Economics at your fingertips  

Regulatory stability and renewable energy investment: The case of Kazakhstan

Anatole Boute

Renewable and Sustainable Energy Reviews, 2020, vol. 121, issue C

Abstract: To protect end-consumers from the financial impact of renewable energy subsidies, it is common for governments to radically change the level of support initially promised to investors. In reaction, investors can sue states before international arbitration tribunals. Based on a detailed analysis of recent (2017–2018) arbitration decisions in the renewable energy sector, this article identifies criteria of regulatory stability that states have to respect when reforming support schemes. The “regulatory stability model” developed in this article is then applied to the specific case of Kazakhstan – a country characterized with high regulatory risk and policy instability. The analysis highlights how a country with a risky investment environment can make stability commitments to mitigate investors’ concern of regulatory change. Paradoxically, too much regulatory stability can prevent the government from controlling the volume of subsidized renewable energy, which in turn can trigger radical policy change. This article concludes that, to limit regulatory risk for investors, it is insufficient to focus only on the protection of existing projects against regulatory change. A certain degree of regulatory flexibility must be integrated in support schemes to help governments limit the number of renewable energy projects eligible for support, and so limit the impact of subsidies on consumers.

Keywords: Support schemes; Regulatory change; Investor protection; Transition economies (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2019.109673

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-06-13
Handle: RePEc:eee:rensus:v:121:y:2020:i:c:s1364032119308780