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Solar Eclipse: Investment Treaty Arbitration and Spain’s Photovoltaic Troubles

Lessons from the Great Recession: At the Crossroads of Sustainability and Recovery

ISBN: 978-1-78560-743-1, eISBN: 978-1-78560-742-4

Publication date: 1 March 2016



This chapter seeks to explain the effects of actions in investment treaty tribunals against states in the European Periphery. The chapter examines the case of Spain and the multiple actions brought against it due to changes in support structures for the production of solar electricity. The aim of this analysis is to test whether investor-state dispute settlement (ISDS) can further the cause of environmental sustainability.


In its opening part the chapter employs a ‘socio-legal’ methodology, showing the links between legal frameworks and the evolution of social and political norms. The chapter then adopts a ‘law and economics’ approach in presenting recent developments seeking to tease out the dynamic between legal changes, economic effects, policy reactions and dispute resolution.


While there is significant uncertainty over the strength of the legal arguments of claimants, it seems possible that they will be successful in claiming compensation from the Spanish government. Nonetheless, a win for the investors is unlikely to reverse the Spanish policy of ending support for renewables due to fiscal constraints. The conclusion is that such actions have a negative impact in terms of promoting the spread of renewables and they inhibit recovery in crisis hit nations.

Practical implications

The chapter offers context on the use of ISDS against the background of the European crisis. This analysis has wider connotations for policy design as it feeds directly into concerns about multilateral agreements under negotiation, such as TTIP.


This is the first comprehensive academic study of the changes in Spanish regulatory frameworks regarding clean energy incentives. It is also the first comprehensive presentation of the actions brought against Spain as a result of these changes.



Glinavos, I. (2016), "Solar Eclipse: Investment Treaty Arbitration and Spain’s Photovoltaic Troubles", Lessons from the Great Recession: At the Crossroads of Sustainability and Recovery (Advances in Sustainability and Environmental Justice, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 251-271.



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