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Denmark

DONG Energy was ready to take on German government

Dispute over planned tariff cuts could have reached the ICSID

Largely Danish state-owned DONG Energy was prepared to take the German government before the International Centre for Settlement of Investment Disputes (ICSID), if plans for retrospective cuts to feed-in tariffs had been implemented. The potential for such a move was revealed by Sven Martin Schindler, head of legal matters at DONG Energy Renewables Germany. He was speaking yesterday, at Windforce 2013 in Bremerhaven.

The cuts were heralded by Germany's federal environment and economy ministers in February 2013. Plans for feed-in tariff cuts and a five-month period without feed-in tariff payments for projects commissioned after 1 August 2103 were part of controversial proposals for a "brake on electricity prices". They would have affected offshore wind projects, planned and financed under existing rules. Among them was Borkum Riffgrund 1, DONG Energy's 320MW project that is currently under construction in the German North Sea.

"But if the law had been changed, the price tag for the German government would have been so high that there was no incentive to change the law. This was what was behind the Chancellor's [March 2013] words, when abandoning the plans. The government knew they would lose this case," said Schindler.

The main purpose of the Washington D.C-based ICSID is to "provide facilities for conciliation and arbitration of international investment disputes". Swedish state-owned energy company Vattenfall used the ICSID route in 2009, after a new government in the German city-state of Hamburg retrospectively changed water protection requirements. They would have made operation of the company's new Hamburg-Moorburg coal power station economically unfeasible.

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