Investors demand EU backing

Eleven major energy companies have appealed to European authorities to ensure that investor protection is guaranteed on renewables projects.

In a joint statement issued today the companies said protection principles are a key advantage in the EU’s chase to attract cash but have “failed investors in recent years”.

A number of examples of “sharp policy reversals” have been singled out including tariff cuts in Spain, Romania, the Czech Republic, Greece and Italy.

“The impacts of such actions have undermined investor confidence in the recipient member states and had material impacts on the economy,” the companies said.

The 11 outfits involved that have published the appeal include Acciona, Allianz, Commerzbank, EDP Renewables, Enel, ERG Renew, Eon, Gamesa, HG Capital, Rabobank and RES.

“While the industry acknowledges the need to adjust regulatory frameworks over time to respond to declining technology costs and market developments, retroactive changes are a misguided answer and erode investor confidence in the EU energy infrastructure sector where costs are sunk from the moment of the investment and there is very limited ability to improve profitability thereafter,” they said.

“Accordingly, investors in the space have no choice but to expect long-term regulatory stability for renewable energy plants. Thus any regulatory change should be concerted, non-retroactive, non-discriminatory, and avoid any legal gaps that would undermine investor certainty.”

A permanent dispute settlement mechanism must be set up to deal with such attempts at retroactive policy changes and a grandfathering principle must also be implemented in the post 2020 renewable energy directive, the signatories said.

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