SALE OF ELECTRICITY GENERATED FROM COGENERATION UNITS REGULATIONS

SUBSIDIARY LEGISLATION 545.29

SALE OF ELECTRICITY GENERATED FROM

COGENERATION UNITS REGULATIONS

26th May, 2015

LEGAL NOTICE 170 of 2015, as amended by Act XXV of 2015, Legal

Notice 370 of 2016, 119 of 2017 158 of 2018, 172 of 2019, 17 and 297 of

2021, 87 of 2022 and 45 of 2023.

(1) The title of these regulations is the Sale of Electricity

generated from Cogeneration Units Regulations.

(2) The purpose of these regulations is to regulate the sale of

electricity generated from cogeneration units and supplied to the

distribution system operator.

(Regulation 7)

Total maximum cogeneration unit electricity capacity MWe that

may be approved for the payment of the proxy for the market price

per annum for any electricity generated and sold to the distribution

system operator from such cogeneration unit capacity shall be

3MWe each year.

(1) Unless otherwise stated in these regulations, the

definitions in the Act shall apply.

(2)

In these regulations, unless the context otherwise requires

"the Act" means the Regulator for Energy and Water Services

Act;

"annual", "annum" or "year" means the period of time commencing

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

"change of use of premises" means the change in the

classification of a premises in terms of these regulations whether

domestic or residential or non-residential or institutional

household;

"co-generation" means the simultaneous generation in one

process of thermal energy and electrical or mechanical energy;

"cogeneration unit" means a unit that is able to operate in

cogeneration mode;

"commissioned" means the first time a cogeneration unit is put

into operation, following the establishment of operational

readiness;

"consumed on site" means consumed on the same premises

where the cogeneration unit is installed;

"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" means a person responsible for

o p e r a t i n g , e n s u r i n g t h e m a i n t e n a n c e o f a n d , i f n e c e s s a r y,

developing the distribution system in a given area and, where

applicable, its interconnections with other systems and for ensuring

the long-term ability of the system to meet reasonable demands for

the distribution of electricity;

"domestic premises" means premises which include private

dwellings with no persons registered with the distribution system

operator as residing in them such as second homes, or private

garages and common areas including roofs, stairs, terraces, gardens

to buildings which are used solely for private dwellings;

"electricity from cogeneration" means electricity generated in a

process linked to the production of useful heat and calculated in

accordance with the methodology laid down in the First Schedule

of the Energy Efficiency and Cogeneration Regulations;

"installation operator" means the holder of the licence to

generate electricity from the cogeneration unit;

"institutional households" shall include the following premises

(a) healthcare institutions such as premises used as a

hospital, nursing home or as any institution providing

medical or nursing care;

(b) institutions for retired, elderly or disabled persons,

including premises used as a home for the retired or

elderly persons or persons with any disability;

(c) educational institutions including premises used as a

boarding school or for similar purposes;

(d) care institutions including premises used as

orphanages, shelter homes, open centres for refugees

or for similar purposes;

(e) religious institutions including premises used as

convents, retreat houses, or for similar purposes;

(f)

military institutions such as military barracks;

(g) other institutions including premises used as boarding

houses, penal or correctional facilities or for similar

purposes;

"kVAh" means kilo Volt Ampere hour;

"kW" means kilo Watt;

"kWh" means kilo Watt hours;

"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;

"the Minister" means the Minister responsible for resources;

"MWe" means the electricity capacity rating of a cogeneration

unit;

"nominal installed capacity" means the nominal electricity rating

MWe as defined on the rating plate of the cogeneration unit;

"non-residential premises" means a building or plot of land

which is used wholly or mainly for the purpose of conducting an

economic activity, but does not include any building such as private

garages or common areas to buildings which are used solely as

private dwellings;

"operational readiness" means the capability to function in

accordance with design and specifications;

"p remi ses code" m eans a uniq ue num ber assigned by t he

distribution system operator identifying a particular premises with

its individual service address and served with electricity and, or

water;

"proxy for the market price" shall have the same meaning as

assigned to it in the Electricity Regulations;

"the Regulator" means the Regulator for Energy and Water

Services as established by the Act;

"renewable energy sources" means renewable non-fossil energy

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

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

"residential premises" means any premises used solely and

regularly as a private dwelling where at least one person resides but

does not include institutional households;

"scheduled" means in accordance with the scheduled programme

of ARMS Limited for the taking of periodic electricity meter

readings;

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

Supply Regulations.

(Regulations 4, 5, 6, 7 and 11)

Repealed by Legal Notice 45 of 2023.

These regulations shall apply to electricity exported to the

distribution system from any cogeneration unit equipped for the

recuperation and utilization of the thermal energy produced and

producing electricity from fossil fuel or renewable energy, installed

either in a residential or domestic premises or non-residential or

institutional household and connected to the distribution system

either directly or indirectly with the appropriate protection and

metering equipment provided by the distribution system operator.

(1) In the case of any cogeneration unit commissioned and

connected to the distribution system in terms of regulation 3, the

installation operator may

(a)

either sell all the electricity generated by the

cogeneration unit to the distribution system operator

and be paid by the distribution system operator the

proxy for the market price established under the

Electricity Regulations; or

(b) generate electricity primarily for own consumption

and be paid by the distribution system operator the

proxy for the market price established under the

Electricity Regulations for any excess electricity

generated and exported to the distribution system

Provided that the consumption of the electricity

generated, in accordance with this paragraph, may only

be done by the installation operator who is a registered

consumer with the distribution system operator with

respect to the same premises code where the cogeneration

unit is installed.

(2)

The electricity generated -

(a) from cogeneration units separately installed shall be

separately metered; and

(b) from solar photovoltaic installations or other

renewable energy sources connected with the same

premises code as cogeneration units installed in terms

of sub-regulation (1) shall also be separately metered.

(3) In the case where the installation operator takes the option

available in terms of sub-regulation (1)(b), the distribution system

operator shall install metering equipment to measure all the

electricity generated by the cogeneration unit in addition to the

import/export metering equipment.

Without prejudice to the generality of the foregoing, subject

to the attainment of the consent of the distribution system operator,

the installation operator may install metering equipment to measure

all the electricity generated by the cogeneration unit as an

alternative to the installation of metering equipment by the

distribution system operator for the purpose of measuring all the

electricity generated by the cogeneration unit.

(4) An installation operator who generates electricity from a

cogeneration unit connected with the same premises code as solar

photovoltaic installations installed primarily for own consumption and

exporting any excess electricity to the distribution system and, or other

installations generating electricity from renewable energy other than

solar photovoltaic installations, being all installed with the option to

generate primarily for own consumption, shall for any excess

electricity generated and exported to the distribution system be paid by

the distribution system operator at the proxy for the market price

established under the Electricity Regulations.

(1) The payment for the electricity produced from the

cogeneration unit and sold to the distribution system operator shall

be due from the date when the cogeneration unit is first connected

to the distribution system as provided in regulation 3.

(2) The payment of the proxy for the market price established

under the Electricity Regulations shall be subject to the approval of the

cogeneration capacity as required in these regulations.

(3) The payment effected by the distribution system operator to

installation operators for electricity generated by cogeneration

units in accordance with regulation 3 shall be deemed to be

inclusive of any compensation for loss of revenue arising from any

planned and unplanned interruption which impedes the export of

electricity from the cogeneration unit to the distribution system.

Any installation operator, who in force of these regulations,

is being paid or may be paid the marginal cost, however so

described, shall, as from the entry into force of this regulation, be

paid the proxy for the market price.

(1) The eligibility for the payment for any electricity

generated by the co-generation unit and sold to the distribution

system operator is subject to

(a) the cogeneration unit obtaining all the necessary

authorisations, licences or permits from the relevant

competent authorities and the distribution system

operator;

(b) the cogeneration unit is equipped with metering

equipment that measures all the electricity generated

by the cogeneration unit in addition to the import/

export metering equipment;

(c) the installation operator’s compliance at all times with

the obligations established in these regulations, the

Network Code and all other applicable legislation.

(2) The payment of the proxy for the market price established

under the Electricity Regulations shall only be applicable up to the

total amount of electricity sold to the distribution system as

measured by the metering equipment provided by the distribution

system operator and to the extent of the cogeneration unit MWe

capacity approved by the Regulator

Provided that the approval of cogeneration MWe capacity

by the Regulator shall be subject to the overall cap for the MWe

capacity that may be approved in any year as established by the

Electricity Regulations.

The total maximum cogeneration electricity capacity MWe

that shall be eligible for the sale of electricity to the distribution

system operator and the payment of the proxy for the market price

established under the Electricity Regulations by the distribution

system operator for exported electricity from such cogeneration

unit after the entry into force of these regulations shall be that

established in the First Schedule.

(1) The distribution system operator may set off amounts

due by an installation operator for the supply of electricity against

amounts due to the installation operator for the exporting of

electricity under these regulations

Provided that such setting off shall only be permissible

where the claims are undisputed or are certain, liquidated and due.

(2) Where a set-off arrangement between the installation

operator and the distribution system operator is in place and the

amounts due to the installation operator for the exporting of

electricity referred to in sub-regulation (1) are in excess of the

amounts due by an installation operator for the supply of electricity

by the distribution system operator, the distribution system

operator shall credit the installation operator the balance due by

means of a credit note

Provided that the installation operator may request to be

paid the balance due by means of such credit note, after four

consecutive scheduled billing periods for the supply of electricity

by the distribution system operator to the installation operator, have

elapsed.

(3) Where no set-off agreement exists between the installation

operator and the distribution system operator and the amounts due

to the installation operator for the exporting of electricity are in

excess of the amounts due by an installation operator for the supply

of electricity by the distribution system operator, the distribution

system operator shall credit the installation operator the balance

due, which shall be paid to the installation operator within sixty

days from the scheduled reading of the metering equipment

Provided that the distribution system operator shall carry

out the reading of the metering equipment within intervals of at

least two months, to be reckoned as from the date of the first

reading of the metering equipment.

Installation operators shall

(a) submit such information

as

the Regulator may

reasonably require;

(b) inform the Regulator and the distribution system

operator, in the form and manner they may reasonable

require, if the cogeneration units have been

disconnected or transferred, sold or in any form

modified in such a way as to change their

performance;

(c)

comply at all times with the provisions of

the applicable legislation, notification, authorisation,

licence conditions and Network Code as approved by

the Regulator;

(d) make available to the distribution system operator and

to the Regulator data required to be recorded for the

purposes of these regulations.

Where an installation operator is deceased, or by reason of

any other act or event, permanently ceases to be the installation

operator, payment for electricity generated by the cogeneration unit

and exported to the distribution system under these regulations may

be transferred to the new installation owner

Provided that

(a) the new installation operator informs the distribution

system operator and the Regulator of such change in

ownership in such form and manner as they may

establish, together with any documentary proof and

information that they may establish for such purposes;

(b) the new installation operator takes over all obligations

held by the previous installation operator;

(c) such person shall not be considered by the distribution

system operator and, or the Regulator as a new

installation operator if such installation operator is not

in compliance with any other law, permit or any

requirement in relation to the cogeneration unit.

(1) Modifications relevant to the cogeneration unit

installation arising from -

(a) change of use of the premises where the cogeneration

unit is located;

(b) change of account holder;

(c) transfer of the cogeneration unit to another different

premises with same use;

(d) transfer of cogeneration unit to another different

premises with different use;

(e) change of the option from "sell all the electricity

generated" to "generate electricity primarily for own

consumption" or vice versa,

shall only be made after obtaining the necessary permits and

clearance from the Regulator and the distribution system operator.

(2) In the case where an installation operator increases the

generation capacity of a cogeneration unit which is connected to

the distribution system, the payment of the proxy for the market

whole unit as extended, provided that the installation operator

obtains all the necessary authorisations, licences and permits.

(3) The changes listed in sub-regulations (1) and (2) shall

become applicable for the payment of the marginal cost from the

date of the first meter reading taken after the date of submission of

an application to the distribution system operator to approve and

take the necessary action.

Installation operators shall not be entitled to any tradable

certificates including tradable guarantees of origin for electricity

generated from the cogeneration unit.

The provisions dealing with access, inspection,

modification or tampering of meters found in the Electricity Supply

Regulations shall mutatis mutandis apply to installation operators

under these regulations in the same manner as provided for in those

regulations.