Energy Disputes in an Era of Peak Uncertainty

On 2 December 2025 we hosted a panel discussion on the topic "Energy Disputes in an Era of Peak Uncertainty".  The event was part of the inaugural London Arbitration Week.  

We explored various recent geopolitical events and the impact they have had in the energy sector.  Our speakers included Katja Yafimava (Oxford Institute for Energy Studies), Oisin Brady (Gaoithe Renewable Energy), Tania Tholot (Brattle Group) and Peter Cameron (Queen Mary University of London).  The discussion ranged over topics from pricing volatility to LNG non-supply, delays and cancellations of renewable projects and the impact of digitalisation. 

We summarise 8 key takeaways below:

1. The 'Energy Trilemma' ( the need for energy security, increasing decarbonisation and equity in terms of access and affordability of energy) is under immense stress

Russia's invasion of Ukraine, Europe's consequent imposition of sanctions and distancing of itself from Russian gas and the drive to get new renewables projects online as quickly as possible has exacerbated disputes risk.  Increased reliance in Europe on imported LNG has led to sellers taking advantage of price arbitrage opportunities. Buyers are being left short when contractual flexibility has been used to divert supplies to other markets and supply routes have suffered physical attacks. 

2. Oil and gas price volatility has led to commercial disruption, not just in the fossil fuels sector but also in the renewables sector

In the UK, the setting of gas prices by reference to oil, and of power prices by reference to gas prices has meant that energy price volatility has led to disputes.  These relate not only to price but also to supply under many long-term contracts. Sellers are looking to maximise their returns, including by wilfully breaching contracts and selling at higher spot prices. They have developed creative legal arguments based on force majeure, hardship and change in law.  The United States' imposition of tariffs and related global trade chaos has further strained supply chains.  Many companies are re-thinking their energy transition plans, with the consequence of stalled and even cancelled projects.

3. Regulatory change remains a key driver of disputes

These disputes are not just against states but also between commercial parties.  Changing governments, policies and commitments to renewable energy impact investor appetite and the economics underpinning many renewables projects. Increasingly interventionist resource policies in respect of critical minerals, including rare earths, vital to the transition are anticipated to drives disputes at both state and commercial level as supply chains are jeopardised.

4. Grid connection and stability issues are paving the way for a new frontier of renewables disputes 

Attempts by states to address such challenges, including by reforms affecting how grid connections are allocated, will only lead to further short-term uncertainty and risk. Battery energy storage system (BESS) and hybrid projects might provide a solution, but will also increase interface risk and muddy the waters in the event of dispute.

5. Whilst data centres are contributing to demand, their integrated power generation and storage could be used to contribute to supply

Hybrid data centre/renewable energy projects come with their own risk profile, however, not least because of the involvement in them of new players, with less experience of operating in the energy sector and perhaps a greater appetite for disputes. They also consume energy in different ways and supply to the grid would likely be intermittent, which may challenge grid infrastructure.

6. Peace in the Middle East and Ukraine and a potential US LNG glut is unlikely to mean that energy sector disputes "dry up" 

Energy and power prices remain high, and gas remains crucial both for the energy transition and in other sectors such as fertiliser production.  Europe still lacks adequate infrastructure to take full advantage of an abundance of US LNG which will in any event flow to wherever prices are highest and not necessarily to Europe.

7. Arbitration will remain the preferred forum for resolution of many energy sector disputes 

It remains the best means of obtaining a neutral and readily enforceable decision for players in many jurisdictions, but there is an onus on those involved in the process to ensure it remains an efficient and legitimate one.

8. AI will drive further change and disputes in the energy sector 

This is not just because of the energy required to support the development and use of AI technology but also as it will be used to develop and deliver novel ways of addressing long-standing problems in the energy sector.

Our international arbitration practice has experience of dealing with these issues and the disputes they lead to. Do get in touch if you are interested in hearing more.