Force Majeure in the Hydropower Industry: Concepts and Case Studies

This book aims to highlight the particular situation faced by certain hydropower companies by the fact that they cannot fulfil their contracts due to force majeure. The hydropower field is under increasing pressure. Consumer requirements and expectations are growing, and energy producers and suppliers need to find solutions that meet expectations. However, there are unforeseen situations that make it impossible to meet deadlines, with delays, economic and material losses or even the cancellation of contracts and penalties. Global climate change, by exacerbating extreme phenomena, is increasingly causing imbalances in electricity production. At the same time, the prediction of these phenomena with an increased accuracy makes the events no longer even unpredictable. In such a situation, drafting a contract between the parties to protect in the event of an unusual situation that would lead to non-compliance with the contractual provisions is more than necessary. The exemplification of concrete situations of drafting, invoking and resolving such disputes can help to solve future contractual problems in this field.

The first part of the book will be an analysis of how water is used in electricity production. It is important to point out that all types of energy sources use water, to a different extent, of course, and that its spatial and temporal availability is very important. The focus will be on hydropower, presenting the current situation at the global level, and the effect of reducing the amounts of water in the river system.

The second part is based on the presentation of the concept of force majeure and the ways of presenting and drafting it in a contract. Many disputes or the success of a contract depended heavily on the provisions of this article of the contract. Obviously, there are also situations in which the signatory parties abuse or are not protected by these provisions of force majeure. Starting from a few brief examples from the international level, we reach a wide discussion of the situation created in Romania, when the largest supplier of electricity produced on the basis of water terminates several contracts invoking force majeure. The manner in which the opinion of the parties involved is presented to the court is analyzed and presented in detail.