Insights

For a number of years the Government of Malta has sought to encourage the development of renewable energy projects through the grant of feed-in-tariffs.  The regulations which apply to the grant of feed-in-tariffs to renewable energy projects vary, depending on the capacity of a particular installation, with installations having a capacity of less than 40kWp being regulated by the Feed-In-Tariffs Scheme (Electricity Generated from Solar Photovoltaic Installations) Regulations (Subsidiary legislation 545.27 of the laws of Malta), and installations having a capacity of more than 40kWp being regulated by the Competitive Bidding Rules for Installations Producing Electricity from Renewable Energy Sources Regulations (Subsidiary legislation 545.39 of the laws of Malta (the “Competitive Bidding Rules”)).

Competitive bidding processes under the Competitive Bidding Rules have been issued on a relatively frequent basis by the Regulator for Energy and Water Services (“REWS”)^[1], with different processes being issued for installations which have a capacity from 40KW to less than 200KW; from 200KW to less than 1000KW; and for those which have a capacity of more than 1000KW.  The most recent invitations to bid were published on the 1^st March 2024 with bids being accepted in the coming weeks and with further calls planned later on in the year^[2].

While the invitations to bid for each of the tenders are very similar to those which had been published previously by REWS, the publication of the aforementioned invitations to bid was preceded by amendments to the Competitive Bidding Rules, with two major changes being introduced which seek to continue to encourage the uptake of renewable energy projects in Malta, and the upgrading of the Maltese energy framework.

The first amendment to the Competitive Bidding Rules has been the deletion of what was previously Regulation 7(8), and which previously stated that “[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”.  This previous restriction had effectively rendered the Guarantees of Origin of Electricity from High-Efficiency Cogeneration and of Energy from Renewable Energy Sources Regulations (Subsidiary legislation 545.36 of the laws of Malta) ineffectual, since it was restricting the developers of larger projects from applying for guarantees of origin for the electricity generated from renewable energy sources.  The removal of this restriction should see the start of Guarantees of Origin^[3] being issued in Malta.  Apart from adding an incentive to generators of renewable energy, the issuance of Guarantees of Origin should also help Malta’s documented energy mix to reflect and recognise energy being produced from renewable energy sources in Malta.

The second amendment to the Competitive Bidding Rules has been the deletion of Regulation 15(3)(c), which previously stated that the payment of the awarded bid price would be without prejudice to the deduction of any previously investment aid which the renewable energy installation in question would have benefitted from, with the removal of this restriction also mirroring developments in European Union state aid rules.

These developments are welcome developments which should continue to encourage the development of renewable energy projects in Malta and the further development of Malta’s energy framework.

[1] https://rews.org.mt/?ts=1662018800735#/en/tenders/224

[2] https://rews.org.mt/?ts=1662018800735#/en/a/512-call-for-bids-itb

[3] For a further discussion on Guarantees of Origin of Electricity and of Energy in Malta, see:  https://ganado.com/news/practice-news/guarantees-of-origin-of-electricity-and-of-energy-in-malta/