“Ain’t no sunshine”: Photovoltaic energy policy in Europe at the crossroads between EU law and energy charter treaty obligations

Abstract

After the EU-driven liberalisation of the electricity market in Europe, EU Member States put in place a variety of measures to develop photovoltaic (PV) energy sources. These policies, however, soon proved to be unsustainably expensive, particularly in a moment in which the condition of EU Member States’ public finances is generally problematic. In order to fulfil the tight EU fiscal requirements, many EU Member States withdrew or substantially curtailed support for renewable energies. In response to these policy changes, a group of solar power investors initiated several arbitral proceedings against Spain, Italy, and Czech Republic under the Energy Charter Treaty (ECT). This wave of claims has once again brought to the fore the vexed question of compatibility between ECT and EU obligations in intra-EU cases. Given the variety of possible interpretative approaches and the lack of binding precedent doctrine in international investment arbitration, this paper maintains that solving this conflict through hermeneutic means is not entirely satisfactory. Therefore, it suggests a two-step strategy to accommodate it and neutralise its detrimental effects.