Ukraine’s Reduction in Renewable Energy Feed-In Tariffs: A Preview of Coming Disputes – JD Supra

To promote the production of clean energy, many countries have introduced incentives to encourage investment in the renewable energy sector. These incentives have often included feed-in tariffs (“FiTs”), which generally involve long-term contracts providing for certain guaranteed payments to producers of renewable electricity (e.g., solar and wind power plants). Incentives such as FiTs have attracted substantial foreign investment in the renewable energy sector since the early 2000s.

Particularly after the global financial crisis, however, some governments have failed to comply with their FiT regimes or have sought to change their regulatory frameworks to reduce or eliminate FiTs in the renewable energy sector. In some cases, there have been sizeable differences between the FiTs owed by governments to renewable electricity producers and the prices utilities could charge for electricity. Some of the measures taken by governments have resulted in significant disputes, and foreign investors have brought claims against a number of States in which they have relied on protections under bilateral and multilateral investment treaties. More than sixty such cases have been brought against European States, most notably Spain, Italy, the Czech Republic, and Romania.

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