Renewable energy promotion and investment : the role of legal frameworks in creating a stable and predictable environment for investors as examined from the perspective of International law, European Union law, and comparatively the laws of India and the United Kingdom

Abstract

The methodology selected for this paper shall include an analysis made for each chapter that will be made based on legal principles relevant to that chapter given the current legal frameworks with analytical support provided by case law. This paper is not divided between investment and promotion but considers the two concepts linked. All reference to investors in this paper, unless indicated otherwise, shall mean an investor in RE in the electricity field. The paper shall, especially from the EU and Comparative perspective, assess the effectiveness of support schemes under national regulatory regimes that emanate from their respective legal frameworks; as policies and support tools that promote RE. In addition, from the EU law perspective effectiveness shall include protection afforded by the principle of legitimate expectation and legal certainty. For the international law section, reference to support schemes shall be avoided for the primary reason International law’s support mechanisms under a uniform structure are difficult to assess. Therefore, for the international law section reliance on principles of legitimate expectation and fair and equitable treatment shall be necessary to further determine the creation of a stable and predictable environment. However, for the comparative law perspective the assessment shall be limited to the effectiveness of support schemes and how these obstruct or contribute to creating a stable and predictable legal framework. In addition, an examination of foreign vs local products or investment shall not be included as this would delve into matters of discrimination and fall outside of the scope of the assessment. Moreover, it is important to emphasise that whilst this paper focuses on RE, consideration is attributed to RE for electricity and leaves out an assessment on sources and other uses of RE. In addition, the risks faced by investors shall be limited to an examination of legal remedies that protect investors against regulatory and political risk; without a detailed examination of what/how that risk my take form. Lastly, the analysis shall be limited to the legal frameworks, and any reference to case law shall be limited to interpretation of these frameworks and excludes an analysis of court procedures. In the International law chapter, the creation of a stable and predictable environment for investment will be analysed under the Energy Charter Treaty (ECT). The creation of such environment shall be based on obligation to protect investors against regulatory change whilst maintaining the host state’s right to regulate its own national regulatory regimes. Due to the lack of a comprehensive single international framework that ‘regulates all energy matters’, the ECT provides a favourable solution. Therefore, this chapter shall be limited to the ECT. Moreover, the analysis shall be limited to the ECT’s protection principles found in article 10 (1) which includes the Fair and Equitable Treatment (FET) standard, legitimate expectation and the role that specific commitments in the form of stabilization clauses may add to the level of protection. Therefore, whilst recognising that there are additional protection mechanisms for investors under the ECT including Most Favoured Nation and National Treatment and other discrimination protection mechanisms, this paper focuses solely on the ones mentioned above. Moreover, an analysis of jurisdiction or nationality will not be observed save for referencing to the scope of what it means to be an investor or what an investment is under ECT. In terms of the case law to be used in this chapter, these will primarily include case law as analysed under ECT but analysis from other tribunals under other IIAs shall be included. This is due to the fact that such case law are all referenced in ECT cases. Particular attention shall be given to the recent ECT cases which are a result of a change in Spain’s regulatory framework and recent arbitration awards. These cases, along with reference to other non-ECT case law shall highlight the extent states are obligated under the ECT to create a stable and predictable environment for investors.