When you are looking at developing, investing into or financing a renewable energy project and need legal advice it is easy to focus on the core legal disciplines such as real estate, consents, construction packages etc. Whilst all of these are material aspects it’s essential to recognise the importance of energy regulation which all too often, can be overlooked or at least assumed from lists of deals and projects. At Burges Salmon, to provide our clients with the best advice in energy, we think understanding regulation is absolutely vital. Here are some of the reasons why:
- Starting with the obvious- non-compliance with energy regulation is often a criminal offence leading to associated penalties. Of equal, if not greater importance, this may result in having to completely re-work your project later to get funding or to continue operations. Classic examples in this area are exemptions (or not) from the need to hold an electricity supply licence or a distribution licence.
- Energy regulation can impact positively on your returns. A smart understanding of regulation and compliance routes can:
- enable projects to succeed and deploy in faster timescales and, in an ever changing technology world, capture first mover advantage
- help a business innovate, capitalise on new markets and save costs
- help insulate your proposition against likely changes in the energy world – something that is becoming more of an issue year on year
- Retrofitting a solution to comply with regulation is almost always more expensive and if a project is looking for early stage funding or investment, raises concerns about the business with funders and investors
- If your project has benefitted from external funding, non-compliance with regulation is often a default on those funding terms
- Understanding the regulation enables technologies to focus their efforts on what they need to do to lobby for change.
Experienced advisors in energy regulation can use their knowledge of how other sectors/technologies have overcome or capitalised on regulatory matters. Many project/technology developers, for understandable reasons, have a near exclusive focus on their particular technology. For them, drawing on the experience of others who are able to look beyond, to see what "work arounds"/solutions have succeeded in other technologies, can be very useful and add a huge amount of value.
The Government’s mantra is competition in energy and as that intensifies between energy projects, technologies and energy businesses, advisors who have a track record in energy regulation can provide real insight and creative solutions.
BEIS survey: ‘Disruptive innovation’ held back by regulation