 1953 Marsa Power Station;
• developing an electricity interconnector with Sicily;
• converting a principal power station to run on natural gas; and
• developing a combined-cycle gas turbine power station.

Following such developments, the electrical energy mix in Malta consists of approximately:

• 70% local generation from gas-fired plants;
• 20% direct imports over the Malta-Italy interconnector; and
• 10% of local RES generation.

As part of the EU’s Green Deal initiatives, Malta’s official RES targets are 11.5% contributions in the gross final energy consumption by 2030. Nevertheless, the country has set more ambitious targets, with aims for 25% share of RES in the overall energy mix by 2030. In addition, Malta is aiming for climate neutrality by 2050 through a combination of renewable initiatives and carbon credit purchases from other countries.

Malta’s energy transition in the run up to 2030 will focus on several areas of energy efficiency, RES and energy security, including but not limited to:

• development of floating offshore wind and solar farms;
• expanding the capacity of the electricity grid infrastructure to handle increased intermittent energy;
• increased energy efficiency of buildings;
• developing a second electricity interconnector with mainland Europe;
• investment in energy storage capacity; and
• planned development of a hydrogen-ready gas pipeline with Italy.

Spatial limitations and resource potential are the main factors influencing the future deployment of RES. Owing to its geology and topology, the production of cheaper forms of RES such as hydro and geothermal energy are not viable options for Malta, which has its highest point at only 253 metres above sea level and no significant thermal gradient or any water bodies. Wave and tidal energy potential is also considered very limited, and efforts to tap into this RES are still at an initial research stage. Biomass production is also not deemed a viable option, due to freshwater scarcity and limited land availability.

These circumstances, together with deep bathymetry in territorial waters, have resulted in Malta focusing on domestic and small to medium-scale solar PV development to date. Recent advancements in offshore floating technology have, however, created new opportunities for diversification in RES, particularly offshore wind. Accordingly, floating offshore wind and solar energy are increasingly expected to play a key role in reaching 2030 RES targets for Malta, which may include hybrid systems comprising both offshore wind and solar technologies.

In addition, waste-to-energy plants are also being further explored as a means of increasing RES contributions and as a solution to landfill capacity issues. To date, Malta has developed biogas production primarily from organic waste through anaerobic digestion processes by such waste, to produce biogas for electricity generation. The main biogas plant operator is Wasteserv Malta Ltd, which operates the Sant’ Antnin Waste Treatment Plant in Marsascala. Biogas is largely derived from food waste, agricultural residues and green waste; such projects will play a role in increasing Malta’s RES portfolio as well as in reducing landfill methane emissions.

Investment in RES has increased over the past 12 months, leading to corresponding increases in RES electricity of 8.3% over the previous year, in terms of both generation and supply. Nevertheless, the percentage of RES in the overall energy mix has plateaued and risks regressing due to rising energy demand, unless increased efforts in RES deployment are made.

Population growth and increasing tourism are leading to a situation where energy demand is increasing at a faster level than RES deployment on land. For this reason, the government is evaluating the potential for development of floating offshore wind and solar farms in the run up to 2030, as the principal means for achieving renewable energy targets. The main developments that will facilitate large-scale RES deployment include:

• the launching of the NPOR, which provides a strategic framework aimed at promoting the development of offshore renewable energy projects, such as wind and solar, within Malta’s exclusive economic zone (EEZ); and
• ongoing upgrading of electricity distribution networks to manage electricity fluctuations and increased energy loads, in a manner that ensures network reliability and reduces the risk of network disruptions.

The energy market in Malta is primarily regulated by a set of national laws, EU Directives and regulatory frameworks, aimed at ensuring market liberalisation, promoting renewable energy and supporting sustainable development and construction of RES projects.

The following are the key laws, regulations and legal frameworks that govern the licensing and operation of RES projects.

Primary Legislation

The Regulator for Energy and Water Services Act (Chapter 545 of the Laws of Malta) established the Regulator for Energy and Water Services (REWS) as the primary regulatory body overseeing energy and water sectors in Malta. REWS is responsible for:

• licensing;
• tariffs;
• market monitoring; and
• ensuring compliance with EU Directives.

The Environment Protection Act (Chapter 549 of the Laws of Malta) regulates environmental assessments and ensures that energy projects comply with environmental standards. It plays a role in regulating emissions from power plants and renewable energy installations.

The Development Planning Act (Chapter 552 of the Laws of Malta) is managed by the Planning Authority (PA), and governs land use and site permitting for energy installations, including renewable energy projects such as solar farms and potential offshore wind sites.

The Climate Action Act (Chapter 643 of the Laws of Malta) established the Climate Action Authority (CAA), responsible for:

• the exercising of climate action;
• co-ordinating and overseeing mitigation and adaptation policies; and
• the reporting of climate action.

Subsidiary Legislation

This includes the following.

• the Electricity Regulations (Subsidiary Legislation (SL) 545.34): these implemented the EU Electricity Directive (2003/54/EC) and marked the liberalisation of Malta’s electricity market in terms of electricity generation, allowing for third-party access to the grid (note that Malta has a derogation until 2027 in relation to the unbundling of transmission and distribution systems).
• the Environmental Impact Assessment Regulations (Subsidiary Legislation 549.46).
• the Development Notification Order (Subsidiary Legislation 552.08).

Policy Documents

The National Energy and Climate Plan (NECP) is a strategic planning and policy document that follows the scope of the Energy Union and covers its five dimensions:

• decarbonisation;
• energy efficiency;
• energy security;
• internal energy market; and
• research, innovation and competitiveness.

The NPOR (see 1.1 Energy Transition) outlines Malta’s approach to establishing offshore wind and solar power sources. The policy sets out six strategic offshore zones for potential offshore wind and solar energy deployment, and identifies three specific locations where these offshore projects will connect to the onshore grid at Delimara, Magħtab and Marsascala.

Upcoming Legislative Changes

In 2021, Malta enacted the Exclusive Economic Zone Act (Chapter 625 of the Laws of Malta), enabling the designation of an EEZ and EEZ areas adjacent to territorial waters – this without prejudice to Malta’s final EEZ designation. The government is currently discussing a bill in parliament that aims to amend Maltese laws in order to regulate anticipated large-scale offshore RES development outside Malta’s territorial waters in designated EEZ areas.

In addition, there has been notable regulatory focus on expanding the energy distribution of battery-energy storage systems, to enable increased renewable generation. This includes efforts to modernise the electricity distribution network, with the aim of enhancing network resilience, capacity and reliability.

The government also launched a new national policy for the deployment of offshore renewable energy in August 2023, which was further updated in October 2024 (see 6.2 Offshore Project Development).

The main authorities and government bodies that regulate Malta’s RES market include the following.

The Ministry for the Environment, Energy and the Regeneration of the Grand Harbour (the “Energy Ministry”)

The Energy Ministry is responsible for a wide range of functions aimed at fostering sustainable development, environmental protection and the efficient management of energy resources (among others). It plays a key role in shaping Malta’s response to energy and climate challenges, and in ensuring that laws, regulations and policies are aligned with EU Directives and national priorities.

The Regulator for Energy and Water Services (REWS)

Established under the Regulator for Energy and Water Services Act, REWS oversees the regulation of energy and water sectors, including the licensing, compliance and monitoring of energy providers. REWS is responsible for setting tariffs, enforcing renewable energy policies and ensuring adherence to EU Directives on energy efficiency and sustainability.

The Environmental Resources Authority (ERA)

The ERA is Malta’s main environmental regulatory body, tasked with safeguarding environmental quality. It conducts Environmental Impact Assessments (EIAs) for new energy projects and ensures compliance with environmental laws. The ERA works closely with other authorities to manage the environmental aspects of renewable energy projects, land use and pollution control.

The Planning Authority (PA)

The PA regulates land use and development permits for energy and infrastructure projects, including renewable energy installations, both land-based and offshore. The PA collaborates with the ERA and REWS to ensure that projects meet planning and environmental standards.

The Climate Action Authority (CAA)

Created in October 2024 under the Climate Action Act (replacing the Malta Resources Authority), this authority co-ordinates Malta’s climate policies, especially in alignment with EU climate targets. The CAA plays a central role in implementing the low-carbon development strategy and in promoting renewable energy, emissions reductions and other climate-related measures.

Under Maltese law, REWS and the PA are the main authorities that oversee the RES application process. Said authorities co-ordinate the various required permits and approvals, particularly for medium to large-scale projects over a certain kilowatt threshold. These requirements would include EIAs and development permits from the PA, and licensing requirements by REWS for electricity generation and grid connection. Exceptions to general licensing requirements are with respect to domestic RES installations up to 16 amps per phase, whereby a generation licence is not required.

RES projects, particularly with respect to large and medium-scale projects, are strictly regulated under Maltese law to ensure the safety and integrity of the grid as well as conformity with spatial planning rules and environmental considerations. These regulatory requirements form part of the framework for meeting Malta’s renewable energy targets, and align with EU standards for enhanced clean electricity generation.

To date, solar PVs have been the main adopted technology, although the relevant rules and regulations arguably also apply with respect to other RES technologies that have not seen large-scale deployment. In addition, potential large-scale projects may also need to participate in calls for project proposals, as REWS issues specific calls to control capacity allocations.

The ownership and transfer of renewable energy assets such as solar or wind farms are not specifically catered for under Maltese law; arguably, the general principals of civil law will apply. Energy asset transfers are also expected to ensure consistency with energy policy, national security and competition law considerations. In addition, there are also indirect restrictions and considerations related to regulatory oversight, project approvals and eligibility requirements for government incentives.

REWS and the PA oversee licensing and permitting for energy projects; any potential transfers of ownership and control of licensed and permitted installations must ensure that such transfers align with regulatory standards. Any new owner of a renewable energy asset is required to comply with existing permits and licences, and must meet eligibility criteria for subsidies, feed-in tariffs or grants (if the assets receive such support). This is particularly fundamental for large-scale projects that are subject to tendering processes and additional conditions, in order to maintain eligibility for incentives or public funding. As a result, ownership changes for large-scale renewable projects must go through review processes to ensure compliance with local energy policies and sustainability goals, particularly given Malta’s push towards expanding its renewable energy capacity by 2023 to meet and exceed EU-mandated targets.

Until 2004, Malta’s electricity market was a closed system with one State-owned generator, distributor and supplier of electricity. Malta has gradually opened its renewable energy sector up to foreign investment and diversification of ownership of energy infrastructure. Nevertheless, such developments involve specific regulatory considerations due to the impact on national energy security, and necessitate compliance with EU investment guidelines. Key approvals are required, particularly for large-scale renewable projects, with REWS overseeing many aspects, from licensing to grid access both for local and for foreign entities.

Foreign investments must align with energy policy goals, focusing on sustainable growth and minimal environmental impact. Pursuant to the publication of the NPOR, Malta is currently developing an offshore renewable energy strategy with a view towards expanding renewable generation with private sector involvement, including through foreign entities.

Owing to the various vested interests in the waters surrounding Malta and the many commercial activities and national operators involved, the NPOR has undertaken creating a “one-stop shop” with a view towards expediting general co-ordination and approvals for offshore wind and solar projects. Pursuant to the creation of such a single administrative authority, potential project developers will benefit from streamlined guidance in relation to the permitting and licensing processes necessary for constructing and operating the proposed offshore projects. This set-up intends to balance private investment incentives with the country’s clean energy ambitions, and will potentially aid foreign investors in navigating the regulatory process with greater efficiency and transparency.

Renewable Energy Generation

The electricity production and generation market for renewable energy in Malta primarily involves domestic and small-scale PV systems. Land-based renewable resources beyond solar are limited due to Malta’s geographic, spatial and environmental constraints, which restricts large-scale deployment. Malta’s renewable energy mix is therefore primarily composed of solar power, which accounts for almost all renewable energy produced domestically, making up approximately 97% of Malta’s renewable capacity.

Biogas from organic waste also contributes to the overall RES electricity generation portfolio, though to a much smaller extent, with limited electricity generation through anaerobic digestion of organic waste materials. Meanwhile, wind energy offers an attractive alternative to solar; however, spatial limitations on land, and environmental and technical difficulties with deployment offshore, have inhibited large-scale project deployment to date. Following recent advancements in technology, offshore wind development is expected to become the main contributor towards increased levels of RES in the overall energy mix.

Regulation and Key Parties

The key regulatory authorities involved in Malta’s renewable energy sector include the Energy Ministry, REWS and the PA (as further set out in 2.2 Regulating Authorities). Together, such authorities establish energy policy and design and implement Malta’s energy strategies. REWS is the main authority responsible for regulatory compliance, ensuring that all RES installations meet national standards, whether domestic systems or larger-scale solar or wind farms. The regulatory framework includes subsidies and feed-in tariffs for PV installations, providing incentives both for residential and for small to medium-scale commercial installations. For larger projects, REWS requires special authorisation for grid connection, ensuring that new generation projects do not compromise grid stability or efficiency. Additionally, the NPOR supports potential future projects in floating offshore wind and solar, as these emerging technologies become increasingly viable for Malta’s conditions.

Key market players include the following.

Electrogas Malta Limited

This is a Maltese company made up of a consortium of private shareholders – namely Siemens, Socar and a syndicate of Maltese investors. The consortium owns and operates a 205 MW Siemens combined-cycle gas turbine power plant and the floating liquefied natural gas (LNG) storage vessel berthed adjacent to the power station, with the re-gasification plant being located on the same power station site.

D3 Power Generation Limited

This is an energy company incorporated as a joint venture between a subsidiary of Shanghai Electric Group (as majority shareholder) and Enemalta. The company owns and operates a 144 MW dual-fuel power plant operating on a combination of gas and diesel.

Enemalta

This is a Maltese majority State-owned energy company with minority shareholding by a subsidiary of Shanghai Electric Group. Enemalta is sole distribution system operator (DSO) and sole supplier of electricity in Malta, as well as the operator of the electricity interconnector with Sicily. In recent months, Enemalta also leased and operates a temporary diesel-fuelled 60 MW power plant to ensure uninterrupted supply in the event of a failure in one of the main power generation sources.

Waste-to-energy plants in Malta are regulated under a combination of national laws and EU regulations that govern waste management, environmental protection and energy production. With oversight from authorities such as the ERA and REWS, Malta has developed biogas production primarily from organic waste, especially through anaerobic digestion processes. The main biogas plant operator is Wasteserv Malta Ltd, which processes organic waste to produce biogas for electricity generation at the Sant’ Antnin Waste Treatment Plant. Biogas is largely derived from food waste, agricultural residues and green waste, and plays a role in reducing landfill methane emissions.

Recent figures illustrating the total electricity generated from waste-to-energy plants in Malta are not readily available; however, as of 2021 waste treatments plants contributed about 2.58 GWh of electricity. This biogas is processed and used for combined heat and power (CHP) production, with excess electricity being fed into the national grid.

The government has implemented incentives and regulatory support for gas projects; however, the production and use of biogas is still limited when compared to solar power.

The potential for geothermal energy development in Malta is minimal, unless new technologies emerge that could make low-temperature geothermal resources viable on a larger scale. The country’s geological structure is composed mostly of limestone with relatively shallow bedrock, and does not offer the high-temperature geothermal resources typically found in volcanic or tectonically active regions. Geothermal energy usually relies on hot rocks located at accessible depths to generate significant amounts of energy, and Malta lacks these conditions.

There has been some exploration of low-temperature geothermal energy options, such as ground-source heat pumps, which can use the relatively stable underground temperatures to provide heating and cooling. However, these systems are typically more feasible for small-scale applications in buildings and are not utilised for large-scale power generation. Owing to these limitations, Malta’s renewable energy strategy has focused on solar and wind energy, which are more conducive to the country’s climate and natural resources.

Malta has no dedicated hydrogen infrastructure or extensive legislation specifically for hydrogen production or use. However, the Maltese government views hydrogen as a potential option for long-term energy decarbonisation (particularly for the transport industry), with such views reflecting the EU’s broader hydrogen strategy.

In terms of biofuels, existing EU obligations have led to a more actively regulated market. Regulation is primarily geared towards distribution and usage, ensuring compliance with sustainability, performance and environmental standards. In terms of production, Malta relies on imports to meet its targets. The potential for biofuel production in Malta is limited due to several geographic, economic and logistical constraints – ie, associated with the country being one of the most densely populated countries in the world and having limited agricultural land available for growing biofuel feedstocks. This notwithstanding, biofuels will likely receive more policy attention as Malta moves towards meeting its 2030 and 2050 emissions targets.

In addition to the foregoing, the idea of a hydrogen-ready gas pipeline project with Italy has been under consideration as part of Malta’s long-term energy strategy to diversify and secure its energy supply. Such project would provide Malta with a stable natural gas supply, thereby reducing dependence on imported LNG and increasing security of supply by integrating Malta with the European gas network. This connection would:

• support Malta’s goals for energy security;
• reduce carbon emissions;
• enhance the flexibility of Malta’s energy supply; and
• potentially tap future opportunities, such as the potential supply of biogas blended with natural gas and hydrogen.

Small-scale generation of renewable energy for own or domestic use is primarily regulated by the Electricity Regulations (SL 545.34 of the Laws of Malta) and the Energy and Water Services Act (Chapter 423 of the Laws of Malta).

Such regulations provide guidance on the individuals and entities that are allowed to connect their RES generation systems to the grid, subject to certain conditions. Pursuant to the regulations, small-scale producers are able to produce energy for self-consumption or feed surplus electricity into the grid under specific schemes. In addition to the foregoing, said regulations provide an overarching framework for the registration, certification and monitoring of small-scale renewable energy installations, such as domestic rooftop solar PV systems.

In terms of incentives, the Feed-In Tariffs Scheme (Electricity Generated from Solar Photovoltaic Installations) Regulations (SL 545.27 of the Laws of Malta) regulate feed-in tariffs (FiTs) for small-scale renewable energy producers, allowing households and businesses to sell excess electricity generated by their PV systems back to the grid at a fixed rate. The FiT scheme is periodically reviewed by REWS and varies based on system capacity, funding availability and the applicability of concurrent grants.

Electricity Market

Malta’s electricity market is structured as a single-buyer market, with Enemalta, a State-owned entity, acting as the DSO of the electricity grid (owing to the limited size of the market, there is no transmission system or transmission system operator). This structure centralises control of the grid, which may facilitate the integration of RES by minimising complexities in grid management.

Furthermore, in view of the derogations from the application of the Electricity Market Directive (EU) 2019/944, namely in relation to Articles 4 (free choice of supplier) and Article 6 (third-party access), the licence for the supply of electricity shall be issued only to Enemalta. Thus, in the case of a contract for difference (CfD), Enemalta will act as the exclusive off-taker for wholesale electricity until such time as the electricity supply market remains closed for competition – whereas in the case of a power purchase agreement (PPA), Enemalta will act as the off-taker at the agreed price (as per the PPA) for the whole duration of the contract.

Being Malta’s designated sole energy supplier and DSO, Enemalta is the entity that assesses the technical impact of each renewable energy development project on the national grid. Where necessary, the DSO shall evaluate how, where and at what voltage level grid connection for RES projects can be made. The connection and operation will have to follow Malta’s Network Code (NC), which also regulates how and when situations of curtailment may arise. Furthermore, electricity dispatch and balancing obligations will be in line with the Electricity Regulations (SL 545.34 of the Laws of Malta).

Battery Storage

As RES penetration increases, storage solutions (particularly battery storage) will play an increasingly relevant role in Malta’s energy system. While there is no specific legislation for battery storage, grid-connected storage systems must comply with general safety, environmental and technical standards as overseen by REWS and the DSO.

Although Malta’s adoption of battery storage is still limited, the government is exploring incentives for storage systems at residential and commercial levels. This would enable distributed storage, stabilise the grid, support renewable integration and improve energy self-sufficiency. Additionally, Malta is evaluating the potential for emerging storage solutions (such as pumped hydro or hydrogen storage) as part of its future energy transition strategy.

Large-scale battery systems have been proposed as part of Malta’s NECP, as a means of mitigating issues of intermittency in renewable generation by storing excess energy generated during peak generation hours and discharging it when demand is high or supply is low. As part of such evaluation process, REWS commissioned the Institute for Sustainable Energy at the University of Malta to carry out a high-level assessment of battery storage solutions based on prevalent technologies, financial considerations and potential business models. The conclusions of this assessment are being reviewed and analysed within the context of potential EU funding opportunities.

Grid Congestion Management and Curtailment

To manage grid congestion during periods of higher-level RES generation, the DSO can implement curtailment measures. While grid connection from RES is generally provided on a priority and guaranteed access basis, there may be instances of forced curtailment in cases where the grid must reduce RES input to avoid overloading. In such instances the DSO is permitted to disconnect or scale down RES generation systems during peak production if demand is low. This approach is viewed as a last resort, and, given Malta’s limited renewable energy production and general peak energy demands tallying with periods of peak production, such curtailment scenarios are irregular.

The DSO uses demand forecasting and advanced monitoring systems to predict potential congestion and curtailment needs. Real-time adjustments help balance supply and demand, while the electricity interconnector with Sicily provides additional balancing support, allowing Malta to import or export electricity as needed. Instances of curtailment may increase once anticipated offshore RES projects become operational; however, the existing and planned interconnectors with Sicily will minimise the need for curtailment of RES generation by reducing the instances of grid overload.

Arrangements for Flexibility

Currently, Malta does not have a fully developed market for demand-side flexibility or specific financial incentives for demand-side response in the residential sector, such as those seen in larger markets. However, through REWS and the energy policies outlined in the NECP, Malta is exploring ways to encourage demand-side flexibility, including by incentivising businesses to adjust consumption patterns to support grid stability.

Small-scale RES producers – primarily solar PV owners – typically have FiT contracts allowing them to sell excess energy to the grid. These contracts include terms that specify potential curtailment during grid congestion events. For larger-scale renewable projects, contracts may also include conditions for flexible operation to accommodate grid needs.

To date, the intermittent nature of RES has been mitigated by relying on the electricity interconnector with Sicily to provide balancing services and, to a lesser extent, on local conventional power generation facilities. Although the government is constructing a second electricity interconnector, increased flexibility of the electricity sector will also be tackled through multiple actions, including with the deployment of energy storage systems and assessing the potential and applicability of demand-response solutions in a local context.

In addition, in July 2024 a memorandum of understanding (MOU) was signed between Malta and Libya, focusing on collaboration for renewable energy projects (primarily solar energy) and the establishment of an energy interconnector between the two countries. The MOU highlights a commitment to leveraging Libya’s abundant solar energy resources to meet Malta’s and Europe’s needs, while also supporting Libya’s development and its role as a regional energy partner. Potential projects would involve linking the electricity grids of Malta and Libya via an undersea cable to enable Malta to import renewable energy generated in Libya and export surplus energy to Europe, with Malta acting as a bridge between Africa and Europe.

Distribution system secondary-node reinforcements are also being implemented to address issues related to system-current carrying capacity and voltage regulators. However, further installation of renewable energy capacity (particularly large-scale installations such as offshore wind and solar technology) will necessitate the implementation of different mitigating strategies – namely, utility scale storage, dispatching and major grid upgrades to minimise curtailment.

Market Structure

Malta has minimal infrastructure dedicated to biogas or green gas production. Currently, biogas in Malta is mainly generated from organic waste through anaerobic digestion. However, production levels are low, and most of the biogas generated is used onsite (primarily in waste treatment facilities) rather than injected into a gas grid or widely distributed. Malta does not currently have a gas grid and therefore cannot accommodate large-scale biogas or green gas distribution.

Malta’s primary renewable gas production efforts are focused on waste-to-energy projects, where biogas is generated from organic waste at facilities such as the Sant’ Antnin Waste Treatment Plant. Although Malta does not currently have the infrastructure for large-scale transportation or storage of green gas, renewable gases are being considered under the NECP as part of the long-term solutions for Malta’s energy mix.

Challenges and Limitations

The development of renewable gas infrastructure in Malta faces the following challenges:

• lack of gas grid – Malta does not have a dedicated natural gas pipeline network, which limits the potential for renewable gas distribution;
• small market size – given Malta’s small population and limited land, expanding biogas production and storage may face economic and logistical limitations; and
• high initial investment – developing renewable gas infrastructure requires significant investment, which may be challenging given Malta’s scale and reliance on imported energy.

The sector for the transportation and storage of heat from renewable sources in Malta is underdeveloped, and there are currently no dedicated heat grids or infrastructure for distributing renewable heat. Malta’s small geographical size, mild Mediterranean climate and relatively low heating demand significantly reduce the economic feasibility of establishing large-scale centralised or district heating systems that transport and distribute heat.

Limited localised heat production for consumption is found in the form of solar water heaters, heat pumps and biomass boilers used for domestic or commercial purposes. The limited actors in the renewable heat sector are therefore residential users and small businesses installing and operating decentralised renewable heat systems.

Malta’s sector for the transportation and storage of hydrogen, biofuels and other types of renewable energy is still in its early stages of development. The country does not currently have hydrogen grids or infrastructure for transporting renewable gases or biofuels. While the idea of a gas pipeline project with Italy has been under consideration as part of Malta’s long-term energy strategy to diversify and secure its energy supply, the project benefits and economic considerations are still being evaluated. This connection would potentially enable the supply of biogas blended with natural gas (and possibly also hydrogen).

Presently, Malta’s biofuel policies and regulations align with the EU’s Renewable Energy Directive (RED II), which sets targets for incorporating renewable energy into transportation. Under EU requirements, Malta’s targets for 2030 are a 14% renewable energy share in transport. This includes contributions from biofuels and renewable electricity, although due to limited mass electrification potential the main contributions are expected to come from increased biofuels in transport.

Biofuels and bioliquids operations and sustainability criteria are primarily regulated by:

• the Petroleum for the Biofuels and Bioliquids Market Regulations (SL 545.15 of the Laws of Malta); and
• the Biofuels, Bioliquids and Biomass Fuels (Sustainability Criteria) Regulations (SL 545.37 of the Laws of Malta).

The market for the trade and supply of renewable electricity to end users in Malta is primarily influenced by the country’s small size, energy import dependency and centralised energy systems. Traditionally, Malta’s electricity market was limited to a monopoly held by Enemalta. Liberalisation of the power generation market in 2004 brought about limited competition in the form of minor solar PV uptake, although Enemalta continued to act as the sole major power producer, supplier and DSO.

Pursuant to Article 66 of the EU’s Electricity Market Directive 2019/944, Malta was granted a derogation relating to the liberalisation of the electricity supply market. Such derogation was granted for a definite period, and is applicable until 5 July 2027, unless otherwise extended. As a result, Enemalta has been retained as the sole electricity supplier, and effectively enjoys a legal monopoly in terms of electricity sale and supply to end consumers. Enemalta also acts as the sole DSO, while, due to market size, there is no transmission system or transmission system operator.

Enemalta is legally designated as Malta’s sole DSO and thus acts as both supplier and network operator. This is permitted by virtue of a derogation from the unbundling requirements set out in Articles 35 and 43 of the aforementioned Directive prohibiting a network operator (transmission system operator (TSO) or DSO) from carrying out activities relating to supply and generation. In Malta’s case, Enemalta is legally permitted to act as both supplier and DSO. In addition, pursuant to a derogation from Article 6 of the Directive, Malta has no obligation to provide third-party access to its network. Accordingly, save for electricity generation, there is limited open competition along the energy chain.

Malta does not have a market for the trade and supply of heat from renewable sources, such as biofuels. Heating needs in Malta are minimal due to the country’s Mediterranean climate, which reduces demand for centralised or large-scale heating systems. As such, renewable heat sources such as biofuels or district heating systems are not established, with a negligible market or infrastructure for biofuel-based heating systems.

Biofuels are primarily imported and used in transport rather than for heating applications. Malta has minimal infrastructure dedicated to biogas production, with biogas mainly being generated from organic waste through anaerobic digestion. Production levels are currently low, and most of the biogas generated is used onsite (primarily in waste treatment facilities).

The regulatory framework governing the trade and supply of heat from RES has not yet been developed in Malta.

A framework governing the market for trade and supply of hydrogen has not yet been introduced.

Regarding the trade and supply of biofuels, the requirements for the issuance of an authorisation from REWS are primarily regulated in terms of the Biofuels and Bioliquids Market Regulations (SL 545.15 of the Laws of Malta).

Guarantees of Origin

The issuance, transfer and cancellation of guarantees of origin (GOs) in Malta are regulated by the Guarantees of Origin of Electricity from High-Efficiency Cogeneration and of Energy from Renewable Energy Sources Regulations (SL 545.36 of the Laws of Malta). The system is still in development given Malta’s small energy market and centralised electricity system; however, pursuant to said Regulations, a regulatory framework has been created for issuing GOs for electricity generated through high-efficiency cogeneration or from RES. The structure of the GO market is modelled on the EU’s Renewable Energy Directive (RED II) and mandates mechanisms to certify RES origin in accordance with objective, transparent and non-discriminatory criteria.

PPAs

Long-term PPAs have been applied in the energy sector for conventional power purchases, but are not yet common practice for RES, due to the centralised nature of the electricity market and the current absence of large-scale renewable energy projects. Rather, most renewable energy transactions to date have been handled through FiTs or net metering systems for small-scale producers.

One anticipated barrier to implementing PPAs for large-scale RES deployment is the dominance of Enemalta as the sole buyer, supplier and distributor of electricity; however, the future development of offshore wind and solar farms will need to consider long-term power purchase commitments if it is to attract private-sector interest. The durations and types of PPAs will need to be established by agreement with Enemalta, and such PPAs will need to consider the existing PPA obligations with conventional gas-fired power plant operators, as well as grid connection and electricity dispatch rules in adherence with REWS regulations.

The country’s geography, limited land availability and dense urbanisation restrict large-scale onshore RES projects. Environmental and social considerations are also key considerations rendering large-sale projects non-viable for land-based deployment. Malta’s onshore renewable energy market is therefore focused on small to medium-scale solar PV projects, deemed to be the least invasive technology (eg, domestic and small-scale rooftop solar PV installations). There are also a few brownfield sites (such as disused quarries) that have been repurposed as medium-scale solar farms.

While less impactful than wind farms, PV technology is still land-intensive and land availability is scarce (Malta’s developed land coverage is among the highest in Europe, at approximately 33%). In view of these spatial limitations and land-use conflicts, the PA launched a Solar Farm Policy in 2021 with the aim of setting out the fundamental criteria for guiding the planning, permitting and designing of solar farm development. This policy encourages solar farm development to exploit land in a more efficient manner, with priority given to large-scale rooftops, car parks, industrial areas, decommissioned quarries and landfills.

Nonetheless, Malta’s energy strategy is evolving, and recent years have seen a stronger focus on offshore solar and wind systems. This shift reflects Malta’s adaptation to limited land resources while pursuing ambitious renewable energy targets.

Malta’s offshore renewable energy market is still in its infancy; however, recent advancements in offshore floating technology have led to a shift away from land-based projects and to a renewed focus on offshore RES potential.

In this nascent stage, the significant focus is on research, planning and feasibility studies. Based on such studies, the government published the NPOR in 2023 and issued market consultations in 2024 seeking proposals for offshore solar farms. Future RES development increasingly appears to be tied to offshore development, and an expression of interest is now expected in the coming months with a view towards developing the first offshore wind farms by 2030 (having an expected generation capacity of 300 MW). Furthermore, offshore wind farm projects are expected to be complemented by offshore solar farm projects, in order to limit intermittent energy risks and diversify electricity supply.

Potential Locations

In October 2024, the Energy Ministry identified two potential areas (from the six areas originally identified) as most feasible for the possible deployment of floating offshore renewables. While the precise location of the shortlisted sites has not been publicly disclosed, the combined area is estimated at approximately 330 square kilometres, which is effectively a large enough area to meet Malta’s 2030 RES generation targets.

Data collection is being conducted to enable potentially interested parties to present detailed and realistic proposals from a technical and financial point of view. An expression of interest is expected to be launched in the coming months, with a view towards developing the first offshore wind farms by 2030.

Development Considerations

The following considerations should be noted:

• permits and approvals – offshore projects require EIAs and planning and permitting approvals, as mandated by the ERA and the PA;
• marine spatial planning – ensures that offshore developments align with ecological and navigational priorities;
• utilities – grid connection, supply and distribution to be discussed with Enemalta; and
• designated EEZ areas – the extent of the EEZ areas to be designated by Malta is under discussion in parliament, and the scale and potential of RES development outside Malta’s territorial waters is dependent on the passing of the draft bill.

No specific rules or regulations apply to project financing of RES projects in Malta, although project financing typically follows structures used similarly for other asset types. The project company (usually a special purpose vehicle) will need to have the appropriate qualifications and experience, and the project finance structure will generally be without recourse or with limited recourse.

Potential risks that apply to renewable energy projects include:

• permitting risks – delays or denials in obtaining development permits or environmental clearances from the PA or the ERA, which may have an impact on project timelines;
• grid constraints – potential issues with grid congestion and curtailment, or delays in securing grid connection agreements from Enemalta;
• EEZ areas – third-country contestation of designated EEZ areas; and
• interface risks – instances where multiple construction and supply contracts are involved could lead to delays in project timelines.

Financiers will typically require asset security from the project’s obligors, including energy contacts (eg, PPAs, FiTs and offtake agreements).

Support for solar PV is primarily regulated by:

• the Feed-in Tariffs Scheme (Electricity Generated from Solar Photovoltaic Installations) (SL 545.27 of the Laws of Malta);
• the Competitive Bidding Rules for Renewable Sources of Energy Installations (Capacity from 40 kW up to less than 1,000 kW) Regulations (SL 545.32 of the Laws of Malta); and
• the Competitive Bidding Rules for Installations Producing Renewable Electricity from Renewable Energy Sources Regulations (SL 545.39 of the Laws of Malta).

The available incentives are largely in the form of operating aid and grants on capital investment.

The current Scheme was adopted in 2013 and was most recently extended for the period 2024–2025. Under the FiT initiative, both households and businesses may benefit from a fixed rate of 15c/kWh for electricity generated from grid-connected renewable sources for a period of 20 years. In addition, the government has also allocated funds for upfront capital investments for PV installations and battery storage systems, with a range of refund options that vary according to the hybrid/battery inverter systems opted for. For beneficiaries of a PV system grant, a reduced FiT rate of 10c/kWh will apply for 20 years.

Malta’s FiT and grant schemes are generally designed to support smaller-scale and residential projects, while larger installations are promoted through competitive tenders managed by the Energy Ministry. The Feed-in Tariffs Scheme (SL 545.27) applies to systems with solar PV capacities of less than 40 kWp; accordingly, renewable energy projects with capacities above 40 kWp fall outside the scope of the current FiT incentive scheme. However, larger-scale projects may still benefit from specific government initiatives, support mechanisms and regulatory frameworks aimed at facilitating their development. These include PPAs and potential EU funding that may occasionally be made available for innovative or significant renewable projects which contribute to Malta’s renewable energy and climate objectives.

Generally, the cessation of activities, decommissioning and disposal of renewable energy installations are governed by environmental regulations and specific project permits issued during the development phase, in line with sustainability, recycling and ecological restoration standards.

EIAs will be required for large-scale RES projects at the approval stage, and such assessments will be required to outline decommissioning responsibilities, including restoration of sites to their original condition. The decommissioning phase is addressed under the conditions of the environmental and planning permits. RES developers will be required to submit a site restoration plan for the end of life of the project, as mandated by planning authorities; while such requirements have not yet been tested in practice, specific guidelines under Malta’s NPOR address the management of offshore installations, so as to ensure minimal impact on marine ecosystems during decommissioning. Large-scale RES projects will therefore include clauses in their contracts for decommissioning and site remediation, reflective of EU best practices.

Malta’s renewable energy policy is expected to undergo significant developments in the coming years (especially in the area of offshore renewable energy development), with advancements in policy frameworks to support offshore renewable energy projects (in particular, floating offshore wind and solar within the EEZ and EEZ areas). The official declaration of an EEZ and/or EEZ area outside territorial waters is expected to be finalised in parliament; the government is also concurrently conducting strategic environmental assessments to identify potential zones for RES installations, and is considering measures to streamline the regulatory process for project development. The government is also expected to issue international expressions of interest for these projects, emphasising clean energy and sustainable economic growth through the blue and green economies.

Malta aims to achieve a 25% renewable energy share in its energy mix by 2030 as part of its national goals, while aligning with the EU’s broader climate neutrality goals by 2050. To meet these objectives, Malta is expected to continue its investments in renewable energy infrastructure and policy reforms, with a particular focus on offshore development, energy storage solutions, demand-side management and grid flexibility. All these elements will require significant investment and regulatory support to accommodate the intermittent nature of significant RES development in the run up to 2030. Malta will also continue aligning its policies with EU Directives and other climate-related frameworks, to ensure compliance and access to EU funding for renewable energy initiatives.