The global shift to renewable energy and aspirations to reduce carbon emissions, together with the war-related energy crisis are among the major drivers that keep BSLaw Budapest - Szuchy Law Office’s energy practice busy, as Office Managing Partner Robert Szuchy points out.
“Energy is such a complex and timely topic, and it is not only because of the war in our neighborhood but because of the global drive and efforts to reduce carbon emissions,” Szuchy explains.
“Market players have to solve issues arising out of the high prices and also due to the limited availability of the various energy resources.” Szuchy adds that “at both local and international levels, the creation of energy communities is one possible solution for reducing emissions and becoming more energy efficient. The market needs new technology solutions all the time."
“In general, as the energy market is a highly regulated sector,” Szuchy says, "both the EU and national governments have established an extensive legal framework. The legal sector must collaborate with businesses and the technology sector in particular, on the understanding that collaboration between the different actors is essential to create economically and commercially viable solutions. This new market environment demands new contracts."
"In Hungary, the concept of a smart grid is a new one, and we are involved in quite a few projects involving such solutions," Szuchy adds. "For example, we have advised on large-scale energy storage projects. We have also had interesting advisory mandates in relation to e-charging and micro-mobility."
“Across the board in the energy sector, we advise on regulatory issues, including licensing,” reports Szuchy. “One of the other key issues for energy-related projects nowadays is financing, considering the EU taxonomy and ESG requirements. There are numerous criteria which companies have to meet in order to receive financing for a project.”
Looking forward to the upcoming months, Szuchy believes that the firm’s energy practice will be even more active. “Larger energy consumers are seeking new opportunities to reduce the cost of energy,” he says. “New potential clients are looking for different solutions on how to be more energy independent, how to cut costs, or what type of alternative service providers to find. All these considerations are leading to a host of legal issues, such as how to establish a smart grid, for example, and how to set up energy communities.”
Another major challenge, according to Szuchy, is dealing with the negotiations within the network and deciding on what type of contractual relationships could be best used. Finally, Szuchy believes, that creating PPA contracts and related commercial aspects will be important. “Companies have to either invest in energy efficiency or pay a certain amount in fees. Accordingly, there will be an even heavier focus on the energy practice,” he concludes.