Regulatory and policy stability for renewable energy investment: An interdisciplinary analysis of the investment disputes against Spain

Abstract Regulatory and policy changes in the renewable energy sector in many European countries have disrupted investment stability in the sector. These changes have triggered legal disputes in which investors argued that host states have an obligation to maintain regulatory stability. However, a clear division in understanding the concept of regulatory and policy stability exists among different stakeholders, including states, investors, arbitral tribunals, political scientists, and legal scholars. This division has further created uncertainty for both renewable energy investors and host states. The former worry about their investments, and the latter fear more restrictions on their right to regulate. Consequently, this conceptual ambiguity can impact the flow of renewable energy investment, the quality of renewable energy regulations and policies, and the overall success of the decarbonisation process. To mend this gap, this article analyses the concept of ‘stability’ through an interdisciplinary lens. It uses renewable energy regulatory reforms in Spain as a case study to illustrate how different stakeholders define ‘a stable regulatory and policy environment’. The case study incorporates the legal interpretation of regulatory changes in Spain under international investment law and expands the discussion of the policy stability and durability literature. This provides a unique view of ‘stability’, connecting conceptual interpretations to real‐world cases. Fostering a common understanding of the concept of stability among various stakeholders enhances certainty and predictability for both states and investors in the context of renewable energy expansion and decarbonisation.