Associates Area

Energy Transition | Ambition & Uncertainty: Paradox or the New Playing Field?
The energy sector now emphasizes carbon reduction, renewables, supply security, ESG criteria, and some energy nationalism, despite common net zero targets. Increased scrutiny and competition arise as the energy transition accelerates, prompting companies to seek innovative legal advice. Thus, the interplay between ambition and uncertainty creates a dynamic and creative tension, rather than a simple paradox.
Embracing this polarity is necessary, aiming for a resilient and comprehensive energy strategy for a sustainable future.
A. Portugal's Crucial Role
Portugal's progress relies on strategic policies, a welcoming environment for investors, and innovation. The country has leveraged its geography and climate along with stable political support for green energy and skilled human resources. As a leading European nation, Portugal's renewable energy transition shows promise and complexity, focusing on wind, solar, and hydrogen.
The nation's regulatory landscape should keep evolving to attract investors, driving future deals and expanding energy portfolios (green and brownfield).
B. Opportunities for the energy sector
1) Immense Capital and Bankable Projects: the energy transition continues to attract globes of capital seeking sustainable returns, and Portugal is well-placed to harness this. Setting up bankable projects is crucial to tap into this investment. Demonstrating robust and linear frameworks and long-term stability is essential to secure the investor’s appetite to invest in brown and greenfield projects.
2) Data Centres and New Energy Demands: with increasing digitisation, data centres are central to energy discussions. Portugal's renewable energy can sustainably power these centres, positioning Portugal as a leader in Europe's digital transformation.
3) Reindustrialisation and Economic Opportunities: Portugal aims to reindustrialise by adopting greener practices, revitalising manufacturing, creating jobs, and promoting sustainability. If Portugal moves fast, benefiting from its geostrategic position, it may become an energy leader and reestablish itself as a manufacturing powerhouse.
C. Trends and Challenges
To ensure Portugal capitalises on increasingly swift investment decisions, it must be cognisant of the obstacles to overcome.
To develop steady and simple regulations through transparent dialogue is crucial, including a clear permitting process and transposing EU directives. Additionally, accommodating technological advancements, fostering energy storage and electrification are key, as well as clarifying the participation in the markets and systems’ services.
Also, economic uncertainties, including energy price volatility, require adept financial planning and a stable and reasonable tax e regulatory framework.
Finally, designing and executing bankable projects increasingly demands precision to foreclose potential pitfalls while ensuring energy security.
Conversely, a broader European context highlights also significant trends to consider and opportunities to pursue.
Players are quick movers and increasingly adaptable; professionals in various core fields, and advisors experienced in different regulatory frameworks and trends are essential for achieving a successful result.
Likewise, cross-border collaborations and legal reforms are crucial for sustainable energy transitions. European trends in interoperability and innovative financing offer pathways for implementing solutions across sectors and Member-States.
ESG is far from dead. Businesses must navigate an evolving and increasingly fragmented regulatory landscape and carefully plan their climate-related goals and communications.
And to conclude, the persistent focus on the "not in my backyard" phenomenon, greenwashing, and ESG litigation require increasing attention. Therefore, thorough and forward-thinking development of projects is essential.
D. Linklaters & Energy Transition
Linklaters is a pioneer and leader in providing advice on energy transitions, working globally to navigate complex national regulatory landscapes. Our One Global Team has experienced how technology is quickly transforming the energy sector and requires crafting bespoke strategies, aligned with the strategic objectives of the different stakeholders