The European Commission has found plans by Malta to support power generation from renewable sources to be in line with EU state aid rules. The schemes will increase electricity produced from renewable sources, in line with EU energy objectives, without unduly distorting competition.
In December 2015, Malta notified plans to support operators of solar photovoltaic and onshore wind installations. Aid would be granted in the form of a premium payment on top of the market price.
According to the plans, onshore wind developers can also tender for support if an eligible site receives development consent during the lifetime of the scheme. The total budget of the measure will be approximately €140 million, allocated between 2016 and 2020.
The Commission assessed the plans under the 2014 Guidelines on state aid for environmental protection and energy ('the Guidelines'), which allow Member States to support the production of electricity from renewable sources under certain conditions.
The Commission found that the measures will encourage the deployment of renewable electricity installations and help Malta achieve their 2020 renewable energy targets. In line with the Guidelines, operators above 500kW receive no feed-in tariff but market based premium payments.
The Commission said that the scheme ensures that the potential distortion of competition brought about by the public financing is minimised.
Under the Renewable Energy Directive, Malta has a renewables target of 10% of gross electricity consumed by 2020. By the end of 2014 Malta had achieved 4% renewables share. This new measure is meant to help it realise the remaining 6%.
Minister Konrad Mizzi welcomed the green light received from the European Commission and highlighted that this will incentivise significant investment by the private sector in green energy. Currently, over 80MWp photovoltaic capacity have already been installed in Malta.
"The intent of the Maltese Government's proposed scheme, as part of the energy roadmap, was primarily for photovoltaic installations with a capacity of at least 1MWp, and may apply to wind farms in possession of a development approval, said Minister Mizzi.
He also highlighted that, over the last three years, the Government turned around the renewable sector and is now committed to sustain the momentum for further reducing emissions.
The Minister explained that the new scheme is essential for Malta to develop clean energy and is expected to provide support for at least 55% of the remaining 110MWp Photovoltaic capacity which still needs to be developed by 2020. Smaller systems will continue to be supported through existing feed-in tariff schemes and grants.
"Support will be allocated through a competitive process whereby prospective project developers will be able to submit a sealed bid for a support level corresponding to a specific capacity. Different ceilings shall apply depending on the installation type. However, all submissions will ultimately compete together. This will ensure that the most cost effective sites are developed first," he said.
This scheme will be complimented by the Solar Farm Policy which will determine suitable sites for the development of large scale photovoltaic systems and minimise the impact on the landscape.