Article from: OGEL 3 (2015), in Editorial
This joint OGEL and TDM Special issue focuses on renewable energy disputes at the level of international, European and national law. There are many ongoing cases at all three levels. Recent and ongoing renewable energy disputes under international law have concerned international investment law and WTO law. Recent renewable energy disputes at European level have mostly related to the free movement provisions of EU Treaty law. Contractual arrangements and connection issues serve as illustrations of private and contractual disputes in these areas at national level.
While it is difficult to map specific reasons or trends for these renewable energy disputes, they do seem to have two factors in common. Most relate to government regulation (or changes in regulation) and/or the scale of activities in this area of energy. The underlying issue in these cases is not new: it is that of investor rights versus the right of states to regulate. The answer lies in fair treatment for investors: protection of legitimate expectations and the economic balance of the original deal.
Renewable energy investment relies heavily on public subsidies and the surrounding regulatory framework. Changes in these areas during the lifetime of the project will significantly affect the business case for the investment. Where changes take place, investors react. Investment arbitration involving Spain, Italy and other EU countries followed changes in the regulatory frameworks that had been relied on by the investor.
States restrict foreign participation in the energy sector and in the renewable energy sector for various reasons. Local content requirements are common in the oil and gas industry. Similarly, requirements of national content have been applied to the renewable energy sector. Requirements relating to the need to establish a local company to participate in the oil and gas industry are common. Again, similar requirements have been established for the renewable energy sector. The EU case of Ålands Vindkraft and under the WTO dispute settlement mechanism case Dispute DS412, Canada - Certain Measures Affecting the Renewable Energy Generation Sector both relate to restrictions on foreign participation. In Sweden, the law required that the project must be located in the territory of Sweden. In the Canadian scheme, the law required that a portion of the equipment had to be manufactured in Canada. Mirroring the WTO disputes, the recent Energy Community proceedings raise similar issues.
All in all, the sudden surge in renewable energy investments and the close interaction with the applicable regulatory regime has translated into many cases being initiated at various levels. This special issue provides an up-to-date overview and analysis of both the recently decided and still on-going cases.