5. Other Legal and Quasi-Legal Considerations
These issues could, if applicable, and under certain circumstances, be important legal considerations in a clean energy project; they may or may not be linked to legal documentation:
5.1 Choice of Corporate Structure
The key considerations here are shielding a clean energy project and its owners from liability and how income and losses will be taxed. Other considerations are the complexity of formation and the impact of the chosen structure on governmental incentives and restrictions. Options for controlling a clean energy project include setting up a special purpose vehicle (SPV), subsidiary, corporation, partnership, limited liability company, or cooperative, all of which have advantages and disadvantages. This issue can be complex and legal counsel is important to determine which corporate structure best fits the proposed project.
The key considerations here are shielding a clean energy project and its owners from liability and how income and losses will be taxed. Other considerations are the complexity of formation and the impact of the chosen structure on governmental incentives and restrictions. Options for controlling a clean energy project include setting up a special purpose vehicle (SPV), subsidiary, corporation, partnership, limited liability company, or cooperative, all of which have advantages and disadvantages. This issue can be complex and legal counsel is important to determine which corporate structure best fits the proposed project.
5.2 Monitoring, Targeting and Verification
Often known by the acronyms M&V (or M&T), these systems are a means of providing quality control of the clean energy project. To properly judge the energy savings of an energy efficiency project or the energy delivered by a renewable energy project, it is important to have in place an appropriate system of monitoring and verification. This is particularly important with regards to project deliverables and financial incentives. There are different ways to measure energy savings and energy generation; it is important to choose an appropriate M&V system for your project.
Often known by the acronyms M&V (or M&T), these systems are a means of providing quality control of the clean energy project. To properly judge the energy savings of an energy efficiency project or the energy delivered by a renewable energy project, it is important to have in place an appropriate system of monitoring and verification. This is particularly important with regards to project deliverables and financial incentives. There are different ways to measure energy savings and energy generation; it is important to choose an appropriate M&V system for your project.
5.3 Intellectual Property Issues
Because clean energy industries are still nascent, the pace of technological development is often much quicker than in other industries. A producer of clean energy may wish to protect a new technology or process through a patent, trade secret, copyright, or trademark (although only the first two will normally be applicable in a clean energy project). Another issue is how to enforce a patent or trade secret. A developer may also wish to licence technology or licence technology to others. If any of these may be issues, an experienced intellectual property lawyer is essential to your project.
Because clean energy industries are still nascent, the pace of technological development is often much quicker than in other industries. A producer of clean energy may wish to protect a new technology or process through a patent, trade secret, copyright, or trademark (although only the first two will normally be applicable in a clean energy project). Another issue is how to enforce a patent or trade secret. A developer may also wish to licence technology or licence technology to others. If any of these may be issues, an experienced intellectual property lawyer is essential to your project.
5.4 Dispute Resolution
Normally, legal agreements such as power purchase agreements and operations & maintenance agreements contain dispute resolution provisions. It may, however, be worthwhile to have a standalone dispute resolution agreement governing the entire project; this may be particularly important in projects that span more than one jurisdiction.
Normally, legal agreements such as power purchase agreements and operations & maintenance agreements contain dispute resolution provisions. It may, however, be worthwhile to have a standalone dispute resolution agreement governing the entire project; this may be particularly important in projects that span more than one jurisdiction.
5.5 Decommissioning
There may be specific legal requirements related to decommissioning a clean energy project, particularly with respect to environmental requirements (disposal of hazardous materials, rehabilitation of project site, etc.).
There may be specific legal requirements related to decommissioning a clean energy project, particularly with respect to environmental requirements (disposal of hazardous materials, rehabilitation of project site, etc.).
5.6 Labour
Labour issues factor primarily into the construction phase of the project, and include issues such as union versus non-union workforce, organizing of a union, and collective bargaining.
Labour issues factor primarily into the construction phase of the project, and include issues such as union versus non-union workforce, organizing of a union, and collective bargaining.
5.7 Rights/Lands of Indigenous Peoples & Ethnic Minorities
Clean energy projects may be proposed for areas with significant indigenous populations which may or may not have outstanding claims (for land or otherwise) against the government. Furthermore, in some countries, clean energy projects may be "people-unfriendly" in the sense of displacing populations or creating other negative externalities for those populations, such as hydro projects that require the building of dams. On occasion, these projects may be located so as to minimize political impacts to the government; this could happen by shifting the burden such that the negative effects are felt disproportionately by those who may have less political power, such as ethnic minorities or indigenous peoples. This is an issue, which, if it comes into play during the development of a clean energy project and is not handled satisfactorily, has the potential to completely derail a clean energy project. Cooperation is the primary means of addressing this issue-appropriate negotiations should be conducted and agreements entered into with all groups who may be adversely affected by the project during the early stages of development.
Clean energy projects may be proposed for areas with significant indigenous populations which may or may not have outstanding claims (for land or otherwise) against the government. Furthermore, in some countries, clean energy projects may be "people-unfriendly" in the sense of displacing populations or creating other negative externalities for those populations, such as hydro projects that require the building of dams. On occasion, these projects may be located so as to minimize political impacts to the government; this could happen by shifting the burden such that the negative effects are felt disproportionately by those who may have less political power, such as ethnic minorities or indigenous peoples. This is an issue, which, if it comes into play during the development of a clean energy project and is not handled satisfactorily, has the potential to completely derail a clean energy project. Cooperation is the primary means of addressing this issue-appropriate negotiations should be conducted and agreements entered into with all groups who may be adversely affected by the project during the early stages of development.
5.8 NIMBY Factor
NIMBY refers to "Not-in-my-Backyard", or the desire of a group to obtain the positive effects of a new project (for example a new airport) but without the negative externalities (the noise, pollution, and traffic that will come with the new airport). Similarly, almost everyone wants clean energy, but many people do not want wind turbines in their backyard. Some clean energy projects generate negative externalities in the form of unwanted visual impacts or noise pollution. While this may seem like a minor issue, it should not be underestimated. A well-organized group can stop (or by delay, effectively stop) an otherwise viable project. Mitigation strategies may be necessary, and include public consultations and participation in the project, address concerns, and education campaigns. Having as many groups of stakeholders on board as possible can only result in positive benefit for the project.
NIMBY refers to "Not-in-my-Backyard", or the desire of a group to obtain the positive effects of a new project (for example a new airport) but without the negative externalities (the noise, pollution, and traffic that will come with the new airport). Similarly, almost everyone wants clean energy, but many people do not want wind turbines in their backyard. Some clean energy projects generate negative externalities in the form of unwanted visual impacts or noise pollution. While this may seem like a minor issue, it should not be underestimated. A well-organized group can stop (or by delay, effectively stop) an otherwise viable project. Mitigation strategies may be necessary, and include public consultations and participation in the project, address concerns, and education campaigns. Having as many groups of stakeholders on board as possible can only result in positive benefit for the project.
