by Hardwick Legal | Jun 1, 2020 | Purpose Built (LexisNexis)
<article><article><article><section><p>Energy analysis: Dr. Martin Weitenberg, partner at Eversheds Sutherland looks at the EU’s <a href="https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12369-Union-renewable-Financing-mechanism" target="_blank" data-sf-ec-immutable="">draft implementing act for financing renewable energy projects</a>, a third option for Member States to meet binding targets for their share of electricity coming from renewable energy.</p><div><span style="background-color:transparent;color:#777777;font-family:inherit;font-size:var(–font-size-h2);text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">What is the Draft Implementing Act (DIA) seeking to do and to achieve?</span><br></div></section></article></article><section><section><p>The DIA is the Commission’s proposal to establish the Union renewable energy financing mechanism (the mechanism) envisaged in <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/energy/document/412012/6013-31M3-GXFD-81PW-00000-00/linkHandler.faces?psldocinfo=European_Commission_publishes_a_draft_act_for_financing_renewable_energy_projects&linkInfo=F%23GB%23EU_REG%23sect%2532018R1999+AND+Art+33%25section%2532018R1999+AND+Art+33%25&A=0.5950661394929371&bct=A&risb=&service=citation&langcountry=GB" target="_parent">Article 33</a> of Regulation (EU) 2018/1999, the Governance of the Energy Union and Climate Action Regulation. From 2021 onwards, the mechanism shall offer Member States a third option for meeting their individual binding targets for the share of their electricity coming from renewable energy sources under the regime set by <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/energy/document/412012/6013-31M3-GXFD-81PW-00000-00/linkHandler.faces?psldocinfo=European_Commission_publishes_a_draft_act_for_financing_renewable_energy_projects&linkInfo=F%23GB%23EU_REG%23num%2532018R1999%25&A=0.3614197810407547&bct=A&risb=&service=citation&langcountry=GB" target="_parent">Regulation (EU) 2018/1999</a>, the Governance Regulation, and <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/energy/document/412012/6013-31M3-GXFD-81PW-00000-00/linkHandler.faces?psldocinfo=European_Commission_publishes_a_draft_act_for_financing_renewable_energy_projects&linkInfo=F%23GB%23EU_DIR%23num%2532018L2001%25&A=0.4482071405423206&bct=A&risb=&service=citation&langcountry=GB" target="_parent">Directive (EU) 2018/2001</a>, the Renewable Energy Directive (RED II).</p><p>Currently, to meet their renewable energy targets, Member States, in the first place, strive to increase the amount of electricity coming from renewable energy projects in their own territory.</p><p>A second possible way for Member States to meet their individual binding renewable energy targets is through direct cooperation with either other Member States or with third countries. Such direct cooperation may include statistical transfers (as implemented between Luxembourg and Lithuania), joint projects as well as joint support schemes (as set up by Sweden and Norway) or the opening of support schemes (as between Denmark and Germany).</p><p>In each case, direct cooperation has the effect that the generation of electricity from renewable energy sources on the territory of one country i</p></section></section></article>
Source: LexisNexis Purpose Built
European Commission publishes a draft act for financing renewable energy projects
by Hardwick Legal | May 19, 2020 | Purpose Built (LexisNexis)
<p>The slowdown of the UK’s construction activity in March 2020 was the fastest decline seen since the 2008 financial crisis.</p><p>With the UK government having already announced that it will be introducing changes to the insolvency regime in England & Wales, as part of its response to COVID-19, there is a clear indication of what is expected to come. Our general guidance on
managing the increased insolvency risk arising from this period of disruption can be found <a data-sf-ec-immutable="" href="https://www.simmons-simmons.com/en/publications/ck7fx9c860qxc0921fc1arkmq/covid-19-impact-managing-insolvency-risk-and-financial-reporting">here.</a></p><p>In the construction industry, as cash flow issues bite, the downturn is likely to result in the insolvency of many sub-contractors which, in turn, will see the risk carried by the contractor. Last month a survey from the Federation of Master Builders
found that two-thirds of SMEs in the UK construction industry will not last more than two months, unless the government gives them cash grants.</p><h3 id="what-contractual-protection-might-exist-under-the-construction-contact">What contractual protection might exist under the construction contact?</h3><p>Where there has been a sub-contractor insolvency, and the works are ongoing, contractors may have a contractual right to terminate as a result of the sub-contractor’s insolvency. Other options include making calls on any bonds available, or contacting
any guarantor to complete the outstanding works.</p><p>It is also commonplace for sub-contractors to provide collateral warranties in favour of employers, or other third parties such as a funder (albeit, a collateral warranty is only as robust as the contract to which it relates).</p><p>Concern over the potential for costly and long-running disputes involving construction industry participants has prompted</p>
Source: LexisNexis Purpose Built
Trouble in the supply chain? Sub-contractor insolvency and insurance
by Hardwick Legal | May 19, 2020 | Purpose Built (LexisNexis)
<p>Welcome to a very special edition of our environmental law news podcast. This month we’ve partnered up with the UK Environmental Law Association (UKELA), along with 6 Pump Court, to bring you a COVID-19 special where we hear from environmental regulators on how the pandemic is affecting operations. </p><p><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">Simone Davidson, Head of Lexis PSL Environment, Trustee and a Vice Chair for UKELA and Mark Davies, Barrister at 6 Pump Court talk to Peter Kellett, Director for Legal Services for the Environment Agency, Richard Broadbent, Principal Solicitor for Natural England and Terry A’Hearn, CEO of the Scottish Environmental Protection Agency. </span></p><p><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">In these three conversations, the speakers take us through:</span><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto style=""></span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto></p>
Source: LexisNexis Purpose Built
Environmental law news podcast — environmental regulators' response to coronavirus (COVID-19)
by Hardwick Legal | May 1, 2020 | Purpose Built (LexisNexis)
<article><section><p>In proceedings to enforce an adjudicator’s decision for the amount stated in a contractor’s interim payment application, the Technology and Construction Court declined to grant a stay of execution to allow a
‘true value’ adjudication to take place in respect of the final account. In the view of the court, permitting the employer to commence such an adjudication, in circumstances where it had not paid the amount awarded by the adjudicator,
would run contrary to <em>S&T v Grove</em>.</p></section></article><section><p><em>Broseley London Ltd v Prime Asset Management Ltd (Trustee of the Mashel Family Trust)</em> <a href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSWYWZ-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYVAW-ACYYVEEWAW-YVAUVEBBD-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&linkInfo=F%23GB%23EWHCTCC%23sel1%252020%25year%252020%25page%25944%25&A=0.801356101523099&bct=A&risb=&service=citation&langcountry=GB" target="_parent">[2020] EWHC 944 (TCC)</a></p><section><h3>What are the practical implications of this case?</h3><p>The Court of Appeal’s ruling in <em>S&T v Grove</em> <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSAYWD-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYDUV-ACYYVEECUV-YBEBYYUDV-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&linkInfo=F%23GB%23EWCACIV%23sel1%252018%25year%252018%25page%252448%25&A=0.23244344983498422&bct=A&risb=&service=citation&langcountry=GB" target="_parent">[2018] EWCA Civ 2448</a>, <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSAYWD-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYDUV-ACYYVEECUV-YBEBYYUDV-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&linkInfo=F%23GB%23CONLR%23vol%25181%25page%2566%25sel2%25181%25&A=0.9900632526373528&bct=A&risb=&service=citation&langcountry=GB" target="_parent">181 ConLR 66</a> confirmed that an employer who has failed to give a valid payment or pay less notice is nonetheless entitled to bring an adjudication to determine the ‘true value’ of the interim payment application
in question. However, it can only do so once it has paid the amount stated in the contractor’s interim payment application (the ‘notified sum’). See News Analysis: <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSWYWZ-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYVAW-ACYYVEEWAW-YVAUVEBBD-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&ps=null&bct=A&homeCsi=412012&A=0.8692258461239392&urlEnc=ISO-8859-1&&dpsi=0S4D&remotekey1=DOC-ID&remotekey2=0S4D_3154562&service=DOC-ID&origdpsi=0S4D">Court of Appeal confirms right to adjudicate true va</a></p></section></section>
Source: LexisNexis Purpose Built
Employer not permitted to commence ‘true value’ final account adjudication (Broseley London v Prime Asset Management)
by Hardwick Legal | Apr 15, 2020 | Purpose Built (LexisNexis)
<article><section><p>Energy analysis: Although it is too early to tell the full impact of the coronavirus (COVID-19) pandemic on the energy sector, some early issues and trends are emerging. Silke Goldberg, partner, Reza Dadbakhsh, partner (London), Will Breeze, partner (London), Mathias Dantin, counsel (Paris), Matthew Job, partner (London), Lorenzo Parola, partner (Milan), Ignacio Paz, partner (Madrid) and Kingsley Boateng, associate, at Herbert Smith Freehills examine this impact on, and some future challenges for, the upstream oil and gas sector, the European power sector and the EU ETS, and the recent actions of the regulators across Europe. The effects of the pandemic on energy infrastructure, energy sector M&A activity and the timetables for renewable energy subsidy tenders across Europe are also considered, alongside summaries of the legislative support measures for vulnerable customers in some of the worst affected European jurisdictions.</p></section></article><section><section><h2><mark id="CITEID_816399"></mark>Upstream Oil & Gas</h2><p>The outbreak of the coronavirus pandemic has heightened the challenges facing oil & gas producers navigating an already challenging business terrain. Saudi Arabia’s dramatic policy reversal to increase its oil production at discounted prices and its resultant price war with Russia has flooded the industry with oversupply.</p><p>When considered in tandem with OPEC’s failure to reach a decision on reduced supply caused by demand constraints arising from coronavirus, producers are having to take active steps to simply preserve their position in a market experiencing strong downward price pressure. As recently as 17 March, for example, the Brent Crude futures price had fallen to US$29.77, the first time it had drifted below US$30 since January 2016.</p><p>Mitigating price volatility is part of the modus operandi for producers. Many producers therefore have hedging arrangements in place, which are likely to expire by the early part of next year and, importantly, only alleviate price and not volume exposure risks.</p></section><section><h2><mark id="CITEID_816400"></mark>Need for increased storage capacity?</h2><p>Storage rates are rapidly increasing as producers seeking to stock their excess supply compete for limited onshore and offshore storage capacity. The International Monetary Fund (IMF) </p></section></section>
Source: LexisNexis Purpose Built
Coronavirus (COVID-19)—Impact on the energy sector
by Hardwick Legal | Apr 15, 2020 | Purpose Built (LexisNexis)
<article><section><p>Energy Analysis: Judith Aldersey-Williams, partner at CMS, discusses what the combination of the coronavirus (COVID-19) pandemic and the recent crash in oil price means for the North Sea oil and gas industry.</p></section></article><section><p><em>The North Sea oil and gas industry is currently facing a ‘perfect storm’ of coronavirus and an oil price crash. The combination of which is placing incredible strain on the industry. The share prices of quoted oil companies and oil service companies have fallen significantly—operators have reported plans to cut operating costs and reduce their capital expenditure by up to a third, and supermajors have halted share buyback schemes. BP’s Bernard Looney has said that ‘this may be the most brutal environment for oil and gas businesses in decades’.</em></p><section><h2><mark id="CITEID_818369"></mark>Practical impacts of coronavirus (COVID-19)</h2><p>The most immediate challenge for the UK oil and gas industry is that of coronavirus and the associated government restrictions. The oil and gas sector is considered an essential service as the government needs to ensure continued security of supply; the UK’s oil and gas industry still provides 45% of UK total energy needs, and 59% of its oil and gas demand.</p><p>Whilst companies have sent their head office workers home, key workers remain offshore, at terminals and in warehouses and logistics facilities. Onshore sites are presently not mandated to close but must carry out an individual risk assessment to confirm whether work can continue in the circumstances, bearing in mind the application of health and safety requirements and the obligation to ensure a safe working environment for employees. Arrangements are also in place to assist the continued travel of key workers to and from heliports—an Oil & Gas UK (OGUK) template travel letter, that can be carried by key workers and shown to police if challenged, has been made available across the industry. The industry is also monitoring the impact on supply of equipment due to border closures and restrictions on port operations and is engaging with the police to try </p></section></section>
Source: LexisNexis Purpose Built
Coronavirus (COVID-19)—impact on North Sea oil and gas industry
