European Commission welcomes Malta’s support scheme for renewable energy

Deputy Prime Minister Louis Grech welcomed the European Commission’s decision announced yesterday, that Malta’s plans to support power generation from renewable sources are in line with the EU state aid rules. The approved scheme will increase electricity produced from renewable sources and will add on to Malta’s efforts to realize its EU-set 10% renewable energy target for the year 2020.

Malta notified the Commission with its prospective plans in December 2015 to support operators of solar photovoltaic and onshore wind installations. This aid will 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 allocated to this measure is approximately €140 million, to be used between 2016 and 2020.

According to the European Commission’s Directive 2009/28/EC Malta has to meet a target of 10% Renewable Energy Share in Gross Final Consumption of Energy by the year 2020. The Directive promotes cooperation amongst EU states and countries outside the EU to help its members to meet their renewable targets. These initiatives can take the form of statistical transfers of renewable energy, joint renewable energy projects and cooperative renewable energy support schemes

The Commission also based its decision on the plans presented by Malta through the Ministry of Energy under the 2014 Guidelines on state aid for environmental protection and energy, which allow Member States to support the production of electricity from renewable sources under certain conditions.

The measures presented by Malta are being welcomed as such an initiative will encourage the deployment of renewable electricity installations in line with the Guidelines. Operators above 500kW will receive no feed-in tariff but market based premium payments. The EU approved scheme will ensure that the potential distortion of competition brought about by the public financing is minimised.

In commenting on this positive news Deputy Prime Minister Louis Grech said that “Malta has already achieved 4.7% of the set renewable energy targets in 2014. This approved plan will now bring in new impetus that will drive the country in achieving its set targets”.

This aid will be granted in the form of a premium payment on top of the market price.