Beyond Borders: A GC’s Journey Through the Energy Transition

As the world increasingly shifts towards sustainable energy solutions, general counsel (GCs) are at the forefront of addressing numerous legal challenges and ensuring compliance in a rapidly evolving landscape. This transition is not merely a technical and operational shift but a profound transformation affecting regulatory, contractual, and strategic aspects of the energy sector.

The challenges GCs face are multifaceted, demanding a deep understanding of both the legal and business implications of the sector’s move towards sustainability. One of the primary challenges is managing regulatory changes. As governments worldwide implement new policies and regulations to promote renewable energy, GCs must stay abreast of these developments and ensure their organisations remain compliant. This involves interpreting new laws, advising on their implications, and sometimes advocating for favourable regulatory conditions. Compliance is not a one-time task but an ongoing process requiring constant vigilance and adaptation to new legal developments.

These challenges underscore the essential role of GCs in guiding their organisations through the complexities of energy transition. Their expertise in managing regulatory changes, updating contracts, and ensuring compliance is crucial for facilitating a smooth and legally sound shift to sustainable energy.

To gain an internal perspective on the daily challenges GCs face and how they can be best addressed, we spoke with Cristina Della Moretta, Group General Counsel at PLT Energia.

GC: First, could you please give us a breakdown of your career path in your own words?

Cristina Della Moretta (CDM): I started my career in the litigation and arbitration department of an international law firm based in Milan. However, after experiencing the LLM programme at Loyola Marymount University (Los Angeles – CA) Law School in American law and international legal practice, I realised that I wanted to become an international contracts negotiator. Following that amazing experience, both academically and personally, I began working at multinational corporations in the oil and gas sector. This role allowed me to travel the world, working and learning a lot from different legal systems, cultures, and perspectives in drafting, negotiating, and managing international EPC contracts for petrochemical, oil, and gas projects.

I was always passionate about oil and gas. However, at a certain point, I realised that I could do something different—something ‘greener’. When I spent time on construction sites for work, although I was very proud of the plants my company was building, even with my support, I also regretted seeing the other side of the coin: the impact these plants have on the environment and our planet. This prompted me to change sector and get involved in renewable energy installations. Since then, I have embarked on this wonderful career path that makes me get up every morning full of enthusiasm, knowing that I too can contribute to the energy transition together with my fellow engineers.

GC: What motivated you to pursue a career in law, particularly within the energy sector?

CDM: The passion for the rules, contracts, and company law, which step by step, year after year, has allowed me to work in renewable energy law, makes me happy and proud because of the great importance that this industry sector represents for the environment and the energy transition. This means having the opportunity to work with innovative companies and help navigate the legal challenges in a rapidly evolving industry. Working in the energy sector means addressing pressing global challenges such as energy security, access to electricity, and reducing greenhouse gas emissions. This sector ensures career advancement and specialisation in a dynamic and evolving industry. I have the chance to make a meaningful impact on society by shaping energy policies, promoting renewable energy deployment, and advancing sustainability goals. In other words, my motivation is driven by a combination of professional interests, personal values, and a desire to contribute to addressing some of the most pressing challenges facing society today.

GC: What specific challenges do you believe GCs face when navigating legal landscapes during energy transition initiatives?

CDM: A GC in an energy company faces a myriad of challenges when navigating legal landscapes during energy transition initiatives. These include regulatory compliance as laws evolve, negotiation of complex contracts with multiple stakeholders, balancing different interests, and ensuring alignment between legal strategies and overall business objectives.

Regarding Environmental and Social Governance (ESG) concerns, a GC must ensure that the company’s energy transition initiatives comply with sustainability goals. Additionally, a GC must have a good knowledge of intellectual property laws to protect the company’s innovations and ensure they remain competitive.

A GC must stay informed about political developments and anticipate potential changes in legislation that could impact the company’s operations and strategy. Energy transition policies can vary significantly depending on government priorities and geopolitical factors.

Another important aspect concerns financial considerations since energy transition initiatives often involve significant financial investments in new infrastructure and technologies. A GC must assess the legal implications of financing options, tax incentives, and subsidies while balancing the company’s financial objectives with legal requirements.

Communicating the company’s energy transition efforts to shareholders, customers, employees, and the public is another crucial task. This requires careful messaging and transparency.

Finally, a GC must consider the litigation risks, as the transition from traditional energy sources to renewable ones can lead to disputes with stakeholders, including competitors, communities, and environmental groups. A GC must anticipate and manage litigation risks effectively to minimise legal exposure and protect the company’s reputation.

A GC is required to have a multidisciplinary approach, to cooperate across departments, and to deeply understand both legal and business aspects of the energy sector.

GC: How do you approach stakeholder engagement and communication to build support for energy transition initiatives from both internal and external stakeholders?

CDM: It is not an easy task, and from my point of view, to do it effectively, it is necessary to adopt a strategic and inclusive approach to build support from both internal and external stakeholders. First, I identify the key stakeholders, including employees, investors, customers, local communities, government agencies, environmental organisations, and industry associations, which most of the time have different interests and concerns related to the energy transition, and I try to understand these peculiarities. I establish transparent communication channels to keep stakeholders informed about the company’s energy transition initiatives, progress, and challenges with newsletters and webinars. Moreover, to keep them motivated and aware, I clearly communicate the social, economic, and environmental benefits of the energy transition both to internal and external stakeholders, emphasising how renewable energy initiatives contribute to sustainability, reduce carbon emissions, create jobs, enhance energy security, and drive innovation. I think that it is very important to listen to and understand their concerns, perspectives, and expectations regarding the energy transition and to engage employees and colleagues as advocates by fostering a culture of sustainability and providing opportunities for involvement and feedback. Offering training programmes, workshops, and volunteering activities related to renewable energy and environmental stewardship motivates employees who feel empowered and informed, making them more likely to support the company’s initiatives.

As for external stakeholders, there are also the local communities with whom to address concerns, solicit input, and build partnerships for renewable energy projects. I mean, it is fundamental to engage in meaningful dialogue with the local community, to participate in community events, and to involve community members in the planning and decision-making process, because many times community support is essential for successful project implementation. Maintaining good relationships with the local community is as important as participating in industry initiatives, because by participating in industry-wide initiatives, a company can demonstrate leadership, share best practices, and advocate for supportive policies that benefit the entire sector.

I think that by adopting a proactive, inclusive, and transparent approach to stakeholder engagement and communication, companies can build support for energy transition initiatives and position themselves as leaders in the transition to a sustainable future.

GC: What legal considerations arise when renegotiating contracts or agreements to incorporate renewable energy procurement or sustainability clauses?

CDM: When I start to renegotiate a contract to include renewable energy procurement or sustainability clauses, my legal considerations are to ensure precise wording to define the scope and obligations related to renewable energy procurement or sustainability practices, compliance with applicable laws, regulations, and industry standards related to renewable energy and sustainability. It is also very important to correctly allocate the responsibility of each party regarding the implementation and monitoring of renewable energy procurement or sustainability, as well as to properly allocate the risks associated with renewable energy procurement, such as supply chain disruptions or regulatory changes, and allocate responsibilities accordingly. From a financial perspective, it is important to establish measurable performance metrics to evaluate compliance with renewable energy procurement or sustainability goals and to consider the financial implications of incorporating renewable energy procurement or sustainability clauses, including cost-sharing arrangements and incentives. Moreover, it cannot be omitted the conditions under which the contract can be terminated or renewed, particularly regarding changes in renewable energy procurement or sustainability requirements, and a specific clause related to confidentiality and intellectual property issues regarding renewable energy technologies or sustainability practices included in the contract.

GC: How do you approach legal compliance and due diligence when investing in renewable energy projects or technologies?

CDM: When I start working on a new potential renewable energy project, I approach legal compliance and due diligence by paying attention to several key steps. Firstly, I focus on the regulatory landscape, which entails understanding the regulatory framework governing renewable energy projects in the relevant jurisdictions, including permits, licenses, environmental regulations, and incentives. Secondly, I check environmental compliance, making an assessment of environmental compliance issues such as land use, habitat protection, water usage, and waste management to mitigate potential legal and regulatory risks. Thirdly, I consider the permitting and approval system, verifying that the project has obtained all the necessary permits and approvals from regulatory authorities and assess the status of ongoing compliance obligations. Successively, I evaluate the legal structure of the project or technology, including ownership, financing arrangements, and contractual agreements with suppliers, customers, and other stakeholders. This involves reviewing contracts and agreements related to the project, including power purchase agreements, to ensure compliance and identify any risks or liabilities, as well as reviewing documentation such as investment agreements, financing documents, insurance policies, and risk management plans to protect the interests of investors and stakeholders, which must be reviewed and prepared with care. Afterwards, I conduct due diligence on intellectual property rights associated with renewable energy technologies, including patents, trademarks, and trade secrets, to ensure protection and avoid infringement issues. Consecutively, I consider tax implications and incentives available for renewable energy projects, including tax credits, grants, and renewable energy certificates, to optimise financial returns and ensure compliance with tax laws. I also conduct financial due diligence to assess the project’s financial viability, including revenue projections, cost estimates, financing arrangements, and potential risks affecting financial performance. Lastly, I evaluate community and stakeholder engagement strategies to address social and environmental concerns, maintain public support, and minimise legal and reputational risks. In conclusion, I believe that this activity is fundamental, as an investor can identify and mitigate legal risks, ensure regulatory compliance, and maximise the success of investment in renewable energy projects or technologies. Comparing different jurisdictions is also crucial.

GC: What challenges arise when navigating energy transition across different jurisdictions? Could you give us some real-life examples?

CDM: My company allows me to work on wind, solar, and BESS projects across different jurisdictions in various countries, presenting several challenges. These include the regulatory frameworks and policy variability typical of different regions in Italy, but also in other countries, making it difficult to implement consistent strategies for transitioning to renewable energy. Infrastructure misalignment is a real problem because transitioning to renewable energy requires substantial changes in infrastructure, and aligning these changes across jurisdictions can be complex due to differing priorities and investment capacities. Interconnection issues arise when integrating renewable energy sources into existing grids. This can be challenging, especially when jurisdictions have different grid standards and levels of infrastructure development. Renewable energy resources like wind and solar are abundant in some areas but scarce in others, requiring careful planning to optimise their utilisation. The energy transition can be influenced by political dynamics and socioeconomic factors unique to each jurisdiction, impacting the pace and direction of change.

Due to my experience as a GC, I believe it is important to address two other points: financial implications and technological hurdles. On one hand, funding and investment mechanisms vary between jurisdictions, affecting the availability of capital for renewable energy projects and infrastructure upgrades. On the other hand, each jurisdiction may face distinct technological challenges related to renewable energy adoption, such as storage solutions, grid modernisation, or the deployment of new technologies. Addressing these challenges requires cooperation, coordination, and innovative solutions tailored to the specific needs and circumstances of each jurisdiction.

All these challenges are usual and can be handled since they are part of the game and foreseen by the laws. However, I cannot understand the completely out-of-control challenge that we have to face with environmental associations. These associations declare, by definition, to exist for the benefit of the planet, fighting for the green energy transition, yet they serve administrative actions against the construction of renewable energy plants. This is not acceptable and completely contradicts their principles. Considering that the transition to cleaner forms of energy is a prerequisite for climate neutrality and that by 2050, the majority of energy consumed in the EU must come from renewable sources, it is very difficult to understand the behaviour of environmental associations.

In particular, in those cases where applicable administrative laws and regulations demonstrate that all conditions requested by the authorities to issue permits to build a renewable energy power plant have been correctly met, these environmental associations invent violations of the interests of biodiversity, heritage, agriculture, forestry conservation, resulting in the suspension of construction of the renewable energy plant, which ultimately damages not only the entrepreneur but also all living beings and the planet.

GC: What legal challenges do energy companies face when expanding renewable energy investments into emerging markets or jurisdictions with less developed regulatory frameworks?

CDM: The challenges that entrepreneurs in the renewable energy sector face when aiming to expand their investments into emerging markets or jurisdictions with less developed regulatory frameworks pose several legal challenges, which are almost the same as those of developed countries: regulatory uncertainty, in particular unclear or evolving regulations can create uncertainty around project timelines, permitting processes, and compliance requirements, affecting investment decisions, and project viability and the political instability which characterises the emerging markets, this includes changes in government or policy direction and can introduce risks such as contract renegotiation, expropriation, or regulatory changes that impact project economics. The local content requirements or restrictions on foreign investment which are imposed in some jurisdictions can increase project costs, affect technology choices, and complicate supply chain management. Another typical challenge is that of inadequate permitting processes or environmental regulations that may lead to delays, compliance issues, or reputational risks associated with environmental impacts. The contract enforcement, the weak legal systems or lack of contract enforcement mechanisms, which often characterise these countries may make it difficult to uphold agreements, increasing the risk of disputes and jeopardising investor confidence.

Securing land rights for renewable energy projects can be challenging in jurisdictions with complex land use interests, leading to delays and conflicts and, finally, the financing and investment protection, a limited access to financing, currency risks, and concerns about investment protection may deter investors from committing capital to renewable energy projects in emerging markets. Addressing these challenges often requires careful due diligence, engagement with local stakeholders, strategic partnerships, and risk mitigation strategies tailored to the specific legal and regulatory landscape of each jurisdiction.

GC: What key lessons or takeaways would you like to share with other legal professionals or energy industry stakeholders who are embarking on similar energy transition journeys?

CDM: The renewable energy sector is amazing but complex, requiring careful attention. Firstly, it is necessary for me to gain a deep understanding of regulatory frameworks, policies, and incentives relevant to renewable energy deployment in different jurisdictions, to continue studying and to stay informed about changes and updates to ensure compliance and maximise opportunities. Then, to engage early and often with regulators, policymakers, community stakeholders, and industry partners throughout the planning and implementation process. Building strong relationships and fostering dialogue to address concerns, mitigate risks, and facilitate smoother project development.

Stakeholders must be open to innovative technologies, financing mechanisms, and collaborative approaches that can drive down costs, improve efficiency, and accelerate the transition to renewable energy. Priority should be given to environmental and social sustainability, conducting thorough assessments of potential impacts, engaging with affected communities, and implementing measures to minimise negative externalities and enhance local benefits.

Recognising that the energy transition journey is dynamic and evolving, influenced by factors such as technological advancements, market trends, policy changes, and societal preferences. Taking a long-term perspective when evaluating investments and strategic decisions related to renewable energy development, considering the full lifecycle costs, benefits, and risks associated with projects, as well as their alignment with broader sustainability and climate objectives.

Building capacity and expertise is crucial, investing in building internal capacity and expertise within your organisation or legal practice to effectively navigate the complexities of renewable energy projects. Staying abreast of industry developments, participating in relevant training and professional development opportunities, and leveraging specialised knowledge where needed.

Communicating transparently and addressing concerns proactively, seeking to build trust and credibility through honest and constructive engagement. By embracing these lessons and incorporating them into their approach, legal professionals and energy stakeholders can contribute to successful and sustainable energy transition efforts that benefit both society and the environment.

GC:To conclude, is there a particular quote or philosophy that resonates with you and guides your approach to work and life?

CDM: Never let a day go by without a dream, find a passion, never give up and go ahead with hard work until you have reached your result. Be true, honest, kind, positive and smile. Use empathy with colleagues and people and finally do not do to others what you would not want done to you.

 

Editorial: Sara Maggi – GC Powerlist