Regulations, 2020

L.N. 93 of 2020

PUBLIC FINANCE MANAGEMENT ACT

(CAP. 601)

REGULATOR FOR ENERGY AND WATER SERVICES ACT

(CAP. 545)

Competitive Bidding Rules for Renewable Sources of Energy

Installations (Capacity between 400kwp and less than 1000kwp)

Regulations, 2020

IN EXERCISE of the powers conferred by article 4 of the Public

Finance Management Act, and in exercise of the powers conferred by

article 37 of the Regulator for Energy and Water Services Act, the

Minister for Finance and Financial Services and the Minister for

Energy and Water Management after consultation with the Regulator

for Energy and Water Services, has made the following regulations: -

(1) The title of these regulations is the Competitive

commencement.

Bidding Rules for Renewable Sources of Energy Installations

(Capacity between 400kWp and less than 1000kWp) Regulations,

2020. These regulations shall come into force on the 1 st January

(2)

2020.

(1) Unless otherwise stated in these regulations, the

definitions in the Public Finance Management Act shall apply.

(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 1 st January and ending on the 31 st December

of each year;

"approved renewable energy installation" means a new

renewable energy installation with a capacity between 400kWp

and less than 1000kWp and granted financial support pursuant to

a competitive bidding process;

"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 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;

"electricity from renewable energy sources" means

electricity produced by plants using only renewable energy

sources, as well as the share in terms of calorific value of energy

produced from renewable energy sources in hybrid plants which

also use conventional energy sources. It includes renewable

electricity used for filling storage systems, but excludes

electricity produced as a result of storage systems;

"eligible renewable energy installation" means a new

renewable energy installation with a capacity between 400kWp

and less than 1000kWp applying to be granted financial support

pursuant to a competitive bidding process;

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

year during which the renewable energy installation produces 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 price per kWh for the electricity generated and sold

to the distribution 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 at standard test

conditions 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 renewable energy installation" means a renewable

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

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 Scope.

competitive bidding process as the method to determine the fixed price

per kWh to be paid for electricity generated and sold to the distribution

system operator from approved renewable energy installations with a

capacity between 400kWp and less than 1000kWp and hence to

promote and support the generation of electricity from renewable

energy sources. The method and amount of support for renewable

photovoltaic installations with a kWp capacity lower than 400kWp

shall continue to be determined administratively. For the purpose of

calculating the capacity of a renewable energy installation, 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 in Commission Regulation (EU) No 651/2014 of 17 June 2014

declaring certain categories of aid compatible with the internal market in

application of Articles 107 and 108 of the Treaty, as amended by

Commission Regulation (EU) No 2017/1084 of 14 June 2017 amending

Regulation (EU) No 651/2014 as regards aid for port and airport

infrastructure, notification thresholds for aid for culture and heritage

conservation and for aid for sport and multifunctional recreational

infrastructures, and regional operating aid schemes for outermost

regions and amending Regulation (EU) No 702/2014 as regards the

calculation of eligible costs, and as may be subsequently amended.

(4) Any investment aid previously received towards the same

renewable energy installation must be deducted from the premium

awarded under this measure.

The price per kWh to be paid for electricity generated and

sold to the distribution system operator from eligible renewable energy

installations shall be determined through a competitive bidding

process

Provided that the payment of any price per kWh to an

undertaking that has benefited from earlier unlawful aid granted by

Malta and 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

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

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 price

per kWh applicable to all offers or different caps for different

categories as may be defined by the Contracting Authority in the

competitive bidding process.

(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 stated 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

extension 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 which shall be open to all generators

producing electricity from renewable energy sources on a non-

discriminatory basis

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 with Commission Regulation (EU) No 651/

2014 of 17 June 2014 declaring certain categories of aid compatible

with the internal market in application of Articles 107 and 108 of the

Treaty, as amended by Commission Regulation (EU) No 2017/1084 of

14 June 2017 amending Regulation (EU) No 651/2014 as regards aid

for port and airport infrastructure, notification thresholds for aid for

culture and heritage conservation and for aid for sport and

multifunctional recreational infrastructures, and regional operating aid

schemes for outermost regions and amending Regulation (EU) No 702/

2014 as regards the calculation of eligible costs, and as may be

subsequently amended.

(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) Where 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

and the corresponding eligible renewable energy 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 kWp 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

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

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

time-frames stated 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 a capacity between competitive

bidding process.

400kWp and less than 1000kWp may be launched as may be decided

by the Minister, and for such capacity as stated in the relevant

competitive bidding process.

The Public Contracts Review Board established by Appeals.

regulation 80 of the Public Procurement Regulations shall have S.L. 601.03.

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 procedures laid

down in those regulations.

€0.99