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Introduction to Energy Law in Malta

March 2015 - Projects, Energy & Natural Resources . Legal Developments by Chetcuti Cauchi Advocates.

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Introduction to Energy Law in Malta

The recent part privatization of Enemalta Corporation was accompanied by a number of significant legislative developments in the field of energy law in Malta.

The primary legislative instrument supporting these changes was Act XXXIV of 2014, Chapter 536 of the laws of Malta which inter alia: made provision for the transfer of all the assets, rights, liabilities and obligations of Enemalta Corporation to Enemalta p.l.c.; regulated further the functions of distribution system operators; repealed Chapter 272, which was the Enemalta Act and also made provision for other matters deemed to be ancillary thereto or connected therewith. This article provides an overview of the Maltese energy law regime as it stands following these changes.

Energy Law in Malta: the Regulator

The main regulatory body on energy law in Malta is the Malta Resources Authority (the ‚ÄėMRA‚Äô), which is established by Chapter 423 of the Laws of Malta. The Malta Resources Authority Act confers upon the MRA all the powers and functions relating to the granting of any required licence, permit or other authorisation to a person intending to carry out or engage in a licensable activity or operation.[1]

The MRA‚Äôs role is to regulate, monitor and keep under review all the practices, operations and activities relating to energy; secure interconnectivity for the production, transmission and distribution of energy services; establish minimum quality and security standards in view of the practices, operations and activities that are carried out by the licence holder as well as to secure and regulate the development and maintenance of efficient systems with a view to satisfy, as economically as possible, all reasonable demands for the provision of the resources.[2] Moreover, energy law in Malta empowers the MRA to establish the measures regarding the protection of the environment and the promotion of efficient use of resources in energy practices, operations and activities. It is also within its responsibility to regulate the price structure for any licensable activity and, where appropriate, to establish the mechanisms as to how the price is to be charged, to establish the minimum qualifications which a person engaged in a regulated activity is to possess as well as to provide the necessary information to the public and other concerned entities on the matters which it regulates.

Another relevant authority is Transport Malta, being responsible for matters including, inter alia, the development of integrated transport policies to achieve non-polluting strategies. In effect, where any necessary public road works have to be undertaken for the purpose of distribution installations Transport Malta is involved throughout the process to ensure compliance with relevant standards.

The Framework of Energy Law in Malta

EU and local legislative efforts have resulted in the creation of a sophisticated corpus of energy law in Malta. One of the main legislative acts is the Malta Resources Authority Act since it establishes the primary authority for the regulation of all energy processes and activities in Malta. Furthermore, a number of subsidiary laws were enacted in conjunction with Chapter 423 of the laws of Malta. Amongst the most relevant for the purposes of this article are the Electricity Supply Regulation, the Electricity Market Regulations, the Natural Gas Market Regulations, the Water Supply Regulations and the Promotion of Energy from Renewable Sources Regulations.

The Electricity Supply Regulations, S.L. 423.01, treats technical matters in relation to electrical supply installations and the issuing of permits for the purpose of installing either single phase and/or three phase installations. S.L. 423.Electricity Market Regulations, concerns the generation, distribution and supply of electricity particularly with a view of enhancing consumer protection. For these reasons, these regulations lay down the rules on (i) the organisation and functioning of the electricity sector; (ii) open access to the market where applicable, the criteria and procedures applicable to calls for tenders and the granting of authorisations and the operation of systems; (iii) the universal service obligations and the rights of electricity consumers and clarification of competition requirements. These regulations further establish measures to safeguard the security of electricity supply. The Natural Gas Market Regulations, S.L. 423.21, establishes the common rules for the distribution of supply and storage of natural gas. It mainly relates to the organisation and functioning of the natural gas sector, access to the market, the criteria and procedures applicable to the granting of authorisations for distribution, supply and storage of natural gas and the operation of systems.

S.L. 423.19, the Promotion of Energy from Renewable Sources Regulations, as the name implies are regulations that promote the use of renewable sources over non-renewable resources. The definition of ‚Äėenergy from renewable sources‚Äô is very broad, encompassing even renewable sources which may not be accessible in Malta, such as geothermal and aero thermal energy. These Regulations are intended to enable Malta to meet the EU‚Äôs minimum national overall targets. By the year 2020, Malta is expected to meet the minimum national overall target of 10% generation through the use of renewable sources in its gross final consumption of energy.

Accordingly Chapter 504 of the laws of Malta, the Environment and Development Planning Act establishes MEPA as the responsible body for the protection of the environment, for the making of provision for the planning and management of development. For these reasons, this Act speaks of notions such as the combatting of pollution and radiation. Although as a piece of legislation it falls within the ambit of environmental law, it serves the role of identifying where energy practices, activities and operations require a monitoring and supervisory body which ensure the sustainable management of wastes and the promotion of its reduction, proper use, reuse and recovery of matter and energy.

Lastly, there is the Enemalta (Transfer of Assets, Rights, Liabilities and Obligations) Act, Chapter 536 of the laws of Malta. This act encompasses diverse matters including the transfer of the assets, rights, liabilities and obligations of Enemalta Corporation to Enemalta p.l.c., the right of the distribution system operator to fix the tariffs upon the MRA‚Äôs approval and that the distribution system operator may only enter into contracts of procurement of goods, services and materials in accordance with the Public Procurement of Entities operating in the Water, Energy, Transport and Postal Services Sectors Regulations.

Taken together, these instruments provide a framework for energy law in Malta which is broad and sophisticated, and which can support Malta‚Äôs energy sector as it enters a new phase in its development.

[1] Article 4(1)(b) of Chapter 423 of the laws of Malta

[2] Ibid 

Author: Dr Charles Cassar

Dr Charles Cassar leads the financial services regulatory team at Chetcuti Cauchi Advocates. Dr Cassar has advised clients from a variety of sectors of the financial industry including investment advisors, funds and their managers, insurance principals and intermediaries, banks and financial institutions. Dr. Charles Cassar is particularly interested in the intersection between technology and financial services, and has built a clientele which includes forex brokers, online payment institutions and virtual currency operators. Dr Cassar regularly delivers training sessions, career talks and seminars and has spoken at the University of Malta, Maastricht University and Society Education.