Focus on energy transition and the role of the in-house lawyer

Carbon-free energy is far from being an aim related to environmentalists only. Nowadays, it is a good business, and all industries should be aware of it. This, plus an ever-evolving regulatory framework, are a clear challenge to lawyers that are not familiarised with the subject. The delicate part lies with sustainability, social license, cost efficiency and profitability, common concepts in any industry related to the path that the energy market is taking towards zero emissions

To achieve carbon neutrality, a substantial change in the energy market and regulation has been taking place in the last decade. This must lead to a special awareness and readiness in the role of an in-house lawyer to cope with the changes, being able to foresee how the market will be regulated in the next future. The fact is that all companies, energy-related or not, will need to have zero-carbon energy provider soon.

In-house lawyers should be able to assess how this scenario affects the core business of their company, not only in terms of cost, but also how EGS company criteria could be improved, by taking concrete action on achieving that goal.

A clear example could be found in the strategies that Chilean mining companies took during 2019 and 2020. Chile is one of the most advanced countries on transitioning to 100% renewable energy generation, and therefore has a mature offer of renewable generators. Considering this scenario, the high cost of energy supply and the high carbon footprint that Chilean copper had in comparison to other countries, lead such companies to design a path to transitioning from coal-based power purchase agreements to renewable zero-emission energy supply, where in-house counsel were key planners, considering that usually this strategy meant to renegotiate current agreements, exit current agreements, litigation and build energy supply tender processes. Nevertheless, the positive impact on their social license and cost management has proved to be a good decision, providing a green seal to the minerals they produce.

Achieving the changes required in this transition will require the collaboration, effort and commitment not only of the technical experts, but also from in-house lawyers focusing on achieving a strategy that allows a proper transition to zero-carbon energy to be fulfilled in a timely and orderly manner, delivering positive company results and EGS impact.