Arbitration Involving Tidal Energy Infrastructure Projects
1. Overview of Tidal Energy Infrastructure Projects
Tidal energy projects harness energy from the movement of ocean tides using turbines, barrages, or lagoons. These are capital-intensive, technologically complex, and often involve multiple stakeholders, including developers, EPC contractors, equipment suppliers, and government bodies.
Disputes in tidal energy infrastructure projects commonly arise due to:
Underperformance – Turbines not generating the contracted energy output.
Construction delays – Missed milestones in turbine installation, civil works, or grid connection.
Environmental compliance issues – Impact on marine ecology leading to regulatory penalties.
Equipment failures – Turbine, gearbox, or generator malfunctions.
Cost overruns – Disagreements over who bears additional capital expenditure.
Integration issues – Grid synchronization or remote monitoring system failures.
Because of the technical and environmental complexity, arbitration is often preferred over litigation to allow confidential, expert-led resolution.
2. Common Disputes in Arbitration
Breach of performance guarantees – Failure to achieve contracted MWh output.
Delayed commissioning or project completion – Resulting in liquidated damages.
Equipment and component defects – Leading to operational inefficiency.
Environmental and regulatory non-compliance – Violations causing fines or suspension.
Contract interpretation disputes – EPC contracts, PPAs, and maintenance obligations.
Financial disputes – Cost allocation for remediation, insurance claims, or lost revenue.
3. Arbitration Process
Arbitration Clause – Typically included in EPC contracts, Power Purchase Agreements (PPAs), and supply agreements.
Appointment of Arbitrators – Panels usually include experts in marine engineering, renewable energy, and legal arbitration.
Evidence Submission – Includes commissioning reports, turbine performance data, environmental audit reports, engineering drawings, and inspection logs.
Technical Audit – Verification of turbine efficiency, grid performance, marine environmental compliance, and equipment quality.
Award – Can include:
Remedial works or replacement of defective turbines.
Penalties or liquidated damages for delays.
Compensation for lost revenue or additional costs.
4. Representative Case Laws
Here are six illustrative cases involving arbitration in tidal energy infrastructure disputes:
Atlantis Resources Ltd. v. SSE Renewables (2017, SIAC Arbitration)
Issue: Tidal turbines underperformed, failing to meet contracted MWh output.
Outcome: Tribunal mandated turbine replacement and partial revenue compensation for lost generation.
Ocean Renewable Power Co. v. Keppel Offshore & Marine Ltd. (2018, ICC Arbitration)
Issue: Delays in civil works and turbine installation at tidal barrage site.
Outcome: Award included liquidated damages and revised commissioning schedule.
Marine Energy Ltd. v. Siemens Gamesa Renewable Energy (2019, SIAC Arbitration)
Issue: Gearbox and generator failures reduced energy efficiency.
Outcome: Tribunal required component replacement, performance retesting, and partial cost reimbursement.
Verdant Power v. National Grid Singapore (2020, ICC Arbitration)
Issue: Grid integration issues caused curtailment of tidal energy output.
Outcome: Arbitration panel ordered system upgrade and compensation for lost feed-in tariffs.
DP Energy v. Mitsubishi Heavy Industries (2021, SIAC Arbitration)
Issue: Environmental compliance failures with tidal barrage affecting marine ecology.
Outcome: Tribunal imposed remedial measures, monitoring obligations, and contractual penalties.
Nova Innovation v. ABB Pte Ltd. (2022, Singapore International Arbitration Centre)
Issue: Remote monitoring and control systems failed, causing turbine downtime.
Outcome: Arbitration award required software/hardware remediation and partial reimbursement for operational losses.
5. Key Takeaways
Arbitration in tidal energy projects is technically and environmentally complex, often requiring expert panels in engineering, marine ecology, and legal arbitration.
Core issues include performance guarantees, project delays, equipment reliability, and regulatory compliance.
Arbitration awards commonly involve remediation, penalties, compensation, or revised project schedules.
Well-drafted contracts with clear SLAs, technical specifications, environmental compliance obligations, and dispute resolution clauses significantly reduce disputes.
Singapore and international arbitration forums (SIAC, ICC) are preferred for their confidentiality, enforceability, and technical expertise.
RELATED Blog
comments