COMPETITIVE BIDDING RULES FOR RENEWABLE SOURCES OF ENERGY INSTALLATIONS (CAPACITY FROM 40KW UP TO LESS THAN 1000KW)

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

SUBSIDIARY LEGISLATION 545.32

COMPETITIVE BIDDING RULES FOR RENEWABLE

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

REGULATIONS

1st January, 2020

LEGAL NOTICE 93 of 2020, as amended by Legal Notice 212 of 2021.

The title of these regulations is the Competitive Bidding

Rules for Renewable Sources of Energy Installations (Capacity from

40kW up to less than 1000kW) Regulations.

(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 from 40kWp up to

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;

"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 support 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 support;

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

"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 from 40kW up to

less than 1000kW applying to be granted financial support

pursuant to a competitive bidding process;

"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,

epidemics, landslides, earthquakes, storms, direct lighting

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

similar unforeseeable events, which by the exercise of due

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

Contracting Authority prevent a successful bidder from

adhering to 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 relevant competitive bidding process during which the

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

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 and in the context of these

regulations shall be taken to refer to 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 the installation;

"kWh" means kilo Watt hour(s);

"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 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 (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;

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

"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 with a capacity between 40kW and less than 1000kW 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 thereof.

(3)

These regulations shall not apply to undertakings in

difficulty as defined in Commission Regulation (EU) No 651/2014 of

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

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 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 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 kW), as part of the competitive bidding process. The capacity

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

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

Offered kW 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 kW 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.

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

(1)

An approved renewable energy installation shall be

fully commissioned as described in the bid, including the capacity

offered in the bid, and an application to connect the installation to the

distribution system shall be 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 said fully

commissioned approved renewable energy installation to the

distribution system as indicated in sub-regulation (1) may be

extended once only by six(6) months by means of a request in writing

to the Contracting Authority, which request shall be made in the

format required by the Contracting Authority

Provided that if an extension is availed of, 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

to the distribution system operator up to the amount indicated in

regulation 5(6), for the guaranteed period.

(3)

The request in writing for an extension indicated in sub-

regulation (2) shall reach the Contracting Authority no later than one

(1) month before the lapse of the eighteen (18) month deadline

indicated in sub-regulation (1)

Provided that should an extension be requested but not

availed of, the reduction in the bid price established in the proviso to

sub-regulation (2) shall not be applicable.

(4)

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 established in sub-

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

approved renewable energy installation shall be fully commissioned

and an application to connect the installation to the distribution

system shall be submitted to the distribution system operator, for the

award pursuant to the competitive bidding process to remain valid.

Failure to comply with sub-regulations (1) (2), when a request for an

extension has been made, shall lead to the automatic withdrawal of

the award and the forfeiture of the performance bond

Provided that a verified event of force majeure may be

invoked by a successful bidder, in line with the provisions related

thereto included in the invitation for bids of the relevant competitive

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

bidding process, to request a suspension of the time periods

established in sub-regulations (1) and (2), which request may be

granted at the Contracting Authority’s discretion..

The launch of each competitive bidding process, as well

as the maximum capacity in kW as determined by the Minister for

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

Government Notice published in the Gazette.

(1)

The process shall be carried out through a

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 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 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 bond to 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 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.

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

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

installation kW capacity shall be selected pursuant to the competitive

bidding process, starting from the lowest bid offered, and provided that

the kW 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 kW, 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. Excepting any permits which may be required

by the provisions of the invitation for bids of the relevant competitive

bidding process, to have already been issued at the time of bidding, the

successful bidder shall be responsible to obtain any relevant permits,

SOURCES OF ENERGY INSTALLATIONS (CAPACITY

FROM 40KW UP TO LESS THAN 1000KW)

authorisations and licences within the time-frames established 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

applicable as from the date of installation of the metering equipment

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 kW and

units of electricity according to the letter of award.

A competitive bidding process for the award of support

for eligible renewable energy installations with a capacity from

40kWp up to 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.

(1)

The Public Contracts Review Board established

by regulation 80 of the Public Procurement Regulations shall have

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.

(2)

The rules for determining the amount of the deposit

necessary for submitting a complaint as provided for in sub-regulation

(1) shall be stipulated in the rules applicable to the invitation for bids

of the relevant competitive bidding process.