76 tal-2017

L.N. 76 of 2017

FINANCIAL ADMINISTRATION AND AUDIT ACT

(CAP. 174)

REGULATOR FOR ENERGY AND WATER SERVICES ACT

(CAP. 545)

Competitive Bidding Rules for Renewable Sources

of Energy Installations Regulations, 2017

BY VIRTUE of the powers conferred by article 4 of the

Financial Administration and Audit Act, and in exercise of the

powers conferred by article 37(1) of the Regulator for Energy and

Water Services Act, the Minister of Finance and the Prime Minister,

after consultation with the Regulator for Energy and Water Services,

have made the following regulations:-

The title of these regulations is the Competitive Bidding Citation.

Rules for Renewable Sources of Energy Installations Regulations,

2017.

(1) Unless otherwise stated in these regulations, the Interpretation.

definitions in the Financial Administration and Audit Act shall apply. Cap. 174.

(2) In these regulations, unless the context otherwise requires

"annual threshold" means the cap in kWh for the payment of the

awarded bid price per kWh for the period of time commencing on the

1st January and ending on the 31st December of each year;

"approved renewable energy installation" means a new solar

photovoltaic installation or new wind energy installation with a

capacity of 1000kWp or more and granted financial support for the

first time pursuant to a competitive bidding process, and excludes

solar photovoltaic installations and new wind energy installations that

benefit or have benefited from any other support including support on

the initial capital investment;

"awarded bid price per kWh" means the bid price per kWh

offered by a successful bidder whose offer is selected pursuant to a

competitive bidding process;

"bid price per kWh" means price per kWh offered by a bidder in

a competitive bidding process;

"common point of connection to the grid" means the point on

the electricity distribution network where the Distribution System

Operator and customer/generator assets are connected and coincides

with the location of the meter;

"commissioned" means the first time a renewable energy

installation is put into operation, following the establishment of

operational readiness by the warranted electrical engineer certifying

the installation;

"competitive bidding process" means a non-discriminatory

bidding process that provides for the participation of a sufficient

number of undertakings and where the aid is granted on the basis of

the initial bid submitted by the bidder. In addition, the volume related

to the bidding process is a binding constraint leading to a situation

where not all bidders can receive aid;

"Contracting Authority" means the entity

issuing

and

administering the competitive bidding process;

"DC" means direct current;

"distribution" means the transport of electricity on high voltage,

medium voltage and low voltage distribution systems with a view to

its delivery to consumers, but not including supply;

"distribution system" means all the interconnected technical

facilities used for conveying electricity to final customers;

"distribution system operator" shall have the same meaning as

under the Electricity Market Regulations;

"eligible renewable energy installation" means a new solar

photovoltaic installation or new wind energy installation with a

capacity of 1000kWp or more applying to be granted financial

support for the first time pursuant to a competitive bidding process,

and excludes solar photovoltaic installations and new wind energy

installations that benefit or have benefited from any other support

including support on the initial capital investment;

"full load hours" means the equivalent number of hours in a year

during which the renewable energy installation produce at its full

nominal or kWp capacity;

"generation" means the production of electricity;

"guaranteed period" means the period of time indicated in the

relevant competitive bidding process during which the awarded bid

system operator from a qualifying renewable energy installation is

guaranteed;

"kW" means kilo Watt;

"kWh" means kilo Watt hour(s);

"kWp" means the nominal capacity of the renewable energy

installation, which in the case of a solar photovoltaic installation is

equal to the total DC peak power of a solar photovoltaic installation;

"metering equipment" means the electricity meters provided by

the distribution system operator including smart meters, any voltage

and current transformers and any other associated equipment and

wiring required to measure the quantity of electricity supplied or

exported;

"Minister" means the Minister responsible for Energy;

"new solar photovoltaic installation" means a solar photovoltaic

installation which has never been used for the generation of

electricity in whole or in part and which is installed by a successful

bidder after the conclusion of a competitive bidding process;

"new wind energy installation" means a wind energy installation

which has never been used for the generation of electricity in whole

or in part and which is installed by a successful bidder after the

conclusion of a competitive bidding process;

"performance bond" means the performance bond to be

provided by a successful bidder to the Contracting Authority pursuant

to regulation 10;

"premium" means the difference between the awarded bid price

per kWh and the proxy for the market price per kWh and is payable

only when the awarded bid price per kWh is higher than the proxy for

the market price per kWh and the proxy for the market price per kWh

is not negative;

"proxy for the market price" means the average of the estimated

variable cost of meeting the demand forecast for a given year from

locally generated conventional and imported electricity, with the

demand assumption excluding that portion of the forecast demand

which is not expected to be met by conventional and imported

electricity;

"renewable energy sources" means renewable non-fossil energy

sources, that is, wind, solar, geothermal, wave, tidal, hydropower,

biomass, landfill gas, sewage treatment plant gas and biogases;

"smart meters" shall have the same meaning as in the Electricity

Supply Regulations;

"solar photovoltaic installation" means a solar photovoltaic

system that generates electricity exclusively from solar radiation and

consisting of all accessories including

(a)

an array or arrays of photovoltaic modules that

collect and absorb sunlight for conversion into electricity;

(b)

an inverter or inverters;

(c)

associated balance of system components, including

wiring, conduits, switchgear, protection equipment, ancillary

equipment and any other part of the installation necessary for

the production and conveyance of electricity up to the metering

equipment supplied by the distribution system operator;

"successful bidder" means a bidder whose offer is selected

pursuant to a competitive bidding process;

"supply" means the sale or retail, including resale, of electricity

to customers;

"wind energy installation" means an installation that converts

wind energy into electricity and shall include the tower on which the

wind turbine is mounted, a rotor and the nacelle which houses the

equipment, including the generator, that converts the mechanical

energy in the spinning rotor into electricity and any other ancillary

equipment necessary to connect to the grid.

(1) The purpose of these regulations is to introduce the

competitive bidding process as the method to determine the fixed

distribution system operator from approved renewable energy

installations and hence to promote and support the generation of

electricity from renewable energy sources. The method and amount of

support for solar photovoltaic installations with a kWp capacity lower

than 1000kWp shall continue to be determined administratively. For

the purpose of calculating the 1000kWp threshold, renewable energy

installations with a common point of connection to the electricity grid

shall be considered as one installation.

(2) These regulations shall apply only to renewable energy

produced from renewable energy installations installed in Malta,

Gozo and other islands of the Maltese Archipelago, including the

territorial waters thereof.

(3) These regulations shall not apply to firms in difficulty as

defined by the Guidelines on State aid for Rescuing and Restructuring

non-financial Undertakings in difficulty (2014/C 249/01).

The price per kWh to be paid for electricity generated and Competitive

sold to the distribution system operator from eligible renewable bidding process.

energy installations shall be determined through a competitive

bidding process

Provided that any award and, or payment of any amounts

to an undertaking that has benefited from earlier unlawful aid

declared incompatible by a Decision of the European Commission

shall be suspended until such time as that undertaking has reimbursed

the total amount of unlawful and incompatible aid and the

corresponding recovery interest.

(1) The awarded bid price per kWh resulting pursuant to Determination

a competitive bidding process shall be paid in each calendar year up of

kWh.

to a capped amount of units of electricity generated and sold to the

distribution system operator and payable for the guaranteed period.

(2) The awarded bid price per kWh shall be determined by

"pay-as-bid" such that the successful bidders shall be paid, for the

electricity generated and sold to the distribution system operator from

an approved renewable energy installation, the awarded bid price per

kWh based on their actual bid.

(3) The bidder shall submit the bid price per kWh for each

eligible renewable energy installation as required in the competitive

bidding process.

(4) The awarded bid price per kWh shall only be applicable to

a successful bidder and only in respect of the renewable energy

installation as described in the bid including the capacity offered in

the bid (in kWp), as part of the competitive bidding process. The

capacity associated with the bid price shall be deemed to be equal to

Offered kWp x Full Load Hours

(5) Without prejudice to sub-regulation (4), the ownership of

an approved renewable energy installation selected pursuant to a

competitive bidding process may be transferred to a third party and

subject to the third party obtaining the necessary permits,

authorisation and licences, as may be applicable.

(6) The awarded bid price per kWh with respect to an

approved renewable energy installation shall be payable for the actual

number of units of electricity generated by such installation and sold

to the distribution system operator, up to the annual threshold

calculated as offered kWp x Full Load Hours

Provided that the number of assumed full load hours in the

case of a solar photovoltaic installation shall be equal to 1600 hours

Provided further that in the case of other types of

renewable energy installations, such as wind energy, the number of

full load hours which shall determine the annual threshold for the

payment of the awarded price per kWh, shall be specified in the terms

and conditions applicable in the relevant competitive bidding process.

(7) Any units generated above the amount calculated in sub-

regulation (6) of this regulation in any calendar year shall be

purchased by the distribution system operator and paid at the proxy

for the market price per kWh only, without the payment of the

premium.

(8) The successful bidders shall not be entitled to tradeable

guarantees of origin or other tradeable certificates for the electricity

sold to the distribution system operator.

(9) Without prejudice to sub-regulations (4) and (5), an

approved renewable energy installation may be relocated to an

alternative site subject to obtaining the necessary permits,

authorisations and licenses as may be applicable, and subject to the

conditions laid down in the competitive bidding procedure

(1) The competitive bidding process shall include an

administratively established cap on the maximum bid price per kWh

that bidders may offer. The cap may consist of one maximum bid

categories.

(2) The bid prices per kWh shall be submitted in steps of

€0.005/kWh and shall not exceed the cap referred to in sub-regulation

(1).

(1) An approved renewable energy installation shall be

commissioned and an application to connect the installation to the

distribution system has been submitted to the distribution system

operator within eighteen (18) months to be reckoned as from the date

of the letter of award issued by the Contracting Authority to the

successful bidder to secure the eligibility of the awarded bid price per

kWh.

(2) If the successful bidder fails to comply with sub-regulation

(1), the time to commission and apply to connect the approved

renewable energy installation to the distribution system as indicated

in sub-regulation (1) may be extended once only by six months by

means of a request in writing to the Contracting Authority and made

in the format required by the Contracting Authority

Provided that the price payable to the successful bidder for

electricity generated and sold to the distribution system operator for

the particular approved renewable energy installation shall be

equivalent to the awarded bid price per kWh, less €0.005/kWh for all

electricity generated and sold to the distribution system operator up to

the amount indicated in regulation 5(6), for the guaranteed period.

(3) The time necessary for the successful bidders to obtain the

necessary authorisations, licences and permits as applicable, shall not

suspend the running of the time periods indicated in sub-regulations

(1) and (2), being the maximum time within which an approved

renewable energy installation must be commissioned and an

application to connect the installation to the distribution system has

been submitted to the distribution system operator, for the award

pursuant to the competitive bidding process to remain valid. Failure

to comply with sub-regulation (1) and sub-regulation (2) (when an

application for an extensions has been made), shall lead to the

automatic withdrawal of the award and the forfeiture of the

performance bond.

The launch of each competitive bidding process, as well as Publication of

the maximum capacity in kWp as determined by the Minister for each launch

bidding process

competitive bidding process, shall be made public by means of a and

kWp capacity.

Government Notice published in the Gazette.

(1) The process shall be carried out through a Process.

competitive bidding process

Provided that the competitive bidding process shall be

compliant with the fundamental rules and principles of the Treaty on

the Functioning of the European Union regarding equality,

transparency, proportionality and prohibiting discrimination on

grounds of nationality and the European Commission’s Guidelines on

State Aid for environmental protection and energy 2014-2020.

(2) The invitation for bids shall also include terms and

conditions which shall constitute an integral part of the contract with

the successful bidder. The form of contract to be entered into shall

also be specified in the invitation for bids.

(1) The successful bidder shall be required to provide a Performance

performance bond to the Contracting Authority within one week from Bond.

the date of the Letter of Award. The value of the performance bond

shall be included in the invitation for bids of the relevant competitive

bidding process.

(2) Without prejudice to the terms and conditions applicable to

the relevant competitive bidding process, the performance bond shall

be forfeited by a bidder, inter alia, if the bidder fails to satisfy the

conditions in regulation 7.

(3) In the case when the capacity of an approved renewable

energy installation as installed and connected to the grid is lower than

the capacity allocated during the bidding process, the forfeiture of the

performance bond shall be in accordance with the terms and

conditions established for such purpose by the relevant competitive

bidding process.

Bids which are deemed as being administratively

compliant shall be ranked according to the bid price per kWh with the

lowest bid price per kWh being given the first preference. The bid

installation kWp capacity shall be selected pursuant to the

competitive bidding process, starting from the lowest bid offered, and

provided that the kWp available for allocation in the particular

competitive bidding process is not exceeded.

The letter of award to the successful bidder shall include,

but not be limited to, the following

(a)

details of the bidder;

(b)

awarded bid price per kWh;

(c)

capacity in kW and threshold on the units of

electricity for which the bid price per kWh may be paid in each

calendar year for the guaranteed period.

The Contracting Authority shall publish on its website the

results of each competitive bidding process, including the awarded

bid price per kWh for each successful bidder for each approved

renewable energy installation and the corresponding capacity in kWp,

as established in the competitive bidding process.

The successful bidder shall bear the costs of connection of

the approved renewable energy installation to the nearest suitable

point of connection to the distribution system. The costs for

connection to the distribution system shall be determined by the

distribution system operator in accordance with the Electricity Supply

Regulations.

(1) The letter of award issued to a successful bidder Permits.

pursuant to a competitive bidding process shall only grant to that

successful bidder the right to be paid the price per kWh and shall not

be, nor shall it be deemed to grant or constitute, an automatic

authorisation to construct an approved renewable energy installation

or give any right for the issue of any authorisation, licence or permit

which may be required. The successful bidder shall be responsible to

obtain any relevant permits, authorisations and licences within the

timeframes indicated in regulation 7. The successful bidder shall

submit applications for permits, authorisations and licences in

accordance with the applicable laws and procedures with a view to

obtaining such permits, authorisations and licences. Any cost related

to obtaining the required permits, authorisations, license shall be

borne by the successful bidder.

(2) The issue of the letter of award shall not grant the

successful bidder any right to damages or compensation if any of the

permits, authorisations and licences required are not issued for any

reason whatsoever. The performance bond shall be forfeited in favour

of the Contracting Authority in any such cases.

(1) The awarded bid price per kWh shall become Payment of bid

applicable as from the date of installation of the metering equipment price

awarded.

by the distribution system operator and shall continue to be applicable

for the duration of the guaranteed period.

(2) Payment of the awarded bid price per kWh shall be based

on actual meter readings obtained from the metering equipment

referred to in sub-regulation (1) and capped to a maximum kWp and

units of electricity according to the letter of award.

A competitive bidding process for the award of support for Frequency of

eligible renewable energy installations with capacity of 1000kWp or competitive

bidding process.

more shall be launched as a minimum on a yearly basis for such

capacity as indicated in the relevant competitive bidding process.

Without prejudice to the generality of the foregoing, the Wind

terms and conditions of a competitive bidding process made public installations.

and published in the Gazette, and applicable to wind installations

shall require as a pre-requisite in any such competitive bidding

process the issue of the applicable Planning Permit as may be

required by law.

The Public Contracts Review Board established by Appeals.

regulation 80 of the Public Procurement Regulations shall have S.L.174.04

jurisdiction to hear and determine complaints submitted by any

person having or having had an interest in competitive bidding

process made under these regulations and in accordance with the

B

procedures laid down in those regulations.

€0.90