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2012

The paper aims to review the recently adopted legislation on feed-in tariffs in Ukraine, focusing on its advantages and drawbacks, as well as on the related challenges. The recommendations listed in the paper will help to change the existing legislation regarding green electricity by means of eliminating its main drawbacks. The best prospects for renewable electricity production are related to the energy from the wind and the sun, nonetheless energy from the sun and biomass is used mostly for heating purposes, whereas the number of plans for the construction of wind farms and solar plants is growing tremendously. Despite policies and legislation being in place for the inclusion of electricity from renewables in the grid, technical and financial obstacles exist. There are plenty of plans to build new generating facilities, but at the same time there is absolutely no information about the construction of power backup. The existing regulatory policy regarding green electricity production and consumption still has significant potential for improvement. Compared to other measures, feed-in tariff implementation has spurred green electricity production in Ukraine, because feed-in tariff rates are high, and grid access is guaranteed by law, a major advantage of the current legislation on renewables in Ukraine.

This paper seeks to explain Ukraine's natural gas and electricity sector reforms, to outline the challenges facing these two sectors going forwards and to identify prospects for renewables. It makes three core arguments: First, the regulatory templates promoted by the European Union do not lend themselves to swift implementation. This is because the EU's approach has been supply-driven, in the sense that it exports regulatory templates already developed within the EU; it is not, therefore, a suitable problemsolving measure for a crisis-stricken country with limited capacities and powerful vested interests. Second, there has been very slow progress made in innovative and creative shifts in Ukrainian energy transition policy, showing a lack of commitment to the transformation and modernisation of energy systems that should in principle be based on the promotion of new business models backed up by reformed political, regulatory and industrial infrastructures. Third, Ukrainian elites have been formally open to the flow of rules as evidenced by a number of agreements concluded between the EU and Ukraine. But, in practice, the preexisting, deep-seated preferences of those elites have perpetuated the opaque gas trading system, resulting in them being very selective about the rules that they are actually prepared to adopt.

NaUKMA Research Papers. Law

Following its accession to the Energy Community Treaty and the conclusion of the association agreement with the EU, Ukraine implemented key EU acquis in energy by way of adoption of primary laws. They incorporate “instruments of EU legal integration,” i.e. provisions not required in the EU but included to ensure that the EU law is correctly transposed and applied in Ukraine. The Ukrainian Supreme Court in its recent jurisprudence made conclusions on legal aspects of their application, namely: on the place of EU case-law in the Ukrainian legal system, the value of opinions of the Energy Community Secretariat (ECS) as well as the obligation to conduct consultations with the European Commission and the ECS. While the acceptance of guidance from European institutions on application of EU acquis is commendable, there seems to be room for improvement in the way the Supreme Court applies principles of EU law, in particular related to the functioning of energy markets.

Studia Iuridica, 2017

The energy sector is a strategic industry of each state. Energy industry is one of the most important regulated fields at the EU level and a crucial direction of cooperation between the EU and Ukraine. EU legislation, primarily directives and regulations from the Third Energy Package, prescribe requirements in respect of the legal status of national regulatory authorities in the fields of energy and natural gas. Ukraine, as a full-fledged member of the Energy Community, as well as in line with the EU‒Ukraine Association Agreement, shall institute laws and regulations necessary for the implementation of those requirements. In particular, EU legislation stipulates requirements with regard to the independence of national regulatory authorities from other state authorities during the exercise of their regulatory powers. In recent years, Ukrainian public authorities have undertaken steps to develop and approve a legal framework in order to implement the requirements of EU energy legislat...

Hart Publishing eBooks, 2022

E3S Web of Conferences

The article describes the leading world trends and factors of state regulation of “green” energy development as a key element of energy safety of mankind at transition stage to globalized society. Paradigm change of energy safety of mankind, problems and obstacles on the way to abandon hydrocarbons use as the main energy sources and replace them by renewable environmentally friendly sources are analyzed. International and national normative legal documents regulating functioning and “green” energy development are characterized. Mechanisms for strengthening Ukraine’s energy safety by acceleration stimulating of construction of new generation power plants using exclusively renewable energy sources in our country were proposed.

Manchester Journal of International Economic Law, Vol. 12, No. 2, 2015, 2015

States have sought to promote renewable energy generation as a means of meeting international and regional climate change objectives. These very policy initiatives are coming under attack when they might conflict with a state's other international and regional obligations in the areas of international trade and foreign investment protection. Conflicts over how states can promote and incentivize renewable energy are increasingly brought before international courts and tribunals. The focus of this article is on the international disputes that have arisen out of feed-in tariff programmes being used for as a means for incentivizing photovoltaic solar electricity generation. The article examines the measures taken by states, the subsequent revocation or severe modification of such measures, how these policy shifts are dealt with by international courts and tribunals, and the implications of the cases for future initiatives to promote renewable energy.

AJIL Unbound

When states withdraw from bilateral investment treaties or denounce multilateral treaties related to foreign investment, a range of intersecting questions arise in domestic and international law. Recent developments have demonstrated potential incongruities between domestic and international approaches to investment protection, including as regards the effectiveness of withdrawal and the implications for existing investments. This essay reflects on international and domestic disputes involving the withdrawal of the Russian Federation from participation in the Energy Charter Treaty (ECT) to highlight these interactions. These issues have become particularly pertinent today because more than 1,500 international investment agreements (IIAs) are nearing expiry of their initial term, providing an opportunity for termination. Moreover, some states have begun to terminate or denounce investment treaties, while many more are engaging in a process of renegotiation and reform. The Russian cas...

Problems and Perspectives in Management

This paper elaborates on the theoretical and methodological fundamentals of a tradable green certificates system to foster renewable energy development in Ukraine. It proposes a management mechanism premised on the classical market model of tradable green certificates aiming at increasing the share of electricity from renewable energy sources in the country’s energy mix. Organizational stages of the mechanism formation at the national level and a methodological approach to assess green electricity generation cost are developed. The modeling has shown that the annual increase in the cap for green electricity consumption by 1% will raise the electricity tariff by 3%, which is not a significant financial burden for consumers. The proposed changes in the tradable green certificates system can be an effective management tool to achieve the required amount of electricity from renewable energy sources in the country’s total electricity consumption and to foster the development of the Ukrai...

International Environmental Agreements: Politics, Law and Economics

A stable and predictable legal environment is one of the basic factors considered in the investment process. It is of particular importance in the energy sector with its characteristically long-term investments which require substantial financial outlays. It has to be underlined that the nature of energy industry is rapidly changing both from the overall shape of the investment and regulatory models. One can observe that the model of the energy market that used to be based on state monopoly evolved into private or half private structure. However, of the particular importance is the fact that together with liberalisation and privatisation of the market the state becomes an active regulator of the market. It is especially noticeable in renewable energy sector in which governments by anticipating and incentivizing are creating conditions for new investments. Simultaneously, one cannot ignore that the state active regulatory policy may also bring a risk that support for certain investme...

Between 2013 and 2014, the Italian government introduced a number of legislative changes to the photovoltaic industry regulation in order to reduce the costs related to green energy incentives. These legislative changes impacted on the framework relied upon by international investors in making their investments in the Italian photovoltaic industry and generated great uncertainty about the regulation of the sector. Consequently, a number of foreign investors resorted to international arbitration arguing the violation of the standards of protection of foreign investments granted under the Energy Charter Treaty (‘ECT’), ratified by the Italian Republic on December 1997, and claiming damages against the Italian State. This paper aims to discuss the measures adopted by the Italian State in the energy sector in light of the ECT and to offer a view of the most relevant substantial and jurisdictional issues emerging in relation to its application as well as to analyze the consequences that the ongoing investment proceedings might bring about in terms of interaction between EU law and international law.

Sociálne vedy z perspektívy mladých vedeckých pracovníkov IV., 2020

As a consequence of rising environmental concerns, a substantial number of EU member states undertook various programs aimed at subsidizing the renewable energy sector and promoting related foreign (and domestic) investment. During the 2010s, several renewable energy programs were replaced by less favourable legal regimes. These changes led to foreign investors suing the relevant countries, through the controversial investor-state dispute settlement (ISDS) mechanism reserved solely for foreign investors. The costly nature of ISDS proceedings (such as legal fees and large arbitral awards) could cause a discouraging effect among member states considering similar renewable energy programs. This research thus aimed to examine whether such concerns have potential merit, whether the cases result in a downturn for renewable promotion in the EU. The method for doing so was through investigating two ISDS cases, followed by an analysis of the two affected countries' stance towards renewab...

Fìnansovo-kreditna dìâlʹnìstʹ: problemi teorìì̈ ta praktiki, 2024

This paper examines the financing of green energy initiatives as a critical element in strengthening Ukraine's energy security, especially in the context of postwar reconstruction and the need for sustainable and resilient energy infrastructure. The study aims to assess the potential and challenges of investing in green energy in Ukraine, considering the destruction caused by Russian military actions in the winter of 2022-2023, and the need for recovery based on sustainable models. In this regard, the obtained results emphasize the importance of creating a reliable and decarbonized energy sector, driven by both domestic needs and international cooperation with the EU and other partners. The analysis shows that despite strong support for the green energy transition, the development of the sector is hindered by the high capital intensity required for green technologies, which are often not competitive without government subsidies. This requires a careful balance between innovation and commercial viability of green energy projects, highlighting the need for public and private investments in technologies that can compete with traditional sources of energy in the long term and developing new financing tools for Ukraine. The conclusions indicate that a multifaceted approach is needed to ensure Ukraine's energy future and minimize risks. Such an approach should include policy reforms, strategic investments in proven green technologies, and fostering partnerships to bridge the commercialization gap. Policymakers face the dual challenge of accelerating the energy transition while managing financial constraints exacerbated by military spending, highlighting the trade-off between rapid development and the risks associated with financing innovation. Overall, this study contributes to the understanding of how green energy financing mechanisms can enhance Ukraine's energy security, suggesting broader implications for policy, investment, and technological innovation in the context of Ukraine's postwar recovery and future resilience.

2016

In the past decade, Spain’s generous incentive system for renewable energy production attracted substantial foreign and national investment. However, when the global financial crisis hit, and the consequent reduction of electricity consumption, the incentives began to cause a tariff deficit in the electricity system, leading the Spanish government to cut back and then eliminate the incentives. In the wake of losses, international investors turned to investment arbitration, while national investors could only present their claims before Spanish courts. The result was a potential for differential treatment between national and foreign investors. This paper examines the incentive regime and the government’s changes to it in order to understand the investors’ claims and the reasoning that resulted in their rejections, both in national courts and in the only arbitration award issued up to now. The paper concludes with a discussion of the effect of the renewable energies situation on the ...

Hungarian journal of legal studies, 2022

This paper discusses the issue of legitimate expectations in the arbitral practice of green energy cases under the Energy Charter Treaty. Before the economic crisis of 2008, several European countries provided special incentives and subsidies to investors in the field of renewable energy. However, following the crisis, some of them (e.g. Spain and Italy) abridged these benefits, which resulted in a number of arbitration proceedings under the Energy Charter Treaty. Some of these are still pending. Most of these disputes are centered on legitimate expectations, a major component of the fair and equitable treatment standard. The introductory part of the article gives a general overview of the issue of legitimate expectations in international investment law, and identifies the three types of situations which can generate legitimate expectations: specific commitments, unilateral representation or promises, and regulatory frameworks. The main part of the work analyses the most relevant green-energy cases of the Energy-Charter-Treaty-related arbitrations, with special emphasis on the issue of legitimate expectations. In the final part of the paper, conclusions are drawn based on the case law here presented, as well as other researched cases.

The article addresses how the obligation not to frustrate legitimate expectations has been interpreted and applied in recent investment disputes arising out of amendments in domestic regimes in the renewable energies sector. The analysis will address cases against Czechia, Italy and Spain, the Countries currently facing the majority of disputes for alleged breaches of the Energy Charter Treaty. Jurisdictional issues related to the case law at hand, such as those stemming from intra-EU arbitration, will not be addressed. The contribution is divided in three parts, next to the introduction. First, the notion of legitimate expectations will be analysed. Second, the Czech, Italian and Spanish cases will be addressed, briefly sketching the respective domestic legal frameworks. As a conclusion, it will be suggested that tribunals have considered the fact that a State is exercising its regulatory power, and a potential lack of investors' due diligence, in diminishing the quantum of compensation, and that such case law adds to the establishment of general "interpretative elements" of FET.

JOURNAL OF EUROPEAN ECONOMY, 2018

The prerequisites of public transport electrification and the need to reduce CO2 emissions in the transport sector are investigated. It has been established that electricity is a universal energy source that can help diversify primary energy sources for transport and increase energy security. Positive socio-economic effects from the use of electricity in the transport sector are identified. The competitive advantages of using electric transport in the system of public transportation are determined. Global experience of electrification of passenger transportation is analyzed. An important driving force for the creation and development of the market was government support, which was carried out by adopting relevant legislative norms and implementing various initiatives at both the national and regional levels. The development of the legislative framework for the support of environmentally friendly modes of transport in the world economy markets is divided into stages. The current stat...

Since the establishment of the official relations between the EC and the USSR, the Russian-European energy relations have largely evolved as a result of numerous changes regarding both partners: the Soviet Union disintegrated, allowing Russia to emerge as an international actor, and the EC gave birth to the EU. As to their energy interactions, e.g. natural gas supplies, over the last 30 years Russia has been a reliable supplier of gas to the European market. Lately, the relationship between these two trading partners has degraded. Recent legal developments demonstrate that in the energy investment and transit field both the EU and Russia tend to implement restrictive instruments and separate unfriendly actions. Furthermore, up-to-date rise in business activity, and consequently in business disputes, between Russian and foreign parties, on the one hand, and the latest energy crises, on the other hand, have further harmed this cooperation that should be based on a mutual reliance rather than the panic over loosing supplies or loosing markets. International law which is currently in force does not always adequately contribute to enhancing such mutual reliance. Namely, in terms of international law, the existing mechanisms, such as the EU-Russia Energy Dialogue and Partnership and Cooperation Agreement (PCA), are supposed to create the legal basis for EU-Russia energy cooperation. However, each of them has significant flaws with regards to both its binding force and the interests and objectives of both partners. In this context, the main binding instruments of international law that could generally apply to EU-Russia energy traderelated issues are the ECT and the GATT/WTO rules. So far, since October 2009 Russia is no longer a party to the ECT, and it is not yet a member of the WTO. Consequently, the biggest current practical problem to resolve in the context of this study is what are the best tangible alternatives to frame and enhance EU-Russia energy cooperation, especially with regards to investment and transit issues. Notably, the stakes for both partners should be taken into account, as well as some mutual concessions are needed to be done. While Russia is bound by the ECT until 2019 to investments made in its territory prior to 2009, and although Russia is expected to join WTO around 2012, this research aims to determine the best up-to-date options for regulating EU-Russia energy relations with strong focus on investment and transit. Also, the study highlights the potential shortcomings of the prospective legal framework, and proposes some drafting solutions to remedy those shortcomings.

Foreign investors in the energy sector have long sought to secure guarantees from the host state in order to reduce future risk. The international investment law regime has fundamentally altered the legal framework for investors and host states within the energy sector.This article explores the application of international investment law within the energy sector, describes some common categories of disputes that characterize the energy sector,identifies the main disciplines or standards in investment law, and discusses the remedies available to investors.