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15 May 2020
CMS Ex­pert Guide to re­new­able en­ergy law and reg­u­la­tion
You can down­load our ded­ic­ated "Re­new­ables guide" pdf from <link xlink:href="ez­loca­tion://575610" xlink:show="new">here</link>.<em­phas­is role="un­der­lined">In­tro</em­phas­is><em­phas­is role="un­der­lined">duc­tion </em­phas­is>This guide in­cludes con­tri­bu­tions from some of the most act­ive re­new­ables law­yers in the sec­tor across the globe. What it shows is that the re­new­ables in­dustry re­mains in a peri­od of ma­jor trans­ition. However, the trans­ition it­self has changed.Pre­vi­ously this trans­ition was seen as an on­go­ing meta­morph­os­is from be­ing an im­ma­ture, fast-de­vel­op­ing sec­tor to be­ing a more ma­ture and stable sec­tor. It was about gain­ing polit­ic­al and so­cial sup­port for de­cent­ral­ised tech­no­lo­gies that were seen as costly and un­re­li­able. It was about tech­no­lo­gies that were seen as hav­ing fringe im­pacts on the total ca­pa­city of most power sec­tors. It was also about primar­ily de­veloped eco­nom­ies cata­lys­ing, fund­ing and sup­port­ing a nas­cent in­dustry through sub­sidies.Even in the past two years the de­bate has drastic­ally changed. While the re­new­ables sec­tor re­mains in trans­ition, the con­ver­sa­tion is now about wheth­er coun­tries are de­vel­op­ing a suf­fi­ciently long and size­able pipeline of pro­jects to feed the al­most in­sa­ti­able de­sire of banks, in­vestors and de­velopers to de­ploy cap­it­al and debt in the sec­tor. Bloomberg ex­pects glob­al in­vest­ment in new re­new­able en­ergy ca­pa­city to reach a stag­ger­ing US$2.6 tril­lion by the end of this year. The trans­ition is less about fa­cil­it­at­ing the sec­tor and more about re­mov­ing the polit­ic­al and struc­tur­al bar­ri­ers to de­ploy­ment, such as cum­ber­some con­sent­ing pro­cesses or morator­ia on par­tic­u­lar tech­no­lo­gies. As re­new­ables rap­idly rise to be­come the most eco­nom­ic way to add new gen­er­a­tion ca­pa­city in many jur­is­dic­tions around the world, the trans­ition even be­comes a fo­cus for ex­ist­ing and planned thermal ca­pa­city op­er­at­ors, who may seek ad­di­tion­al com­fort that they will not be­come stran­ded as­sets in an in­creas­ingly de­car­bon­ised elec­tri­city sec­tor.With the price of re­new­ables be­ing now not only at, but at times, be­low grid par­ity (i.e. the whole­sale price of power) in many coun­tries, the ques­tion of wheth­er the whole­sale price of power re­mains rel­ev­ant for in­vest­ment de­cisions has ris­en up the agenda. Many elec­tri­city mar­kets are strug­gling to send a suf­fi­cient, stable and trans­par­ent price sig­nal to al­low prudent in­vest­ment de­cisions in the de­sired tech­no­lo­gies to be taken. Fur­ther, with the elec­tri­city sec­tor con­sidered the en­gine for driv­ing ‘net zero’ am­bi­tions in cur­rently non-de­car­bon­ised parts of the wider eco­nomy, such as trans­port and heat­ing, the trans­ition is not about wheth­er re­new­ables are fringe tech­no­lo­gies, but wheth­er the re­new­ables am­bi­tion is large enough to meet these ad­di­tion­al chal­lenges. With re­new­ables tar­gets hav­ing been ad­op­ted in 168 coun­tries as at the start of 2019, and de­ploy­ment in de­vel­op­ing eco­nom­ies hav­ing out­stripped that in de­veloped eco­nom­ies since 2015, the sec­tor is trans­ition­ing to be­com­ing a truly glob­al in­dustry. <em­phas­is role="un­der­lined">The Gl</em­phas­is><em­phas­is role="un­der­lined">obal Con­text</em­phas­is><em­phas­is role="un­der­lined">Par­is: Jusq</em­phas­is><em­phas­is role="un­der­lined">u'ici tout va bi­en?</em­phas­is>On 12 Decem­ber 2015, the lan­guage of the Par­is Agree­ment was ad­op­ted by con­sensus, re­quir­ing its sig­nat­or­ies to hold glob­al av­er­age tem­per­at­ures to well be­low 2°C above pre-in­dus­tri­al levels. The mes­sage of the Par­is Agree­ment was that it is the shared re­spons­ib­il­ity of the glob­al com­munity to mit­ig­ate the im­pact of cli­mate change, and those with the broad­est shoulders should take on the largest bur­den. The de­vel­op­ment of re­new­able sources of en­ergy re­mains cru­cial to achiev­ing that goal, and the po­ten­tial trans­form­at­ive im­pact of tech­no­logy was re­cor­ded in Art­icle 10 of the agree­ment.Gov­ern­ments across the globe have sub­sequently been re­view­ing and im­ple­ment­ing en­ergy strategies that bal­ance eco­nom­ic growth with sus­tain­able de­vel­op­ment. For ex­ample, Peru has been im­ple­ment­ing a series of policies that seek to achieve “clean growth by re­cog­nising the re­la­tion­ship between en­vir­on­ment­al re­quire­ments and the de­vel­op­ment of re­new­able en­ergy. The UAE’s En­ergy Plan 2050 aims to cut CO2 emis­sions by 70% and ex­pects an in­vest­ment of USD$ 160bn to achieve its goals. Even in Al­bania, where around 97% of do­mest­ic­ally gen­er­ated elec­tri­city comes from hy­dro­power, gov­ern­ment pro­grammes have been launched for in­vest­ment in new sol­ar and oth­er re­new­able pro­jects.Al­though the in­stalled ca­pa­city of re­new­able elec­tri­city has con­tin­ued to grow glob­ally, to around 2.4TW in 2018, sci­ent­ists re­port that there is still much work to be done and in par­tic­u­lar, United in Sci­ence re­cently re­por­ted that by their cal­cu­la­tions, com­mit­ments to cut green­house gas emis­sions must be at least tripled and in­creased by up to five­fold if the world is to meet the Par­is cli­mate change goals. Jusqu'ici tout va bi­en - so far, so good for Par­is. But lots more to do. <em­phas­is role="un­der­lined">China: Ri</em­phas­is><em­phas­is role="un­der­lined">se of the sleep­ing gi­ant</em­phas­is>China has be­come the world’s largest re­new­able en­ergy mar­ket, with an in­cred­ible 200GW of in­stalled wind ca­pa­city. While its in­vest­ment in coal pro­jects gets a lot of press at­ten­tion, China has been sig­ni­fic­antly cut­ting its coal de­pend­ence in re­cent years. In ad­di­tion, as has of­ten proven to be the case with de­vel­op­ing eco­nom­ies, China has been able to grasp the op­por­tun­it­ies of new tech­no­lo­gies more quickly than some oth­er coun­tries with long­stand­ing and older in­fra­struc­ture. When con­sidered hol­ist­ic­ally as the lead­ing pro­vider of equip­ment to the sec­tor, the value of the re­new­ables trans­form­a­tion is huge for China.Re­new­able en­ergy is also cent­ral to Chinese gov­ern­ment policy to help solve the chal­lenges of en­ergy se­cur­ity, cli­mate change and severe air and wa­ter pol­lu­tion. By the end of 2016, the total hy­dro­power ca­pa­city of the coun­try reached 330m kW, feed-in wind power ca­pa­city of 149m kW and gen­er­ated a total of 241bn kWh elec­tri­city, sol­ar thermal util­isa­tion area ex­ceeded 400m m2 and gen­er­ated more than 60bn kWh of elec­tric power. In the fu­ture, China has am­bi­tions to in­crease co­oper­a­tion with oth­er coun­tries on en­ergy tech­no­logy, equip­ment, en­gin­eer­ing ser­vices, and ca­pa­city de­vel­op­ment by en­cour­aging Chinese com­pan­ies to par­ti­cip­ate in for­eign elec­tri­city pro­jects. <em­phas­is role="un­der­lined">EU: More rul</em­phas­is><em­phas­is role="un­der­lined">es and pack­ages</em­phas­is>Hailed as a ma­jor step to­wards com­plet­ing the “En­ergy Uni­on”, in May 2019 the European Coun­cil form­ally ad­op­ted the re­main­ing ele­ments of the Clean En­ergy Pack­age (ori­gin­ally presen­ted by the European Com­mis­sion in 2016). At over 1,000 pages, the long, ram­bling, re­pet­it­ive and at times (even to law­yers) un­clear pro­vi­sions of the Clean En­ergy Pack­age rep­res­ent a new and sup­posedly com­pre­hens­ive policy frame­work to build on the en­ergy trans­ition and de­liv­er on the EU’s Par­is Agree­ment com­mit­ments.The pack­age is un­doubtedly pos­it­ive for the en­ergy trans­ition in its dir­ec­tion of travel for the European Uni­on.  It deals among oth­er things with:En­ergy ef­fi­ciency in­clud­ing fo­cus­ing on the en­ergy per­form­ance of build­ings.A high­er tar­get of 32% re­new­able en­ergy by 2030.A re­quire­ment for Na­tion­al En­ergy and Cli­mate Plans (NECPs) by each Mem­ber State for 2021-2030.Fa­cil­it­at­ing prosumers by mak­ing it easi­er for in­di­vidu­als to pro­duce, store or sell their own en­ergy.Rules to help in­teg­rate re­new­ables in­to the grid, im­prove se­cur­ity of sup­ply and im­prove cross-bor­der co-op­er­a­tion. <em­phas­is role="un­der­lined">Cli­mate Ac­tion </em­phas­is><em­phas­is role="un­der­lined">Sum­mit 2019, New York</em­phas­is>The New York sum­mit will prob­ably be best re­membered for Greta Thun­berg’s emo­tion­al ad­dress. She didn’t shy away from us­ing her glob­al high-pro­file plat­form to tell UN lead­ers dir­ectly, “We will nev­er for­give you”. Bey­ond the press and counter-re­ac­tion her ad­dress gen­er­ated, the fo­cus at the largest sum­mit since Par­is was on dra­mat­ic­ally re­du­cing emis­sions to reach net zero.  More than 60 coun­tries made cli­mate pledges to cut emis­sions to net zero by 2050 – but, as was noted, not the biggest emit­ters, such as the US, In­dia or China.Key oth­er mes­sages from the sum­mit in­cluded mo­bil­ising pub­lic and private sources of fin­ance to drive de­car­bon­isa­tion of all pri­or­ity sec­tors, ad­van­cing en­ergy re­si­li­ence, ac­cel­er­at­ing the shift away from fossil fuels and to­wards re­new­able en­ergy, as well as mak­ing sig­ni­fic­ant gains in en­ergy ef­fi­ciency and trans­form­ing in­dus­tries such as oil and gas, chem­ic­als and in­form­a­tion tech­no­logy. <em­phas­is role="un­der­lined">Gov­ern­ment policies</em­phas­is><em­phas­is role="un­der­lined"> fa­cil­it­at­ing re­new­ables</em­phas­is>With re­new­able en­ergy be­com­ing in­creas­ingly cost-com­pet­it­ive and a key driver of de­car­bon­isa­tion, many coun­tries are tak­ing on new com­mit­ments to de­liv­er sus­tained re­new­able policies and tar­gets. This polit­ic­al de­bate is hap­pen­ing against the back­drop of con­tin­ued in­creases in over­all en­ergy de­mand in large parts of the world. En­ergy de­mand in Brazil, for ex­ample, is ex­pec­ted to grow at an av­er­age an­nu­al rate of 2.2% un­til 2040, as com­pared to just 1.2% glob­ally. The dis­rupt­ive power of re­new­ables has been sig­ni­fic­antly en­hanced by fall­ing life-cycle costs. There has been dra­mat­ic drops in the cost of equip­ment and in the sup­ply chain, sus­tained low in­terest rates from lend­ing banks have fa­cil­it­ated eco­nom­ic pro­ject fin­an­cing struc­tures, and the huge in­terest from pen­sion and in­fra­struc­ture funds has brought low cost of cap­it­al in­to the sec­tor. Gov­ern­ments are, among oth­er things, con­sid­er­ing how such value can be shared with elec­tri­city cus­tom­ers.Policy com­mit­ments and de­vel­op­ments con­tin­ue to be an­nounced on a reg­u­lar basis. In Ser­bia, des­pite a long-delayed start, the re­new­able en­ergy mar­ket is un­der­go­ing sig­ni­fic­ant de­vel­op­ment and in­vest­ment. In Hun­gary, re­new­able gen­er­a­tion is still a grow­ing sec­tor with de­velopers re­cently look­ing to oth­er tech­no­lo­gies, be­sides bio­mass, such as sol­ar and geo­therm­al to fur­ther re­new­able gen­er­a­tion de­ploy­ment. Fol­low­ing the pres­id­en­tial elec­tions in Mex­ico, which saw sig­ni­fic­ant un­cer­tainty over the re­new­ables long term auc­tions that were planned and con­cluded, the new ad­min­is­tra­tion high­lighted strength­en­ing the En­ergy Reg­u­lat­ory Com­mis­sion as a key pri­or­ity. The Aus­tri­an gov­ern­ment has also ad­op­ted a cli­mate and en­ergy plan mis­sion 2030 to in­crease its over­all share of re­new­ables to an im­press­ive 45-50% by 2030. <em­phas­is role="un­der­lined">Gov­ern­ment policies hind</em­phas­is><em­phas­is role="un­der­lined">ering re­new­ables</em­phas­is>The story is not uni­formly pos­it­ive for the sec­tor, of course. For ex­ample, the UK gov­ern­ment in­tro­duced policy changes (such as to the con­sent­ing re­gime) which the in­dustry con­tends give an ef­fect­ive “loc­al com­munity veto” against new on­shore wind farms. En­vir­on­ment­al chal­lenges also ramp up de­pend­ing on the tech­no­logy. With in­creas­ing con­cen­tra­tions of, for in­stance, wind pro­jects in par­tic­u­lar areas, the cu­mu­lat­ive im­pacts on loc­al fauna will be­come great­er chal­lenges to de­vel­op­ments. In Croa­tia for ex­ample, most of its hy­dro­power po­ten­tial could be chal­lenged by po­ten­tially ad­verse biod­iversity im­pacts, since al­most all Croa­tian rivers are planned for in­clu­sion in the EU’s Natura 2000 sys­tem of pro­tec­ted hab­it­ats. Fi­nally, the lack of policy frame­works is also an is­sue in many coun­tries. In Ro­mania, the le­gis­lat­ive frame­work has not evolved quick enough to keep pace with the ac­cel­er­ated trans­ition to re­new­able en­ergy, caus­ing pro­jects and in­vestors to stall due to the un­cer­tainty. <em­phas­is role="un­der­lined">Bank­able Reve</em­phas­is><em­phas­is role="un­der­lined">nue Streams</em­phas­is><em­phas­is role="un­der­lined">Sub­sidies – sw</em­phas­is><em­phas­is role="un­der­lined">ay­ing in the wind</em­phas­is>Al­though the de­mise of sub­sidies for the re­new­ables sec­tor has been an­ti­cip­ated many times, sub­sidy schemes have not en­tirely gone away. To some ex­tent per­haps they can­not en­tirely fall away un­til a fix is found for the in­her­ent (and per­haps in­creas­ing) volat­il­ity in whole­sale power prices across the world.Also, with re­spect to re­duc­tions in sub­sidies, what works in one corner of the globe with one re­new­ables tech­no­logy has not made that solu­tion auto­mat­ic­ally uni­ver­sal. Sub­sidies have re­mained rel­ev­ant to kick­start sec­tors in coun­tries that have per­haps been slower off the mark. Yet, most sub­sidy re­gimes have moved away from feed in tar­iff struc­tures and in fa­vour of re­gimes like the auc­tion­ing of sites with baked-in PPAs or UK-style mod­el of of­fer­ing com­pet­it­ively priced con­tracts for dif­fer­ences.Au­thors of this guide found plenty of ex­amples to demon­strate the vari­ety of sub­sidy struc­tures. In Ro­mania the gov­ern­ment is con­sult­ing on a new CFD scheme based on the UK mod­el. In Slov­e­nia sub­sidies and co-fin­an­cing mech­an­isms with a fo­cus on sol­ar were an­nounced to cata­lyse fur­ther in­vest­ment in re­new­ables. Sim­il­arly, in Switzer­land, sub­sidy schemes have been an­nounced to aid with the con­struc­tion and pro­duc­tion costs of sol­ar and wind en­ergy. From a more mar­ket driv­en per­spect­ive, coun­tries are con­sid­er­ing mech­an­isms such as mar­ket plat­forms and quotes. Ex­amples of this in­clude the An­golan gov­ern­ment con­sid­er­ing sub­sid­ised tar­iffs for re­new­able pro­jects by 2025 and the con­sulta­tion by the Itali­an gov­ern­ment on the cre­ation of a mar­ket plat­form as an al­tern­at­ive to the cur­rent in­cent­ive scheme, On the same theme, in Ukraine, there has been a switch from tar­iffs to an auc­tion quota sys­tem for sol­ar and wind tech­no­lo­gies.Yet, sub­sidies are dis­tor­tions in com­pet­it­ive whole­sale mar­kets. And so there are also moves in the oth­er dir­ec­tion. For ex­ample, the Egyp­tian gov­ern­ment star­ted a scheme to gradu­ally lib­er­al­ise elec­tri­city prices and achieve the full re­mov­al of elec­tri­city sub­sidies by 2022. <em­phas­is role="un­der­lined">Oth­er in­cent­ives for re­newa</em­phas­is><em­phas­is role="un­der­lined">bles</em­phas­is>Taxes con­tin­ue to be an al­tern­at­ive way to en­cour­age green in­vest­ment. For ex­ample, in Colom­bia, in­di­vidu­als and en­tit­ies sub­ject to in­come tax who in­vest in the in­vest­ig­a­tion, de­vel­op­ment, pro­duc­tion and con­sump­tion of re­new­able en­ergy are eli­gible for an­nu­al in­come tax re­duc­tion up to 50% of the total in­vest­ment value with­in the next 5 fisc­al years after the in­vest­ment is made. A sim­il­ar ar­range­ment is in place in Mo­rocco via the In­vest­ment Charter 1995 (due to be re­newed soon) whereby any new in­dus­tri­al busi­ness in the re­new­ables sec­tor can be en­titled to a total ex­emp­tion from cor­por­ate tax. Moreover, Lux­em­bourg’s in­come tax law provides for a spe­cial de­pre­ci­ation meth­od to en­cour­age in­vest­ments in as­sets con­trib­ut­ing to en­ergy ef­fi­ciency in build­ings, some ex­emp­tions from in­come tax (e.g. for the sale of elec­tri­city gen­er­ated from PV sources) or tax de­duc­tion (e.g. for bio­fuel). Wider still, the 45Q tax cred­it re­gime in the US has been in­stru­ment­al in in­creas­ing de­ploy­ment of car­bon cap­ture us­age and stor­age (CCUS) pro­jects. <em­phas­is role="un­der­lined">White Knights?</em­phas­is><em­phas­is role="un­der­lined">: Dir­ect pur­chase by cor­por­ates </em­phas­is>In the world post steady sub­sidies, cor­por­ate PPAs are an at­tract­ive route to mar­ket as agree­ments can provide de­velopers with longer term fin­an­cial cer­tainty and busi­nesses with “green kudos”. Cor­por­ate PPAs are not as well es­tab­lished in the European mar­ket com­pared to the US and UK. However, there is grow­ing in­terest in the cor­por­ate PPA route as an al­tern­at­ive way to se­cure fin­an­cing for on­shore pro­jects in Po­land and con­tin­ued de­vel­op­ment of cor­por­ate PPA seg­ment in Spain and oth­er jur­is­dic­tions.Ad­di­tion­ally, des­pite pre­vi­ous dif­fi­culties in the mod­el, we may see com­munity fund­ing re-emerge as a sig­ni­fic­ant op­tion. For ex­ample, crowd­fund­ing of en­ergy pro­jects is de­vel­op­ing in France. The loc­al di­men­sion – with the fin­an­cing com­munity be­ing the loc­al com­munity and the be­ne­fi­ciar­ies be­ing loc­al cit­izens, small com­pan­ies, and mu­ni­cip­al­it­ies – can also help with oth­er loc­al con­sent­ing and op­pos­i­tion is­sues to pro­jects. <em­phas­is role="un­der­lined">Fall­ing costs </em­phas­is><em­phas­is role="un­der­lined">but fall­ing prices too</em­phas­is>The In­ter­na­tion­al Re­new­able En­ergy Agency (IRENA) has re­cently stated that on­shore wind and sol­ar PV are set by 2020 to con­sist­ently of­fer a less ex­pens­ive source of new elec­tri­city than the least-cost fossil-fuel al­tern­at­ive without fin­an­cial as­sist­ance. The glob­al weighted av­er­age cost of elec­tri­city gen­er­ated by con­cen­trated sol­ar power fell by 26% last year from a year earli­er, data com­piled by the agency showed. Bioen­ergy fell by 14%, sol­ar PV and on­shore wind by 13%, hy­dro­power by 12% and geo­therm­al and off­shore wind by 1%. Along­side the fall in up­front cap­it­al costs, oth­er costs are also fall­ing. For ex­ample, the costs of equity, of debt and of op­er­a­tion and main­ten­ance have all fallen con­sid­er­ably over the past few years. <em­phas­is role="un­der­lined">To­mor­row’s w</em­phas­is><em­phas­is role="un­der­lined">or­ld: Peer­ing over the ho­ri­zon</em­phas­is> <em­phas­is role="un­der­lined">Even mor</em­phas­is><em­phas­is role="un­der­lined">e new play­ers in the sec­tor</em­phas­is>As the re­new­ables mar­ket ma­tures, we are see­ing the strat­i­fic­a­tion of the sec­tor. Sub­sect­ors are emer­ging with their own lan­guage, con­tract forms, reg­u­lat­ory frame­work, sup­ply chains, in­vestors and de­velopers. In ad­di­tion, the geo­graph­ic­al ex­pan­sion of the sec­tor in­tro­duces new play­ers ex­plor­ing es­tab­lished mar­kets in which activ­ity is still in­creas­ing, while at the same time pulling in ex­per­i­enced in­ter­na­tion­al play­ers in­to pro­jects in less es­tab­lished mar­kets. Fur­ther, there is also a strat­i­fic­a­tion of play­ers in in­di­vidu­al pro­jects over the pro­ject li­fe­cycle.There are some com­pan­ies that like to be in­volved in pro­jects from cradle to grave. However, with in­creas­ing pres­sure on achiev­ing rates of re­turn in in­creas­ingly com­pet­it­ive mar­kets, we are see­ing more M&A activ­ity. Stra­tegic play­ers con­tin­ue to source pro­jects but lean strategists may han­dover to de­velopers with lar­ger bal­ance sheets to de­vel­op the pro­jects, who in turn will look to en­hance rates of re­turn by selling down at a premi­um to their de­vel­op­ment cap­it­al at key stages in the pro­ject. Banks and in­sti­tu­tion­al in­vestors are also of­ten happy for such strategists to exit the pro­ject at the op­er­a­tion­al stage while main­tain­ing the O&M role with such as­sets then be­ing col­lec­ted to­geth­er in mixed port­fo­li­os that meet the in­vest­ment re­quire­ment of funds or so-called ‘funds of funds’. <em­phas­is role="un­der­lined">Chal­len­gin</em­phas­is><em­phas­is role="un­der­lined">g the new in­cum­bents</em­phas­is>Wind and sol­ar are the most com­mon re­new­able tech­no­lo­gies de­ployed and cent­ral to most gov­ern­ments’ re­new­ables policies. These days, we hear less about tid­al, wave, tid­al la­goons and oth­er tech­no­lo­gies that were once much lauded as po­ten­tial corner­stone tech­no­lo­gies. While, they re­main part of the over­all pic­ture, de­velopers of oth­er tech­no­lo­gies com­plain that they are get­ting too little fo­cus giv­en the dom­in­ance of wind and sol­ar.For ex­ample, in Por­tugal and Rus­sia, the up­take of re­new­able en­ergy policy is fo­cussed largely on ac­cel­er­at­ing the wind and sol­ar in­dus­tries. Off­shore wind de­vel­op­ment con­tin­ues to be a prin­cip­al driver of an­ti­cip­ated ca­pa­city in­creases in its key mar­kets, namely the UK, Den­mark, Ger­many and Bel­gi­um.There is still lots of un­tapped po­ten­tial and op­por­tun­it­ies for de­vel­op­ment in spe­cif­ic re­gions such as wind on the Per­uvi­an coast and in Brazil and Ser­bia, sol­ar in Croa­tia and Tur­key and smal­ler rooftop sol­ar in the Czech Re­pub­lic, bio­mass in Ukraine and Slov­akia and hy­dro­power in Colom­bia and Al­bania.With in­creas­ing cost pres­sures and the need to in­nov­ate, we may see more cre­ativ­ity in the sec­tor and also see an up­surge in in­terest in mixed-tech­no­logy de­vel­op­ments. For ex­ample, in Oman, Ja­pan’s JGC Cor­por­a­tion, the win­ning bid­der of Shar­qiyah IWP, pro­posed the use of a cap­tive sol­ar PV plant to re­duce the elec­tri­city con­sump­tion re­quired from Oman’s grid. Ørsted has also com­menced a UK fun­ded “gigastack” pro­ject in Den­mark to com­mer­cial­ise hy­dro­gen pro­duc­tion from off­shore wind to help deal with the in­creas­ing is­sue of sys­tem flex­ib­il­ity as off­shore wind ca­pa­cit­ies in­crease. <em­phas­is role="un­der­lined">CCUS: movi</em­phas­is><em­phas­is role="un­der­lined">ng for­ward at a geo­lo­gic­al pace</em­phas­is>De­scribed by the UK Gov­ern­ment’s Com­mit­tee on Cli­mate Change as a “ne­ces­sity not an op­tion” CCUS is seen as es­sen­tial in meet­ing net zero tar­gets glob­ally. CCUS is also seen as a key to un­lock­ing the po­ten­tial de­car­bon­isa­tion of the in­dus­tri­al and heat sec­tors by de­vel­op­ing a hy­dro­gen eco­nomy. In coun­tries such as Ger­many and the UK which are heav­ily re­li­ant on nat­ur­al gas for heat­ing, hy­dro­gen is seen as a clean al­tern­at­ive fuel and, if done via meth­ane re­form­a­tion, a part­ner for the CCUS sec­tor.The scale of the chal­lenge to de­vel­op CCUS pro­jects at scale and quickly is high­lighted by the fore­casts. To achieve net zero, around 10,000 CCUS pro­jects would be re­quired by 2070. Many coun­tries such as the UK, China, France, Ger­many and Saudi Ar­a­bia ac­know­ledge an es­sen­tial role for CCUS in their cli­mate tar­get strategies. It is re­quired to speed the de­car­bon­isa­tion of in­dustry, for gen­er­a­tion of low car­bon elec­tri­city and for de­vel­op­ment of new tech­no­lo­gies such as bioen­ergy, neg­at­ive emis­sion tech­no­lo­gies and ‘dir­ect air’ car­bon cap­ture. And yet the tech­no­logy has cur­rently only been de­ployed on a large scale in North Amer­ica, as an ad­junct to ex­ist­ing in­dus­tries such as tar sands de­vel­op­ments. In light of the vast po­ten­tial CCUS has to of­fer, the UK gov­ern­ment has set a tar­get of up to 40GW of new low-car­bon base­load com­pris­ing new nuc­le­ar and power sta­tions fit­ted with CCUS and has been de­vel­op­ing new busi­ness mod­els for de­vel­op­ing CCUS pro­jects across the UK. With po­ten­tial grow­ing to trans­port CO2 across bor­ders, the com­mer­cial bar­ri­ers for CCUS may soon be a thing of the past. <em­phas­is role="un­der­lined">The hy­dro</em­phas­is><em­phas­is role="un­der­lined">gen son­ata</em­phas­is>My daugh­ter loves to tell me the joke: “Why can you nev­er trust atoms?” The an­swer: “Be­cause they make up prac­tic­ally everything”. The joke could be true of hy­dro­gen, which makes up ap­prox­im­ately 75% of all mass in the uni­verse and burns clean and car­bon free to pro­duce only wa­ter as a byproduct (if pro­duced by elec­tro­lys­is). Hy­dro­gen should be a dream solu­tion for achiev­ing a de­car­bon­ised en­ergy sec­tor.  Yet des­pite its ubi­quity, it re­mains elu­sive.Many gov­ern­ments and com­pan­ies world­wide are ex­plor­ing the po­ten­tial hy­dro­gen can of­fer to the en­ergy trans­ition. The Hy­dro­gen Coun­cil iden­ti­fies mul­tiple sec­tors which hy­dro­gen can help to sig­ni­fic­antly de­car­bon­ise, such as: trans­port, heat­ing, re­new­able in­teg­ra­tion and en­ergy dis­tri­bu­tion. Moreover, it en­vis­ages that when de­ployed at scale, hy­dro­gen could ac­count for al­most one-fifth of total fi­nal en­ergy con­sumed by 2050 which would re­duce an­nu­al CO2 emis­sions by roughly 6 gigatons com­pared to today’s levels. The Neth­er­lands has seen ample in­vest­ment in­to hy­dro­gen re­search ini­ti­at­ives, such as ‘Hystock’, which looks at the pro­duc­tion of hy­dro­gen gen­er­ated with sol­ar en­ergy through elec­tro­lys­is. <em­phas­is role="un­der­lined">The elec­tric vehic</em­phas­is><em­phas­is role="un­der­lined">le jug­ger­naut</em­phas­is>Ac­cord­ing to Bloomberg New En­ergy Fin­ance, by 2040 more than half of all new cars world­wide will be elec­tric. Evid­ently, the elec­tri­fic­a­tion of trans­port is pivotal to meet­ing net zero. China’s fo­cus on im­prov­ing air qual­ity and re­du­cing oil im­ports makes it the world’s largest mar­ket for elec­tric vehicles. However, the in­dustry is not without its speed bumps – whilst sales of elec­tric vehicles grew by around 90% in Q1 2019, this was half the level of growth wit­nessed between 2017 and 2018, partly due to is­sues around vehicle choice and wait­ing times.Many coun­tries are yet to de­liv­er the level of char­ging in­fra­struc­ture re­quired to in­crease con­sumer con­fid­ence and there­fore up­take. But, some jur­is­dic­tions, such as, Slov­e­nia, re­port suf­fi­cient char­ging in­fra­struc­ture for elec­tric vehicles giv­en the level of re­gis­tra­tions. Bul­garia is ex­pec­ted to draw up le­gis­la­tion that will in­clude ob­lig­a­tions for elec­tri­city dis­tri­bu­tion com­pan­ies to de­vel­op char­ging sta­tions for elec­tric cars. Moreover, many jur­is­dic­tions are grap­pling with the ad­di­tion­al elec­tri­city ca­pa­city and in­creased net­work util­isa­tion chal­lenges that the fur­ther pen­et­ra­tion of EVs may present. Des­pite these short-term is­sues, the long-term out­look for elec­tric vehicles is pos­it­ive and is largely en­cour­aged by tech­no­lo­gic­al ad­vances to cut costs and the in­tro­duc­tion of fa­vour­able gov­ern­ment policies that con­tin­ue to drive the elec­tri­fic­a­tion of trans­port world­wide. For ex­ample, the Chilean gov­ern­ment re­cently entered in­to an agree­ment with man­u­fac­turer Al­ber­marle Corp to grant ac­cess to cheap­er lith­i­um re­sources to en­cour­age EV bat­tery man­u­fac­tur­ing in Chile.The de­vel­op­ment in EV tech­no­logy is en­cour­aging re­search in vehicle to grid / build­ing (V2G/X) tech­no­logy which it is ex­pec­ted will both change the way in which in­di­vidu­als and busi­nesses con­sume elec­tri­city and un­lock the po­ten­tial of V2G/X to ease the sig­ni­fic­ant pres­sures on loc­al grid sys­tems, as well as con­tin­ue the so­ci­et­al shift in how con­sumers re­spond to great­er demo­crat­isa­tion of en­ergy con­sump­tion and di­git­isa­tion of the sec­tor. Con­clu­sionThe pace of the re­new­ables trans­ition ap­pears to be speed­ing up rather than slow­ing down. Spurred on by grass­roots de­mand, typ­i­fied by those like Greta Thun­berg, and gov­ern­ment goals like ‘net-zero’, there are new pro­jects, products and ways of think­ing that are chan­ging the way many in the world re­gard re­new­ables and their place in the fu­ture of the plan­et. Our re­new­ables ex­perts, each ex­pert in their par­tic­u­lar mar­kets, are con­tinu­ing to ad­vise on and guide this glob­al trans­ition.This guide, by its nature, provides a high-level over­view on the sec­tor in the covered jur­is­dic­tions. Our con­trib­ut­ors re­main at your dis­pos­al and would be de­lighted to dis­cuss more spe­cif­ic de­tails and de­vel­op­ments.
Mai 2020
Block­chains in der En­er­giewirtschaft
Block­chains und an­dere so­genan­nte Dis­trib­uted-Ledger-Tech­no­lo­gi­en (DLT) bi­eten eine völ­lig neue Art der Daten­ver­arbei­tung. Durch den Ver­zicht auf den In­ter­mediär und durch die dezen­t­rale Speicher­ung von Daten führen sol­che Tech­no­lo­gi­en zu mehr Ver­trauen, Re­si­li­enz, Ver­füg­barkeit und In­teg­rität der Daten. Auch die En­er­giebranche be­fasst sich im­mer in­tens­iver mit dem Thema. So­wohl Start-ups als auch etablierte Un­terneh­men aus dem En­er­giesek­t­or haben das Po­ten­tial erkan­nt, er­proben neue Geschäfts­mod­elle und über­den­ken be­stehende Prozesse. Dabei lie­gen die Chan­cen ins­beson­dere in der Op­ti­mier­ung von Prozessen und der Or­gan­isa­tion von Platt­for­men, beis­piels­weise bei der Ein­bindung zahlreich­er dezen­t­raler Erzeu­gung­san­la­gen wie Wind-, Sol­ar- und Bio­gas­anla­gen oder als Lösung für öf­fent­liche Lade- und Ab­rech­nung­stran­sak­tion­en für Elektro­fahrzeuge.Recht­liche Heraus­for­der­ungenDie Block­chain-Tech­no­lo­gie mit ihr­er völ­lig neuen Art der Kom­munika­tion und Daten­ver­arbei­tung stellt auch das Recht vor neue Heraus­for­der­ungen. Wenn auf ein­en zen­t­ralen In­ter­mediär ver­zichtet wird, muss die Gov­ernance-Struk­tur in einem Un­ternehmenskon­sor­ti­um völ­lig neu gedacht wer­den. Die per­man­ente und teils öf­fent­liche Speicher­ung von Daten bringt dabei ins­beson­dere datens­chutzrecht­liche Im­p­lika­tion­en mit sich. Daneben spielen in stark reg­ulier­ten Märk­ten wie dem En­er­giesek­t­or zusätz­lich auf­sicht­s­recht­liche The­men eine es­sen­ti­elle Rolle, ebenso wie dam­it ver­bundene steuer­recht­liche As­pekte. Um für Block­chain-Pro­jekte in­di­vidu­elle wie auch recht­lich trag­fähige Lösun­gen en­twick­eln zu können, muss man neben den recht­lichen Im­p­lika­tion­en auch die Tech­no­lo­gie in Gän­ze ver­stehen.Un­sere Er­fahrungCMS bi­etet Ihnen Schnitt­s­tel­len­kom­pet­enz aus jur­istischem Know-how, Tech­no­lo­giev­er­ständ­nis und Mark­tken­nt­nis. Wir ver­fü­gen über ein Team aus er­fahren­en Spezi­al­isten im En­er­gie- und IT-Recht, das bereits in zahlreichen Block­chain-Pro­jek­ten in der En­er­giewirtschaft be­raten hat. Auf­grund un­ser­er in­ter­na­tionalen CMS-Block­chain-Ini­ti­at­ive können wir Sie auch bei gren­züber­s­chreit­enden Pro­jek­ten op­tim­al be­raten.Zu un­ser­en Er­fahrungen zählt zum Beis­piel die um­fassende Be­r­a­tung eines in­ter­na­tionalen Kon­sor­ti­ums aus En­er­giehänd­lern bei der Im­ple­men­tier­ung und Ver­trags­ver­hand­lung eines Block­chain-basier­ten Sys­tems zum En­er­giehan­del. Wir beg­leiten zu­dem den Ein­satz von Smart Meter Gate­ways mit Block­chains und ver­han­deln re­gel­mäßig Ver­träge mit Block­chain-Bezü­gen. Viele Un­terneh­men haben wir dabei be­raten, Tokens im Rah­men eines Ini­tial Coin Of­fer­ings oder eines Se­cur­ity Token Of­fer­ings zu emit­tier­en.Gerne stehen wir auch Ihnen bei Ihr­em Block­chain-Pro­jekt be­ratend zur Seite!
En­ergy for your suc­cess
For many sec­tors world­wide, smart man­age­ment of en­ergy and raw ma­ter­i­als is a factor which drives in­nov­a­tion and growth. Mar­ket play­ers are faced with polit­ic­ally mo­tiv­ated meas­ures and reg­u­lat­ory re­quire­ments as well as geo­pol­it­ic­al risks and new tech­no­lo­gies.Our En­ergy team com­bines com­pre­hens­ive know-how in all rel­ev­ant leg­al areas with pro­found in­dustry know­ledge. This en­ables us to provide our cli­ents with proven ex­pert­ise across the en­tire spec­trum of the en­ergy sec­tor. We are fa­mil­i­ar with the spe­cif­ic chal­lenges, wheth­er in ex­plor­a­tion and pro­duc­tion, pro­cure­ment or the trans­port and dis­tri­bu­tion of en­ergy. Fur­ther­more, CMS was one of the very first law firms to en­gage with the emer­ging fields of smart en­ergy and eMo­bil­ity and has ad­vised some of the lead­ing play­ers on pi­lot pro­jects and new busi­ness mod­els.We li­aise closely with our cli­ents to cre­ate in­nov­at­ive leg­al products, handle in­vest­ments, op­tim­ise struc­tures from a tax per­spect­ive, man­age risks and re­solve con­flicts. Our prag­mat­ic and cost-ef­fect­ive ad­vice has earned us a repu­ta­tion as a pi­on­eer in en­ergy law...


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29 July 2020
Hot Top­ics for the En­ergy Trans­ition
08 July 2020
CMS Ex­pert Guide to cli­mate change tax re­forms and in­cent­ives
28 July 2020
En­ergy Reg­u­la­tion - RE­MIT: Fur­ther clar­ity on what con­sti­tutes in­side in­form­a­tion
In re­cent months the Agency for the Co­oper­a­tion of En­ergy Reg­u­lat­ors (“ACER”), the EU agency which over­sees the Reg­u­la­tion on Whole­sale En­ergy Mar­ket In­teg­rity and Trans­par­ency (“RE­MIT”), has...
CMS ad­vises En­cav­is on sign­ing long-term PPA with Amazon and on fin­an­cing...
An in­ter­na­tion­al CMS team headed by lead part­ners Nik­las Gans­sauge and Marc Riede ad­vised En­cav­is AG on all as­pects of the PPA and pro­ject fin­ance. CMS pre­vi­ously ad­vised on En­cav­is’ ac­quis­i­tion of the pro­ject com­pany...
27 May 2020
CMS Ex­pert Guide to con­sequen­tial loss in the en­ergy sec­tor
Are you look­ing for in­form­a­tion on con­sequen­tial loss in the en­ergy sec­tor? This CMS Ex­pert Guide provides you with everything you need to know.
13 July 2020
De­vel­op­ing a European Hy­dro­gen Eco­nomy – a Roadmap
On the 8th Ju­ly 2020 the European Com­mis­sion (the “Com­mis­sion”) pub­lished their much awaited Hy­dro­gen Strategy for a Cli­mate-Neut­ral Europe (the “Strategy”). Fol­low­ing on the heels of a num­ber...
April 2020
CMS En­ergy Glob­al Bro­chure
15 May 2020
CMS Ex­pert Guide to re­new­able en­ergy law and reg­u­la­tion
Are you look­ing for in­form­a­tion on re­new­able en­ergy law and reg­u­la­tion? This CMS Ex­pert Guide provides you with everything you need to know.
02 July 2020
ICAO agrees to ad­just COR­SIA baseline for CO2 emis­sions for avi­ation in...
On 30 June 2020, the Coun­cil of the In­ter­na­tion­al Civil Avi­ation Or­gan­iz­a­tion (ICAO) ad­op­ted a de­cision ad­just­ing the peri­od to be used as the baseline for meas­ur­ing the growth of CO2 emis­sions un­der...
En­ergy for your suc­cess
For many sec­tors world­wide, smart man­age­ment of en­ergy and raw ma­ter­i­als is a factor which drives in­nov­a­tion and growth. Mar­ket play­ers are faced with polit­ic­ally mo­tiv­ated meas­ures and reg­u­lat­ory re­quire­ments as well as geo­pol­it­ic­al risks and new
02 August 2018
CMS Ex­pert Guide to elec­tric vehicle reg­u­la­tion and law
Are you look­ing for in­form­a­tion on elec­tric vehicle reg­u­la­tion and law? This CMS Ex­pert Guide provides you with everything you need to know.
11 June 2020
EU ad­justs COR­SIA baseline for CO2 emis­sions for avi­ation to 2019 only...
On 9th June 2020 the Coun­cil of the EU (the “Coun­cil”)ad­op­ted a de­cision to amend its po­s­i­tion on the peri­od to be used as the baseline for meas­ur­ing the growth of CO2 emis­sions un­der the Car­bon Off­set­ting...