from Renewable Energy Sources Regulations, 2023

L.N. 21 of 2023

REGULATOR FOR ENERGY AND WATER SERVICES ACT

(CAP. 545)

Competitive Bidding Rules for Installations Producing Electricity

from Renewable Energy Sources Regulations, 2023

IN EXERCISE of the powers conferred by article 37 of the

Regulator for Energy and Water Services Act the Minister responsible

for energy and water services, after consultation with the Regulator for

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

The title of these regulations is the Competitive Bidding

Rules for Installations Producing Electricity from Renewable Energy

Sources Regulations, 2023.

(1) The scope of these regulations is to govern the

competitive bidding process through which the fixed price per kWh to

be paid for electricity generated and sold directly to the market from

approved renewable energy installations is determined, and hence to

promote and support the generation of electricity from renewable

energy sources.

(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.

(3) These regulations shall apply to renewable energy

installations with a capacity equal to one thousand kilowatts (1000kW)

or greater

Provided that in respect of installations having a capacity

equal to or greater than forty kilowatts (40kW) but less than one

thousand kilowatts (1000kW), they shall be applicable as of the 1 st of

January, 2024.

(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 cap" means the maximum number of kWh

generated annually for the period of time commencing on the 1st

January and ending on the 31st December of each year and sold

directly to the market, to which the payment of the fixed awarded

bid price per kWh shall apply;

"approved renewable energy installation" means an eligible

renewable energy installation which produces electricity from a

renewable energy source and which is granted financial support

for the first time following a competitive bidding process in

accordance with these regulations and in respect of which a

contract for difference has been entered into between the

Contracting Authority and the successful bidder;

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

offered by a successful bidder during a competitive bidding

process;

"balancing" means balancing as defined in point 10 of

Article 2 of Regulation (EU) 2019/943 of the European

Parliament and of the Council of 5 June 2019 on the internal

market for electricity (recast);

"bid price per kWh" means price per kWh submitted by a

bidder in a competitive bidding process;

"commission" 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;

"Commission Regulation (EU) No 651/2014" means

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) 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 by Commission Regulation (EU) 2020/972 of

2 July 2020 amending Regulation (EU) No 1407/2013 as regards

its prolongation and amending Regulation (EU) No 651/2014 as

regards its prolongation and relevant adjustments, and by

Commission Regulation (EU) 2021/1237 of 23 July 2021

amending Regulation (EU) No 651/2014 declaring certain

categories of aid compatible with the internal market in

application of Articles 107 and 108 of the Treaty, and as may be

subsequently amended;

"competitive bidding process" means a non-discriminatory

bidding process that provides for the participation of a sufficient

number of undertakings and where the support is granted on the

basis of the bid submitted by the bidder. Moreover, the volume

related to the bidding process shall be a binding constraint

leading to a situation where not all bidders may receive support;

"competitive bidding process administrator" means any

entity delegated with the administration of the competitive

bidding process. The competitive bidding process administrator

for any competitive bidding process shall be named in the

documentation pertaining to that bidding process;

"contract for difference" means the contract entered into

between the Contracting Authority and a successful bidder,

governing the payment of the fixed price per kWh of electricity

up to the annual cap for each year of the guaranteed period, for

electricity generated from renewable energy sources and sold

directly to the market from an approved renewable energy

installation where such guaranteed fixed price shall be the sum

of the market price and the premium;

"contracting authority" means the contracting party

responsible for issuing and administering the competitive

bidding process, provided that any part of the administration of

the competitive bidding process may be delegated to a

competitive bidding process administrator;

"distribution" means the transport of electricity by means

of high voltage, medium voltage and low voltage distribution

systems with a view to its delivery to consumers, but not

including the supply;

"distribution system" means all the interconnected

technical facilities used for conveying electricity to final

customers;

"distribution system operator" means the same as the

meaning assigned to it in regulation 2 of the Electricity

Regulations;

"electricity from renewable energy sources" means

electricity produced by plants using only renewable energy

sources, or, in the case of hybrid plants which also use

conventional energy sources, the share of electricity produced

from renewable energy sources calculated in terms of their

calorific value. It includes renewable electricity used for filling

storage systems connected behind-the-meter, but excludes

electricity produced as a result of storage systems;

"electricity markets" means the same as the meaning

assigned to it in regulation 2 of the Electricity Regulations

Provided that until such time as an electricity market

exists which is open for successful bidders to sell electricity

directly to the market, electricity sold to the distribution system

operator shall be deemed to have been sold directly to the market

for the purposes of these regulations;

"eligible person" means any person, being a natural or legal

person, including any body corporate, company, society or other

association of persons, and any renewable energy community;

"eligible renewable energy installation" means a new

renewable energy installation which produces electricity from a

renewable energy source having a capacity of forty (40) kW or

more, which may be granted financial support for the first time

following a competitive bidding process;

"energy from renewable sources" or "renewable energy"

means energy from renewable non-fossil sources, namely wind,

solar (solar thermal and solar photovoltaic) and geothermal

energy, ambient energy, tide, wave and other ocean energy,

hydropower, biomass, landfill gas, sewage treatment plant gas,

and biogas;

"force majeure" means acts of God, strikes, lock-outs or

other industrial disturbances, acts of the public enemy, wars

whether declared or not, blockades, insurrection, riots,

pandemics, landslides, earthquakes, storms, direct lighting

strikes, floods, washouts, civil disorder, explosions and other

similar events which are unforeseeable, and which at the time of

the signing of any contract between the Contracting Authority

and a successful bidder, which by the exercise of all due

diligence cannot be overcome and which, in the view of the

Contracting Authority, prevent a successful bidder from adhering

to his obligations due to causes beyond his reasonable control;

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

calendar year during which the renewable energy installation

produces at its full nominal or kW capacity;

"generation" means the production of electricity;

"guaranteed period" means the period of time indicated in

the applicable competitive bidding process documentation for

which the renewable energy installation which was awarded

financial support under a competitive bidding process shall

remain operational, and for which the fixed awarded bid price

per kWh for the electricity generated and sold directly to the

market from an approved renewable energy installation is

guaranteed;

"kW" means kiloWatt and in the context of these

regulations shall be taken to refer to the nominal capacity of the

renewable energy installation;

"kWh" means one (1) kilo Watt per one (1) hour;

"market price" means the market price for electricity in

Malta which, until such time as a liquid intra-day wholesale

electricity market or an alternative pricing system for electricity

is established in Malta, shall be the proxy for the market price;

"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 and

water services;

"new renewable energy installation" means a renewable

energy installation which has never, in whole or in part, been

used for the generation of electricity;

"performance bond" means the performance bond which

shall be provided by a successful bidder to the Contracting

Authority in accordance with regulation 11;

"premium" means the difference between the awarded bid

when the awarded bid price per kWh is different from the market

when the market price exceeds the awarded bid price per kWh,

and that the premium shall be zero when the market price per

kWh is negative;

"proxy for the market price" means the same as the meaning

assigned to it in in regulation 2 of the Electricity Regulations;

"renewable energy community" means the same as the

meaning assigned to it in regulation 2 of the Promotion of Energy

from Renewable Sources Regulations;

"renewable energy installation" means a renewable energy

installation which produces electricity from a renewable energy

source.

"smart meter" means the same as the meaning assigned to it

in regulation 2 of the Electricity Supply Regulations;

"successful bidder" means a bidder whose offer is selected

following a competitive bidding process;

"supply" means the same as the meaning assigned to it in

regulation 2 of the Electricity Regulations.";

undertaking in difficulty" means an undertaking in

difficulty as defined in Article 2 of Commission Regulation (EU)

No 651/2014.

(1) The price per kWh which shall be paid for electricity Competitive

generated and sold directly to the market from eligible renewable bidding process.

energy installations shall be determined through a competitive bidding

process.

(2) Any eligible person may participate in the competitive

bidding process

Provided that no participant in the competitive bidding

process, irrespective of whether such participation is individual or

joint as part of a consortium or joint venture, shall be an undertaking in

difficulty.

(3) 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 the relative provisions of Commission Regulation

(EU) No 651/2014.

(4) The documentation pertaining to the competitive bidding

process shall also include terms and conditions which shall constitute

an integral part of the contract to be entered into between the

Contracting Authority and each successful bidder. The form of the

contract to be entered into shall be specified in the invitation for bids.

The frequency of competitive bidding processes and the

maximum capacity in kW associated with each one shall be at the

Minister’s discretion, and the launch of competitive bidding processes

shall be made public by means of a notice published in the Gazette.

Bids submitted in the competitive bidding process shall be

subject to an administratively established cap on the maximum bid

per kWh applicable to all offers or different caps for different

categories of installations.

(1) The awarded bid price per kWh resulting from a

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

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

market and shall be payable for the guaranteed period

Provided that in the first and last year of the guaranteed

period, the annual cap shall be applied on a pro rata basis for the

payment of the awarded bid price per kWh.

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

"pay-as-bid" such that each successful bidder shall receive an offer of

award of the bid price per kWh as submitted in said successful bidder’s

actual bid, and shall be paid in line with the provisions of the contract

for difference.

(3) The bidder shall submit a separate bid price per kWh for

each separate eligible renewable energy installation proposed, 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 proposed renewable

energy installation as described in the bid, including the capacity in

kW as offered in the bid, only as part of a specific competitive bidding

process call. The capacity associated with the bid price shall be

deemed to be equal to

Offered kW x Full Load Hours

1600. (5) Without prejudice to sub-regulation (4), where an approved

renewable energy installation selected pursuant to a competitive

bidding process is transferred to a third party, the validity of the

awarded bid price for every kWh may remain applicable to the said

approved renewable energy installation through an agreement entered

into between the successful bidder, the third party purchaser and the

Contracting Authority, subject to the third party obtaining any

necessary permits, authorisation and licences, as may be applicable

Provided that the provisions of sub-regulations (2) and (3)

of regulation 4 shall be applicable to such third party purchaser.

(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 directly to

the market, up to the annual cap calculated as following

Offered kW x Full Load Hours

Provided that the number of full load hours which shall

determine the annual cap for the payment of the awarded price per

kWh shall be dependent on the particular technology or technologies

being supported in the relevant competitive bidding process and

specified in the documentation applicable thereto.

(7) Any units generated by the installation in excess of the

annual cap in any calendar year shall not be subject to the provisions

of the contract for difference.

(8) A successful bidder shall not be entitled to tradeable

guarantees of origin or other tradeable certificates in respect of units of

electricity from renewable sources sold directly to the market for

which the successful bidder has received financial support.

(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 documents.

(1) Bids which are administratively compliant shall be Method of

ranked according to the bid price per kWh where the lowest bid price award of bids.

per kWh is ranked the highest.

(2) Bidders whose bids have been ranked in line with the

provisions of sub-regulation (1) shall be offered an award of financial

support starting from the highest ranking bid and the corresponding

eligible renewable energy installation kW capacity as proposed, and

the order of ranking shall continue to be followed until all ranked bids

which may be fully accommodated in the remaining unallocated

capacity for that competitive bidding process have been offered an

award of financial support.

(3) Where the next ranking offer is for a proposed installation

the capacity of which cannot be fully accommodated in the remaining

unallocated capacity associated with that competitive bidding process,

the Contracting Authority shall not make an offer to award support.

The Contracting Authority, or the bidding process

administrator when acting on its behalf, shall publish the results of

each competitive bidding process on its website, including the

awarded bid price per kWh for each successful bidder for each

approved renewable energy installation and the corresponding

capacity in kW, as established in the competitive bidding process.

(1) A letter of award shall be issued to each successful

and the contract.

bidder and shall include, but not be limited to, the following

(a)

the details of the bidder;

(b)

the awarded bid price per kWh;

(c) the capacity in kW of the approved renewable energy

installation;

(d)

the capping on the units of electricity for which

the bid price per kWh may be paid in each calendar year for the

guaranteed period; and

(e)

the applicable deadlines.

(2) The award offered shall be formalised through a contract

entered into between the Contracting Authority and the successful

bidder, which contract shall be signed within the time limit stipulated

in the invitation for bids of the relevant competitive bidding process.

(3) The letter of award issued to a successful bidder following

a competitive bidding process, or any contract entered into as a result

thereof, shall not be, nor shall it be deemed to grant or constitute, an

automatic authorisation to construct an approved renewable energy

installation, or to give any right for the issue of any authorisation,

licence or permit which may be required, nor shall it be deemed to

grant the successful bidder any right to damages or compensation if

any required permits, authorisations and licences required are not

issued for any reason whatsoever.

(1) A successful bidder shall be required to provide a

performance bond issued in favour of the Contracting Authority. The

value of the performance bond and the deadline for its submission

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

bidding process documentation.

(2)

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 to a successful bidder on the basis of said

bidder’s proposal during the bidding process, the complete or partial

forfeiture of the performance bond shall apply in accordance with the

terms and conditions established for such purpose in the relative

competitive bidding process documentation.

(1) Each successful bidder in a competitive bidding Validity of bid

process shall be issued with a letter of award as provided for in price per kWh.

regulation 10.

(2) In order to secure the validity of the awarded bid price per

kWh, a successful bidder shall, within the applicable time limit from

the date of the letter of award referred to in sub-regulation (1), comply

with the following obligations

(a) fully commission the approved renewable energy

installation in accordance with the terms of the competitive

bidding process; and

(b) submit an application to the distribution system

operator to connect the installation to the distribution system.

(3) If the successful bidder fails to fulfil the obligations laid

down in sub-regulation (2) within the applicable time limit, a one-time

request for an extension may be submitted in writing to the

Contracting Authority, which request shall reach the Contracting

Authority no later than one (1) month before the lapse of the deadline

arising out of the time limit established in sub-regulation (7).

(4) If an extension requested in terms of sub-regulation (3), is

acceded to by the Contracting Authority, and is availed of in part or in

full, the awarded bid price per kWh shall be reduced by zero point zero

zero five Euro per kWh (€0.005/kWh) for all electricity generated and

sold directly to the market up to the amount indicated in regulation

7(6), for the entire duration of the guaranteed period.

(5) Failure to comply with the obligations established in sub-

regulation (2) within the time limit established in sub-regulation (7) or,

where an extension is requested and granted, within the time limit as

extended, including where such failure results from a failure to obtain

the necessary permits required as described in regulation 13, shall lead

to the automatic withdrawal of the award, the termination of the

contract and the forfeiture of the performance bond.

(6) A verified event of force majeure may be invoked by a

successful bidder, in accordance with the related provisions included

in the invitation for bids of the relative competitive bidding process, to

request a suspension of the time periods established in sub-regulation

(7), which request may be granted at the Contracting Authority’s

discretion.

(7) The applicable time limit and maximum allowable

extension period referred to in sub-regulations (2) and (3) respectively

shall be as follows

(a) for installations having a capacity inferior to one

thousand (1000) kW the applicable time limit shall be eighteen

(18) months from the date of the letter of award, and the

maximum allowable extension shall be of six (6) months;

(b) for installations having a capacity of one thousand

(1000) kW or larger, the applicable time limit shall be twenty-

four (24) months from the date of the letter of award, and the

maximum allowable extension shall be of twelve (12) months.

(1) The successful bidder shall be responsible for

obtaining all necessary applicable or relevant permits, authorisations

and licences and shall bear the costs thereof.

(2) Applications for permits, authorisations and licences shall

be submitted to the relevant entities or authorities in accordance with

the applicable laws and procedures

Provided that where such submissions are made following

the receipt of a letter of award, the time required for their issuing shall

not suspend the running of the time periods established in regulation

12(7).

(3) Renewable energy installations which require a planning

permit shall be covered by an approved planning permit as a pre-

requisite to their being proposed in any competitive bidding process

Provided that an approved planning permit shall not be a

pre-requisite for the proposal of solar photovoltaic installations having

a capacity of one thousand (1000) kW or greater in a competitive

bidding process, subject to the relevant alternative documents as

established in the relative competitive bidding process documentation

being submitted instead.

(1) The successful bidder shall bear the costs of Connection of

connection of the approved renewable energy installation to the the

renewable

nearest suitable point of connection of the distribution system.

energy

installations.

(2) The costs for connection to the distribution system referred

to in sub-regulation (1) shall be determined by the distribution system

operator in accordance with the Electricity Supply Regulations.

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

as from the date of the installation of the metering equipment by the awarded

distribution system operator and shall continue to be so for the duration

of the guaranteed period as reckoned from that date.

(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 in accordance with the

provisions of regulation 7(6) as indicated in the letter of award.

(3) The payment of the awarded bid price referred to in sub-

regulation (1) shall be without prejudice to the following

(a) any reduction in bid price resulting from the

applicability of regulation 12(4); and

(b) the exclusion of the payment of aid to any

undertaking which is subject to an outstanding recovery order

following a previous Commission decision declaring an aid

granted by the Maltese authorities to the same undertaking

illegal and incompatible with the internal market, in compliance

with Article 1(4)(a) of Commission Regulation (EU) No 651/

2014; and

(c) where the renewable energy installation has

previously benefited from investment aid, to the deduction from

any premium due under this measure of any said previously

received investment aid, in compliance with Article 42(11) of

Commission Regulation (EU) No 651/2014, until such

investment aid is fully recovered.

Standard balancing responsibilities as established in Article Balancing

5 of Regulation (EU) 2019/943 of the European Parliament and of the responsibility.

Council of 5 June 2019 on the internal market for electricity (recast)

shall apply to the operation of renewable energy installations having an

installed capacity equal to or larger than two hundred (200) kW

Provided that this obligation shall be deemed to be in

abeyance until a liquid intra-day electricity market is developed.

The Public Contracts Review Board established by

regulation 80 of the Public Procurement Regulations shall have

jurisdiction to hear and determine the complaints submitted by any

person having or having had an interest in a competitive bidding

process made under these regulations and in accordance with the

procedures laid down in those regulations.

€1.17