As countries actively transition to a net-zero future, especially in the aftermath of COP26, many are seeking to attract investment and increase finance flows into the renewable energy sector. Some governments have therefore created incentives regimes, which may be attractive to investors who face significant up-front capital requirements and have to wait several years to see returns. However, these regimes are also vulnerable to subsequent reversal or amendment by the State. In some cases, this can change the economic rationale for the original investment.

Foreign investors in renewable energy projects may seek to mitigate these political and legal risks through investment treaties and the protections and remedies they offer. This article provides a brief overview of investment treaty protections, and considers investment structures and recourse to arbitration. It then looks at recent changes to the renewables regulatory regimes in certain jurisdictions, and how investment treaty protections have been used—or may in the future be used—in these contexts.

Read the article here.