Malta's Smart Grid Solution: The world's first multiutility grid should save water and money

Here in this tiny nation of 400 000, a seven-island archipelago strung between Italy and Tunisia, IBM is building the world’s first smart grid that will govern both electricity and water. For the electricity utility, Enemalta Corp., in Marsa, the €70 million (about US $88 million) grid will make detecting theft easy, distribution fair, and administration efficient. It will also make environmental measures easier to promote, through pricing options that reward conservation and solar energy; solar panels are a viable alternative on these sunstruck islands. Water Services Corp., in Luqa, will use the smart grid to shave kilowatt-hours off its energy bill by optimizing its control systems. And both the electric and water utilities will monitor every watt and liter flowing onto their respective grids and compare those measurements to the readouts of every meter in the system. That way, losses through theft, leakage, and defective meters can be pinpointed quickly.

But while the grid will help both utilities keep a lid on costs, energy and water prices are ultimately tied to Malta’s total dependence on oil, its shortage of freshwater, and the fact that as a member of the European Union, it must implement a sustainable water policy this year. Part of that policy is to force water conservation on consumers through price increases. So the government is setting the price of electricity. That in turn determines the price of water, because Water Services uses electricity to extract groundwater and to desalinate seawater, the parched islands’ two main sources.

When utility rates rise, of course, everybody blames the government. The inevitable pointing fingers curled into raised fists at the end of February as thousands of trade unionists and ordinary Maltese jammed the streets of the capital, Valletta, to protest hikes in their utility bills. On 1 March, a motion in the Maltese House of Representatives to repeal the new tariffs went down to defeat by a single vote.

Malta’s political and geographical circumstances make it a uniquely challenging place to institute new water and energy policies. Unlike Singapore or China, where word from the top decides all matters, the Maltese have a vibrant democracy, one where issues are debated in public and decided on election day, often by razor-thin margins. Unlike the United States or Australia, every decision taken by the national government is local. Each citizen bears the consequences not just of some faceless bureaucrat’s whims but also the actions of his or her neighbors. With the country’s energy supply at the mercy of world oil markets and its groundwater running out, Malta is approaching the point where the people must choose between conserving water and electricity or paying ever higher prices to desalinate their water and power their homes.

That’s where the smart grid will help. With the vast amounts of data it generates, government officials, the utilities, and citizens will be able to make more informed decisions. "You will have thousands of times more information than you have now," says Paul Micallef, who oversees the introduction of the meter management system for IBM Global Services. "Unless you’re in the position of the utilities, you can’t even fathom the change that’s going to happen."