Insights from London Arbitration Week

The energy transition is redrawing the risk landscape for investors, states, and contractors alike, and arbitration is moving decisively to the centre stage. A London Arbitration Week panel discussion lifted the lid on how disputes in renewable and transitional energy projects are evolving across regions; the types of claims that are emerging; and how tribunals are approaching quantum-related issues. 

The conversation underscored arbitration’s continued advantages of flexibility, enforceability and sector-specific expertise, as well as confidentiality, while also spotlighting the realities of a fast-changing market defined by rapid technological shifts, long-term offtake structures, and intricate construction and supply chains. Confidentiality is particularly valuable where disputes involve commercially sensitive pricing, proprietary technology, cyber‑security vulnerabilities or politically sensitive policy choices, allowing parties to protect sensitive data and reputations while resolving complex technical and financial issues.

Regional dynamics and the decarbonisation trilemma: Ambition versus reality

Across Africa, the outlook reflects both ambition and pragmatism. While many states have committed to the Paris Agreement on climate change, many economies remain dependent on hydrocarbons for revenue and foreign exchange earnings. Financing and compliance asymmetries are stark: some states can fund renewables at scale while others prioritise gas as a transitional fuel. Gas may serve as the bridge fuel, paired with smaller-scale, high-impact projects aimed at addressing energy poverty. This hybrid model will shape policy choices and the disputes to come, including potential tensions over nationalisation or export restrictions on critical minerals needed across clean‑energy supply chains.

In the Middle East, the combination of political commitment and access to capital has catalysed mega-projects and aggressive renewable targets. Ambition, coupled with falling technology costs, is expected to translate into delivery, yet schedule slippage, complex interface risk and sovereign support issues remain live. Disputes are also expected around emerging technologies and infrastructure, including hydrogen production and storage, pipeline capacity, cost allocation, and grid-connection responsibilities.

The UK perspective is coloured by headline political debate over net zero, pricing and the distribution of costs, including planning and locational pricing debates. Long-dated projects and benchmark linkages to gas highlight the tension between investment certainty and consumer affordability, with implications for regulatory stability and investor expectations. Delivery of net zero targets will likely rely heavily on third‑party capital, rather than direct state funding.

Eastern Europe is anything but homogenous: different socio‑economic histories and energy mixes drive distinct paths through the trilemma of security, affordability and decarbonisation. Some markets prioritise sovereignty and security over rapid decarbonisation, leading to change-in-law risks, permitting delays and pricing disputes. EU membership brings legally binding decarbonisation obligations that shape subsidies and permitting, while non‑EU states retain policy flexibility. The evolving treatment of energy investments under instruments such as the Energy Charter Treaty, alongside withdrawals and sunset‑clause controversies, and domestic frameworks is likely to generate continued friction. These developments evidence a notable shift toward commercial rather than investment arbitration in some jurisdictions.

Dispute trends and quantum

The disputes portfolio is widening and accelerating. Construction, design and technology failures are prominent, as are grid-connection responsibilities, sovereign guarantees and force majeure claims linked to recent global political and economic crises. 

In renewables, a primary concern is flexibility risk in the context of batteries and energy storage. Storage performance, intermittency and allocation of market risk raise granular questions about responsibility across owners, manufacturers and operators. Expect additional friction over hydrogen-related infrastructure and pipeline access/costs, alongside potential claims tied to export bans or state control measures over critical minerals. Permitting delays and policy shifts are recurrent flashpoints, especially where regulatory timelines lag deployment ambitions. Software-heavy assets such as battery storage and EV charging also introduce liability questions around performance, integration and cyber‑physical risk and is a growing area ripe for disputes amongst investors unfamiliar with the sector. 

On calculating quantum, methodologies are familiar, but the inputs are anything but. Discounted cash flow, comparables and cost-based approaches require project-specific modelling of weather patterns, policy risk, price volatility and utilisation. Asset maturity matters: early-stage assets may call for cost-based cross-checks, while mature assets lend themselves to cash-flow methods. 

Tribunals increasingly demand native, operational data such as meter readings, raw SCADA outputs, payment records rather than high-level summaries. They are particularly alert to double counting when adjusting both cash flows and discount rates. ESG-related costs and physical climate risk are also beginning to feature explicitly, with lenders’ and offtakers’ datasets often filling market-data gaps. Costs must be demonstrably quantifiable and mapped to operating impacts, and tribunals favour a single, integrated model used across technical and quantum experts.

Outlook to 2030: What’s coming next?

Expect a wave of offshore wind disputes as standardised contracting spreads and supply‑chain pressures persist; more battery storage and EV‑software disputes as systems scale; continued delay and interface claims on large projects; and a rising tide of mining disputes driven by critical minerals demand. In some markets, fewer sovereign‑guarantee claims may emerge as risk allocation matures. 

The next generation of arbitration will turn on data‑rich evidentiary records, sharper contractual allocation of technology and market risks, and forums adept at marrying engineering reality with financial precision, rewarding practitioners who can translate complex operational narratives into credible value – all within confidentiality frameworks that safeguard sensitive commercial and technical information.