The Fall of Icarus? How States Attract Renewable Energy Investment Claims

Abstract

The thesis is focused in the new type of claims in international investment law – claims concerning the revocation of incentive schemes in the photovoltaic (PV) solar sector. The general research question of this work is an inquiry why countries succeed and fail in their renewable policies (RE) judging by the amount of investment disputes against them. The interaction between the EU and Member States concerning RE policies has both political and legal dimensions. The political dimension includes several unsuccessful attempts of harmonization of support schemes. The legal dimension helps to achieve this harmonization by indirect means, such as the requirement on permissible state aid. With the introduction of PV solar investment cases, this process attracted a new discussion of the viability of investment treaty arbitration (ITA) within the EU. Member States appear solely responsible for their renewable policies, promoted in the bottom-up regime from supranational level. This situation leads to the gap between supranational governance and control within the EU law, from one side, and responsibility and accountability under international investment law, from the other. The greatest risk for the EU seems to be the independence of investment tribunals, when the Commission has limited means of influence on the arbitral decision-making process. The structure of the thesis will first discuss the EU-level policies relating to the incentivization of RE among its Member States and how these policies relate to the investment treaty regime and the rise in the number of ITAs based on changes to the support schemes in the PV solar sector specifically. Second, this thesis will conduct an empirical analysis of RE policies (abridged for focus on PV solar energy) in selected EU Member States by describing the background of regulation, response to EU Directives, further growth of incentives and the current reduction of support measures. Third, and based on a policy review, the thesis will analyze which national regulatory measures have formed the basis of investment treaty claims and examine what investment protections may be further invoked by specifically concentrating on the fair and equitable treatment (FET) standard due to its universal character and growing popularity in ITA. The final section of the thesis will identify the factors arising from the different number of ITA cases against EU Member States to date and provide insights into how these cases might be resolved and how they will affect future arbitral practice as well as future policy choices on the incentivization of RE among EU Member States.