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South Africa

As a sponsor, lender or public sector organisation, you require legal advisers who can help you successfully handle complex energy infrastructure transactions and the financing of energy infrastructure. Whether you are in the public sector or private sector and whether you are in the electricity generation, mining, transport, health, education, waste, defense, IT/telecoms, leisure, custodial and justice, ports, rail, roads or water industries, you will get the legal advice you need from us on your energy solutions.

As Sub-Saharan Africa economies grow at greater rates of growth than most other regions, and as the growth is for the most part off a low base with little energy infrastructure, Sub-Saharan Africa is in a perfect position to embrace energy solutions which minimize its contribution to climate change.

We work in multi-disciplinary teams working closely with CMS lawyers in the rest of Africa, the United Kingdom, Western, Central and Eastern Europe, Latin America, the Middle East and Asia. This enables us to provide our clients with proven expertise across the entire spectrum of the energy sector and to enable you to take advantage of the opportunities for energy solutions for Sub-Saharan Africa to catalyse further economic growth in the region and to meet its growing energy needs whilst minimizing the region’s contribution to climate change.

Our offering 

As we are part of CMS’ international Energy team we are able access extensive expertise and it allows for cross-border collaboration in all areas of the energy and climate change sector, including the following:

  • energy law and regulation
  • energy storage
  • energy trading & energy contracts
  • mergers and acquisitions, sales of business, sales of shares and the like
  • mining law
  • power purchase agreements
  • procurement law
  • public - private partnerships
  • renewable energy projects
  • service level agreements, construction and operation and interface agreements, management services agreements, sponsor support agreements, shareholder agreements, consortium and joint venture, agreements, feedstock agreements and off-take agreements
  • tax law
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He is a long-standing figure in the projects and energy market, well regarded for his impressive experience and ability to "make deals happen."

Chambers | Projects & Energy, South Africa, 2018

He is a long-standing figure in the projects and energy market, well regarded for his impressive experience and ability to "make deals happen."

Chambers | Projects & Energy, South Africa, 2018
7 October 2019
CMS ex­pands in Africa
Frank­furt, 7 Oc­to­ber 2019. CMS an­nounces that RM Part­ners and Daly & In­am­dar Ad­voc­ates, based in South Africa and Kenya re­spect­ively, have today joined the lead­ing glob­al law firm. Go­ing for­ward, they will be known as CMS RM Part­ners and CMS Daly In­am­dar Ad­voc­ates.The ad­di­tion of these firms con­sid­er­ably strengthens CMS’s pres­ence in Africa, already en­com­passing An­gola, Al­ger­ia and Mo­rocco. For over 50 years, CMS has de­veloped a track re­cord of sig­ni­fic­ant deals in Africa, show­cas­ing its deep know­ledge of the leg­al sys­tems across the con­tin­ent. CMS now has 75 of­fices in 43 coun­tries and more than 4,800 law­yers world­wide.Duncan We­st­on, Ex­ec­ut­ive Part­ner, CMS said, “Our cli­ents see Africa as a ma­jor growth op­por­tun­ity, and many are look­ing to ex­pand in­to key mar­kets on the con­tin­ent. South Africa and Kenya are both siz­able eco­nom­ies, but they’re also gate­ways in­to oth­er sub-Saha­ran mar­kets. RM Part­ners and Daly & In­am­dar Ad­voc­ates have out­stand­ing repu­ta­tions thanks to their loc­al mar­ket know­ledge and the over­all qual­ity of ser­vice they provide to cli­ents.” With this ex­pan­sion, CMS is un­veil­ing a ded­ic­ated or­gan­isa­tion that brings to­geth­er our Afric­an firms and ex­perts in a unique mod­el and aligned prac­tices to provide our cli­ents with the best sup­port in Africa. CMS Africa has a pres­ence in the most dy­nam­ic re­gion­al hubs – Cas­ab­lanca, Jo­han­nes­burg and Nairobi – provid­ing us with a strong foot­print, sus­tained by of­fices in Al­gi­ers, Lu­anda and Mom­basa. CMS Africa of­fers the ideal al­tern­at­ive for tax and leg­al ser­vices in Africa, a po­s­i­tion that is be­ing re­in­forced through the ad­di­tion of the new firms.CMS RM Part­nersCMS RM Part­ners spe­cial­ises in provid­ing prac­tic­al and in­nov­at­ive leg­al, tax and trans­ac­tion ad­vis­ory ser­vices. It is com­mit­ted to de­vel­op­ing young Afric­an tal­ent and is ac­cred­ited as a Black Eco­nom­ic Em­power­ment (BEE) Level 1 law firm. Foun­ded by seni­or law­yers with ex­cep­tion­al track re­cords from top in­ter­na­tion­al and loc­al firms, the firm is based in Jo­han­nes­burg and com­prises more than 20 law­yers. Its cli­ents in­clude loc­al private and pub­lic in­sti­tu­tions, lis­ted com­pan­ies and nu­mer­ous glob­al en­ter­prises.Riza Moosa, Founder and Dir­ect­or at CMS RM Part­ners, said, “We are on a jour­ney to trans­form and mod­ern­ise the South Afric­an leg­al mar­ket, but we also re­cog­nise the im­port­ance of an Afric­an and in­ter­na­tion­al foot­print. Join­ing CMS is the right step for our firm be­cause they re­cog­nise the im­port­ance of grow­ing an Afric­an busi­ness from Africa, and have a clear, re­gion­ally-fo­cused growth plan for Africa which aligns with our own strategies.”CMS Daly In­am­dar Ad­voc­atesCMS Daly In­am­dar Ad­voc­ates is one of the top-rank­ing law firms in Kenya. It was formed via the mer­ger of two of Kenya’s old­est law firms and com­prises more than 35 law­yers work­ing out of of­fices in Nairobi and Mom­basa. The firm’s part­ners have handled nu­mer­ous ground-break­ing com­mer­cial trans­ac­tions and con­ten­tious civil dis­putes.Ham­ish Keith, Seni­or and Man­aging Part­ner at CMS Daly In­am­dar Ad­voc­ates, said, “Kenya is East and Cent­ral Africa’s epi­centre of tech in­nov­a­tion and its eco­nom­ic ex­pan­sion has been sup­por­ted by a gov­ern­ment that is com­mit­ted to im­ple­ment­ing busi­ness re­forms. Our de­cision to join CMS fol­lows a peri­od of close col­lab­or­a­tion on cli­ent work and a shared com­mit­ment to ser­vice. This will only deep­en as Kenya be­comes in­creas­ingly at­tract­ive as a des­tin­a­tion for for­eign in­vest­ment.”Pierre-Sé­bas­tien Thill, Chair­man, CMS, said, “This is an ex­cit­ing time in the de­vel­op­ment of CMS. Our cli­ents have a glob­al mind­set, and when they come to CMS, they need to know that they can ac­cess qual­ity ad­vice and ser­vice de­liv­ery in every ma­jor jur­is­dic­tion. One of our primary ob­ject­ives for the next four years is to fur­ther grow our geo­graph­ic­al reach. This is a sig­ni­fic­ant ex­pan­sion in our jour­ney to be­com­ing a genu­inely glob­al law firm.”
Press release
15 May 2020
CMS Ex­pert Guide to Re­new­able En­ergy
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.
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15 May 2020
CMS Ex­pert Guide to Re­new­able En­ergy
Expert Guide Energy & Climate Change
03 February 2020
CMS Ex­pert Guide to 5G
5G: Across coun­tries, some tech­nic­al para­met­ers are com­mon; the same can­not be said for reg­u­la­tion. Find here a guide about the key 5G re­lated reg­u­lat­ory po­s­i­tions be­ing taken in 40 jur­is­dic­tions.
Expert Guide Energy & Climate Change