COMPETITIVE BIDDING RULES FOR INSTALLATIONS PRODUCING ELECTRICITY FROM RENEWABLE ENERGY SOURCES REGULATIONS

PRODUCING ELECTRICITY FROM RENEWABLE ENERGY

SOURCES

SUBSIDIARY LEGISLATION 545.39

COMPETITIVE BIDDING RULES FOR

INSTALLATIONS PRODUCING ELECTRICITY FROM

RENEWABLE ENERGY SOURCES REGULATIONS

3rd February, 2023

LEGAL NOTICE 21 of 2023, as amended by Legal Notices 34 of 2024, 54

of 2025 and 93 of 2026.

The title of these regulations is the Competitive Bidding

Rules for Installations Producing Electricity from Renewable Energy

Sources Regulations.

(1)

The scope of these regulations is to govern the

competitive bidding process through which the premium per kWh that

shall be paid on 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 forty kilowatts (40kW) or greater.

(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

premium per kWh shall apply;

"approved renewable energy installation" means an

eligible renewable energy installation which, once

commissioned, 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;

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SOURCES

"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

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SOURCES

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,

regulating the payment of the premium 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 on the market from an approved renewable energy

installation;

"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

PRODUCING ELECTRICITY FROM RENEWABLE ENERGY

SOURCES

other association of persons, and any renewable energy

community;

"eligible renewable energy installation" means a new

renewable energy installation having a capacity of forty

kilowatts (40kW) or more which, once constructed and

commissioned, produces electricity from a renewable energy

source, which may be granted financial support for the first

time following a competitive bidding process

Provided that up to five (5) new renewable energy

installations employing the same technology which shall be

installed at separate locations and, where each has a capacity

inferior to forty kilowatts (40kW), but which together have a

total capacity exceeding forty kilowatts (40kW), may be offered

by a bidder as a single bid at the same bid price;

"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 premium per kWh for the

electricity generated and sold directly to the market from an

PRODUCING ELECTRICITY FROM RENEWABLE ENERGY

SOURCES

approved renewable energy installation is guaranteed;

"kW" means kilowatt, which in the context of these

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

renewable energy installation, and specifically to the nominal

direct current (kWp) rating in the case of solar photovoltaic

installations;

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

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

which shall apply when the awarded bid price per kWh is

different from the proxy for the market price per kWh

Provided that the premium shall be negative when

the proxy for the market price exceeds the awarded bid price

per kWh, and that the premium shall be zero when the market

"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;

PRODUCING ELECTRICITY FROM RENEWABLE ENERGY

SOURCES

"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 awarded bid price 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 premium per kWh 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

PRODUCING ELECTRICITY FROM RENEWABLE ENERGY

SOURCES

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 premium 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.

(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 premium 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 premium 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

PRODUCING ELECTRICITY FROM RENEWABLE ENERGY

SOURCES

of the contract for difference.

(8)

Repealed by Legal Notice 34 of 2024.

(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

Provided that this sub-regulation shall also be applicable

to each of the multiple installations having a capacity inferior to forty

kilowatts (40kW) and which have been presented as a single

installation having a capacity equal to forty kilowatts (40kW) or

greater.

(1)

Bids which are administratively compliant shall

be ranked according to the bid price per kWh where the lowest bid

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

following

(a)

the details of the bidder;

(b)

the awarded bid price per kWh;

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(c)

the capacity in kW of the approved renewable

energy installation;

(d)

the capping on the units of electricity for which

the premium 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 by means of a

contract for difference 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, commissioned, and in respect of which

an application has been submitted for connection to the grid, is lower

than the capacity allocated to the successful bidder on the basis of the

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

process shall be issued with a letter of award as provided for in

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

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installation in accordance with the terms of the competitive

bidding process; and

(b)

submit the necessary applications to the

distribution system operator to connect the approved renewable

energy installation to the distribution system.

(3)

Deleted by Legal Notice 54 of 2025.

(4)

Deleted by Legal Notice 54 of 2025.

(5)

Failure to comply with the obligations established in sub-

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

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 limits referred to in sub-regulation

(2) shall be as follows

(a)

for installations having a capacity less than one

thousand kilowatts (1000 kW), the applicable time limit shall

be twenty-four (24) months from the date of the letter of award;

and

(b)

for installations having a capacity of one thousand

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

thirty-six (36) months from the date of the letter of award.

(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).

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(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, subject to the relevant alternative

documents as established in the relative competitive bidding process

documentation being submitted instead, an approved planning permit

shall not be a pre-requisite for the proposal in a competitive bidding

process of a renewable energy installation which meets all three (3) of

the following conditions

(a)

the proposed installation shall be a solar

photovoltaic installation; and

(b)

the proposed installation shall have a capacity of

one thousand (1000) kW or greater; and

(c)

the proposed installation shall not be installed on

one (1) or more greenhouses.

(1)

The successful bidder shall bear the costs of

connection of the approved renewable energy installation to the

nearest suitable point of connection of the distribution system.

(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 premium per kWh shall become payable as

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

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 premium 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 premium referred to in sub-

regulation (1) shall be without prejudice to 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.

Standard balancing responsibilities as established in

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

of the 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)

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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.