An introduction to renewable energy disputes

In this blog post we outline some of the key areas where disputes may arise in relation to renewable energy projects in the wind, waste to energy, solar and hydroelectric power markets.

Renewable Energy Disputes, raising issues of interest to insurance or construction professionals, have arisen in the following areas:

Wind

One specific issue which has repeatedly affected wind turbines has been the failure of their foundations. This was seen in Højgaard A/S v E.On Climate & Renewables UK Robin Rigg East Limited and another [2017] UKSC 59, where a miscalculation in the strength of the turbines’ foundations resulted in €26.25m of remedial costs and a trip to the Supreme Court to determine whether the contractor, MTH, was liable for these costs. In the end, despite having exercised reasonable care and skill, MTH was found to be liable for breaching a warranty that the foundations would be "it for purpose".

Other key areas of liability for wind projects concern:

  • positioning subsea cables for offshore wind farms without reasonable care and skill, which can result in damage
  • inadequate workmanship in the manufacture of key parts, resulting in repair work, and
  • completed projects not meeting forecast output levels.

Waste to energy (W2E)

Waste to energy projects provide an alternative to landfill by converting waste to valuable products, including electricity, heat and synthetic gas for use in gas turbines. These are complex systems which operate effectively only when a specific waste composition is used.

Liability can, therefore, arise at a design stage, through additional costs associated with over-designed projects as seen in MW High Tech Projects v Haase Environmental Consulting [2015] EWHC 152 (TCC). Liability can also arise once the plant is operational where the planned composition of waste cannot be used effectively because of the design, or because the required composition of waste for maximum efficiency cannot be sourced, whether through the fault of the operator or the designer.

Solar

A major area of potential liability, particularly with residential projects, arises at the point of installation, where contractors must consider the capacity of a building’s roof to bear the additional load of the solar panels.

Similarly, with the closure of the UK government’s Feed-in Tariffs scheme on 31 March 2019, there is the possibility that claims will be brought against contractors who unduly delayed the installation of renewable energy technologies to the detriment of the consumers who will now miss out on these valuable subsidies.

Hydroelectric

Hydroelectric claims can arise from:

  • water turbines failing
  • the breakdown of electrical and mechanical machinery, and
  • damage from water surges.

SSE Generation Ltd (SSE) v Hochtief Solutions AG [2018] CSIH 26 is a recent Scottish decision which involved a claim concerning a hydroelectric power scheme where a blockage from falling rock material resulted in a loss of power generation. This case is apparently ongoing, with Hochtief having been granted leave of appeal to the Supreme Court in the summer of 2018.

For more detail regarding disputes in respect of renewable energy, please see our extended article, originally published on LexisNexis, available here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.