Global turmoil hits energy deals

Of course, that mission comes at a time when geopolitics and international conflicts continue to disrupt global and domestic energy supply chains and investment decisions. This underlines the globalisation and interconnectivity of markets, with direct consequences for energy projects.

Consequently, as a litigator at Shoosmiths in Scotland, where our energy practice is sharply focused on renewables and clean energy, I found discussion by industry delegates at the recent GAR Live: Energy Disputes 2026 forum in London highly thought-provoking.

Delegates were clear that conflict in Ukraine and tensions in the Strait of Hormuz are increasing the number and nature of energy disputes. Litigators are seeing an increase in price review arbitration, with recent market shocks prompting attempts to renegotiate the terms of power purchase agreements and driving a shift towards shorter term agreements to provide greater flexibility in the face of market volatility. Middle East tensions are also increasing force majeure claims and disputes. The discussion served as a reminder that, notwithstanding the pace of investment in energy transition, global markets remain heavily influenced by fossil fuel production and supply.

GAR Live didn’t shy away from the challenges in the renewables sector. When asked to consider the primary driver of renewables disputes, 52 per cent of the audience cited both regulatory and policy changes. Interestingly, Shoosmiths’ own Litigation Risk Report 2026 revealed, 60 per cent of general counsel and senior lawyers within the clean energy sector have been involved in regulatory disputes, and 58 per cent in environmental disputes, over the last 12 months. That compares to only 28 per cent across all sectors.

Moreover, 20 per cent of delegates at GAR Live highlighted grid connection and network capacity constraints as the leading source of renewables disputes, while 15 per cent cited construction delays and subsequent cost implications. For projects across Scotland, ongoing connections reform and capacity constraints continue to present significant challenges.

The renewables sector isn't immune to global market shocks. Pricing mechanisms featured prominently in the discussion, with 11 per cent of delegates highlighting them as the key source of disputes. Panellists noted many first-generation renewable energy contracts were drafted with relatively simple pricing mechanisms and limited flexibility. Market volatility has tested the limitations of those arrangements, contributing to a rise in price review disputes. A further 2 per cent of delegates pointed to ESG and supply chain issues.

There’s a general recognition among lawyers and clients that disputes are becoming more complex. Arbitration remains the preferred dispute resolution forum, but within the renewables space, a specific challenge is the complexity of agreements that must be ‘unpacked’ for arbitrators. Traditional energy disputes are not straightforward but it’s an area in which arbitrators have decades of experience.

However, many of the technologies, commercial structures and regulatory frameworks underpinning energy transition remain comparatively new, adding further complexity.

When preparing for arbitration, litigators, experts and counsel need to be able to forensically understand the complexities and nuances presented by the sector. Notably, only 67 per cent of delegates at GAR Live believed existing arbitral regimes were ‘mostly fit for purpose’ for energy disputes, as opposed to ‘fully adequate’. Furthermore, 11 per cent believed arbitrators don’t genuinely understand the energy sector. Food for thought indeed!

Stuart Clubb is a litigation partner at Shoosmiths Scotland