Germany faces setbacks in international arbitration cases over energy transition

Germany has faced multiple setbacks over the last month in two separate cases over its energy transition plans before an international arbitration court, Christian Schaudwet reports in energy policy newsletter Tagesspiegel Background. The energy firm Vattenfall is suing the federal government before the Washington DC-based International Center for the Settlement of Investment Disputes (ICSID), a part of the World Bank Group, for at least 4.7 billion euros to compensate for decommissioning two nuclear power plants in Krümmel and Brunsbüttel, the report says. The German government had applied for a recusal in the case but was rejected last month. The court then rejected another objection filed by Germany in a separate case against Strabag, an Austrian construction firm, which is demanding compensation for wind power investments in the North Sea. The company argues that Germany failed to meet its obligations under a 1994 treaty when it switched to a current tender system for wind power subsidies in 2017. The court rejected Germany’s objection to the case, saying Strabag’s case was “not manifestly without legal merit”, according to the report.

Germany is in the midst of a green energy transition plan for renewables to make up 65 percent of power demand by 2030. It is aiming to phase out both nuclear and coal power, but it has faced numerous legal tie-ups along the way. Last week, hard coal power station operator Steag said it was suing to get better compensation for the shutdown of its plants. The company has submitted an emergency petition before the Federal Constitutional Court and plans to file a constitutional complaint.