Investment Arbitration and EU Law in the Aftermath of Renewable Energy Cuts in Spain

Abstract

Over the past five years the sector of renewable energies in Spain has gone through several regulatory changes. These have resulted in a scenario of instability and permanent regulatory risk that jeopar- dizes the rule of law. The reforms have been primarily motivated by the need to alleviate the ``tariff deficit'' from the point of view of market profitability and by some other specific problems, such as the cost of the high premiums in a context of economic crisis. Electric energy production facilities subject to the special regime under the Spanish Royal Decree 661/ 2007, of 25 May were entitled to a feed-in tariff, consisting in the payment of a regulated tariff or the perception of a fixed premium, additional to the market price. This regime was first suspended and, finally, substantially amended, by the successive Governments in Spain, since 2010.