2026 Energy Disputes Outlook: Key Energy Arbitration and Litigation Trends from Vinson & Elkins

• LNG Market Volatility: Increased uncertainty with long-term supply contracts is prompting a trend towards more bespoke contract negotiations and a departure from market-standard terms to date.
• LNG Contractual Flexibility and Renegotiation: With the increase of shorter-term contracts that are more responsive to market volatility, parties are pushing for greater contractual flexibility that allows them to reallocate risk over time.
• Small Modular Reactors (SMRs) and the Development of Nuclear Energy: With new nuclear projects and technologies being developed in parallel to new policy, the risk of misalignment and potential for disputes arising is high.
• Climate Change Litigation: Industries such as energy and construction could face more stringent rules, mandating a reduction in greenhouse gas emissions, which could lead to increased climate-related litigation or arbitration. 
• Renewable Energy Project Delays and Cancellations: The global drive to construct renewable energy infrastructure has prompted a visible rise in commercial and schedule challenges that companies must anticipate and guard against.
• Grid Modernisation: Growing connection queues for renewable projects are giving rise to transmission bottlenecks and a heightened risk of outages, resulting in an increase in curtailment and outage-related claims, among other disputes.
• Fossil-Fuel Phase-Out Policies: At a time where long-term contracts for more traditional forms of energy remain in place, the introduction of fossil-fuel phase-out policies brings a high likelihood of disputes continuing to arise at both national and international levels.
• Carbon Capture, Utilization, and Storage (CCUS) Hurdles: Despite positive steps, regulatory compliance and fragmented permitting processes continue to challenge CCUS deployment, causing delays and uncertainty for parties.
• Deep-Sea Mining: The industry faces two competing regulatory frameworks, potentially setting the stage for jurisdictional conflicts, overlapping claims, as well as inconsistent regulation and permitting requirements.
• Renewable Energy and Power Purchase Agreements (PPAs): Supply-chain pressures, interconnection delays, grid capacity constraints, and permitting issues are expected to remain key challenges for renewable energy generation, and are likely to be the cause of many PPA disputes.
  
  

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.