Civil Law and Virtual Power Plant Commercial Disputes in Europe

1. Introduction

A Virtual Power Plant (VPP) is not a single physical power station. It is a digitally coordinated portfolio of distributed energy resources—such as solar installations, wind turbines, batteries, electric vehicles, industrial loads, household demand-response units and sometimes conventional generators—which are controlled or aggregated through software and participate collectively in electricity markets.

A VPP operator may therefore simultaneously perform several legal roles:

electricity generator or market participant;

aggregator;

balance-responsible party;

balancing-service provider;

intermediary between distributed producers and suppliers;

software and control-system provider;

electricity trader;

operator of storage or demand-response assets.

EU electricity legislation expressly recognises aggregation as the combination of multiple customer loads or generated electricity for sale, purchase or auction in electricity markets. The Electricity Directive also requires Member States to facilitate demand-response aggregation and non-discriminatory participation of aggregators in electricity markets. (EUR-Lex)

Consequently, VPP disputes combine ordinary civil-law principles—contract, tort, damages, restitution, unjust enrichment, agency, property, confidentiality and software liability—with the highly regulated law of electricity markets.

A useful starting proposition is:

VPP commercial litigation is usually not a completely new category of civil law. It is traditional contract, property and tort law applied to a technologically integrated electricity-market relationship.

There is still relatively little reported European case law using the exact expression “virtual power plant dispute.” Therefore, the most useful authorities are cases concerning electricity aggregation, grid access, renewable generation, balancing, redispatching, market participation and electricity-system regulation, because those are the legal relationships from which VPP disputes arise.

2. What Is a Virtual Power Plant?

A simplified VPP may operate as follows:

Solar farms + batteries + wind turbines + industrial loads + EVs + household demand response

↓

Digital aggregation/control platform

↓

VPP operator

↓

Day-ahead market / intraday market / balancing market / ancillary-services market

↓

TSO / DSO / electricity supplier / off-taker

The VPP operator may promise to deliver a certain quantity of electricity or flexibility at a particular time.

The difficulty is that the underlying assets are independently controlled, geographically dispersed and subject to weather, network constraints, technical failures and consumer behaviour.

That produces distinctive civil disputes.

3. Principal Categories of VPP Commercial Disputes

The major disputes include:

VPP aggregation agreement disputes;

electricity purchase and sale disputes;

balancing and imbalance-settlement disputes;

grid-access and connection disputes;

curtailment and redispatching disputes;

battery and storage-performance disputes;

software and algorithm failures;

forecasting errors;

demand-response performance disputes;

ancillary-services disputes;

data and cybersecurity disputes;

intellectual-property disputes;

confidentiality and trade-secret disputes;

market-manipulation allegations;

renewable-energy certificate disputes;

liability between VPP operator and individual asset owners;

disputes concerning force majeure;

termination and change-of-law disputes;

damages arising from electricity-price volatility; and

cross-border jurisdiction and governing-law disputes.

4. European Legal Framework

4.1 Electricity Directive 2019/944

Directive 2019/944 is particularly important for VPPs.

It recognises:

active customers;

aggregation;

independent aggregators;

demand response;

flexibility;

customer participation in electricity markets.

Article 13 provides that customers should be able to purchase and sell electricity services, including aggregation services, independently from their electricity-supply contract. It also protects customers wishing to enter aggregation contracts without requiring consent from their existing electricity undertaking. (EUR-Lex)

Article 17 requires Member States to facilitate demand-response aggregation and requires TSOs and DSOs to treat aggregation participants non-discriminatorily alongside producers when procuring ancillary services. (EUR-Lex)

This creates an important civil-law consequence:

An aggregation contract cannot necessarily be interpreted in isolation from mandatory electricity-market regulation.

5. Electricity Balancing Regulation

Commission Regulation (EU) 2017/2195 establishes EU-wide rules concerning electricity balancing.

It covers:

procurement of balancing capacity;

activation of balancing energy;

settlement of balancing energy;

balance-responsibility arrangements;

imbalance settlement;

balancing-service providers;

cross-border balancing platforms.

The Regulation expressly defines a balance responsible party as a market participant or its chosen representative responsible for its imbalances. (EUR-Lex)

This is central to VPP litigation.

For example, if a VPP promises 100 MW of balancing capacity but its aggregated assets deliver only 65 MW, the resulting question may be:

Who bears the economic consequences of the 35 MW shortfall?

Depending on the contractual structure, liability may fall upon:

the VPP operator;

individual generators;

the battery operator;

the aggregator;

the balancing-service provider;

another balance-responsible party.

6. Regulation 2019/943 and VPP Participation

Regulation 2019/943 requires balancing markets to facilitate non-discriminatory access for:

generation;

storage;

demand response;

variable renewable energy;

aggregated market participants.

The Regulation specifically requires balancing markets to permit participation individually or through aggregation. (EUR-Lex)

This is important because a VPP can no longer easily be treated as merely an informal intermediary. Its participation can have direct market consequences.

7. Civil-Law Character of VPP Contracts

A typical VPP contractual structure can contain several interconnected contracts.

A. Asset-owner agreement

The generator agrees to make its production available to the VPP.

B. Aggregation agreement

The VPP obtains authority to combine multiple assets.

C. Market-participation agreement

The VPP participates in electricity or balancing markets.

D. Grid connection agreement

The underlying assets maintain relationships with DSOs or TSOs.

E. Software agreement

A technology company provides forecasting, optimisation or dispatch software.

F. Power purchase agreement

The VPP or another market participant purchases electricity.

G. Battery services agreement

A storage operator provides flexibility or balancing capacity.

A failure at one level can therefore create a chain of civil claims.

8. Case Law 1 — VEMW and Others v Netherlands, C-17/03

Case

Vereniging voor Energie, Milieu en Water and Others v Directeur van de Dienst uitvoering en toezicht energie, Case C-17/03, EU:C:2005:362

Facts

The case concerned preferential access to electricity transmission capacity for an undertaking that had previously been responsible for public-service electricity activities.

There were also long-term electricity contracts predating market liberalisation.

Legal issue

The Court examined whether preferential treatment of certain electricity contracts was compatible with the developing liberalised electricity market.

Decision

The Court addressed the principles of:

non-discrimination;

market opening;

protection of legitimate expectations;

legal certainty.

(EUR-Lex)

Importance for VPPs

This case is relevant when a VPP argues that it should receive preferential access to:

transmission capacity;

balancing capacity;

market infrastructure; or

network services

because of an existing contractual relationship.

A VPP contract cannot automatically override principles of non-discriminatory market access.

Civil-law lesson

Contractual rights must coexist with mandatory electricity-market rules.

9. Case Law 2 — citiworks AG, C-439/06

Case

citiworks AG v Flughafen Leipzig/Halle GmbH and Bundesnetzagentur, Case C-439/06, EU:C:2008:298

Facts

The dispute concerned an electricity system serving Leipzig/Halle Airport and whether it could benefit from an exemption from the requirement to provide open third-party access.

Issue

Could national law exempt certain electricity systems from open-access obligations without adequately considering technical capacity?

Judgment

The Court interpreted the electricity-market rules concerning third-party access to transmission and distribution systems.

It emphasised the importance of genuine open access to electricity networks. (EUR-Lex)

Relevance to VPPs

A VPP may need access to:

distribution networks;

transmission networks;

balancing platforms;

metering systems;

flexibility markets.

If a DSO refuses access on discriminatory or legally unsupported grounds, the VPP may challenge the refusal.

Civil-law significance

A contractual arrangement granting network access may be invalid or unenforceable if it conflicts with mandatory network-access rules.

10. Case Law 3 — Essent Netwerk Noord, C-206/06

Case

Essent Netwerk Noord BV and Others, Case C-206/06, EU:C:2008:413

Facts

The dispute concerned Dutch electricity legislation permitting a surcharge associated with electricity transmission and stranded-cost financing.

Issues

The Court considered:

electricity-market charges;

discrimination;

state aid;

national electricity-market regulation.

(InfoCuria)

VPP relevance

VPP operators frequently calculate commercial returns based on:

network charges;

balancing charges;

market fees;

taxes;

renewable subsidies;

flexibility payments.

A change or unlawful imposition of a market charge can therefore generate substantial contractual disputes.

Civil-law principle

If a VPP agreement contains a pass-through clause, the parties may litigate over whether a new regulatory charge should be borne by:

the VPP operator;

the asset owner;

the customer;

the supplier.

This makes allocation-of-risk clauses extremely important.

11. Case Law 4 — Ålands Vindkraft, C-573/12

Case

Ålands vindkraft AB v Energimyndigheten, Case C-573/12, EU:C:2014:2037

Facts

Ålands Vindkraft operated renewable electricity generation. It challenged the Swedish green-certificate scheme because certificates were not granted to certain renewable electricity installations located outside Sweden.

Issue

The dispute concerned the interaction between:

renewable-energy support;

free movement of goods;

national renewable-energy schemes.

Judgment

The Court considered the compatibility of the Swedish support mechanism with EU internal-market principles. (EUR-Lex)

VPP relevance

VPPs often aggregate renewable installations across different locations.

A VPP may therefore have assets:

in different Member States;

subject to different support systems;

generating electricity carrying different guarantees or certificates of origin.

A dispute may arise over whether a particular asset is entitled to a subsidy or renewable certificate.

Civil-law consequence

If the VPP's revenue model depends upon those certificates, a regulatory loss may produce a contractual claim for:

breach of warranty;

misrepresentation;

failure to obtain permits;

failure to satisfy regulatory conditions;

indemnification.

12. Case Law 5 — Green Network, C-66/13

Case

Green Network SpA v Autorità per l'energia elettrica e il gas, Case C-66/13, EU:C:2014:2399

Facts

The case concerned Italian rules relating to renewable electricity and certificates demonstrating the renewable origin of electricity imported from outside the EU.

Issue

The Court considered the relationship between national renewable-energy certification arrangements and EU competence.

Decision

The Court held that EU law could preclude certain national arrangements involving bilateral agreements concerning renewable-energy guarantees. (EUR-Lex)

VPP significance

A cross-border VPP may rely upon:

guarantees of origin;

renewable-energy certificates;

cross-border electricity transactions.

A contractual promise that electricity possesses a particular “green” status may therefore have legal significance beyond ordinary contractual description.

Example

Suppose:

VPP operator A agrees to supply Company B with 50,000 MWh of renewable electricity and corresponding guarantees of origin.

If the certificates cannot legally be transferred or recognised in the relevant jurisdiction, B may seek:

damages;

price reduction;

termination;

restitution;

contractual indemnity.

13. Case Law 6 — Fondul Proprietatea, C-179/20

Case

Fondul Proprietatea SA v Guvernul României and Others, Case C-179/20, EU:C:2022:58

Facts

The dispute concerned Romania's electricity system and questions involving:

priority dispatch;

electricity-grid access;

security of supply;

guaranteed access;

state aid.

Judgment

The Court examined how EU electricity-market rules interact with priority dispatch and access to electricity networks. (EUR-Lex)

VPP significance

This is particularly relevant to VPPs combining:

renewable generation;

storage;

flexible demand.

A VPP may argue that particular assets should receive priority treatment, while the DSO/TSO may invoke:

grid security;

congestion;

system reliability;

network limitations.

Civil-law question

If a VPP loses revenue because a DSO curtails its portfolio, litigation may ask:

Was the curtailment contractually permitted and legally justified?

The answer depends on the connection agreement, market rules and mandatory EU electricity law.

14. Case Law 7 — EEW Energy from Waste, C-580/21

Case

EEW Energy from Waste Großräschen GmbH v MNG Mitteldeutsche Netzgesellschaft Strom GmbH, Case C-580/21, EU:C:2023:304

Facts

The dispute originated in Germany and involved electricity produced using both renewable and conventional energy sources.

The question concerned priority access to electricity networks.

Judgment

The Court held that priority access for renewable electricity could apply to installations producing both renewable and conventional electricity, but only in relation to the renewable proportion, subject to detailed transparent and non-discriminatory national rules. (EUR-Lex)

Importance for VPPs

Many VPP portfolios are technologically mixed.

For example:

A VPP may therefore have to establish which portion of its portfolio qualifies for particular regulatory treatment.

Civil-law consequence

Where a contract promises “priority renewable dispatch,” the parties must determine exactly what that contractual promise covers.

15. Case Law 8 — TenneT TSO GmbH and TenneT TSO BV v ACER, T-482/21

Case

TenneT TSO GmbH and TenneT TSO BV v ACER, Case T-482/21, EU:T:2024:650

Facts

The dispute concerned the European electricity internal market and ACER's methodology for sharing the costs of:

redispatching;

countertrading;

managing network congestion.

Judgment

The General Court examined the legality and reasoning of ACER's methodology under Regulation 2019/943. (EUR-Lex)

VPP significance

Redispatching is highly relevant to VPPs.

A VPP may receive a market instruction to reduce or increase generation/consumption because the network is congested.

The resulting commercial question may be:

Who bears the financial consequences?

EU electricity law provides for financial compensation in specified redispatching situations. Regulation 2019/943 requires market-based redispatching where applicable and establishes compensation principles for non-market-based redispatching. (Legislation.gov.uk)

Civil-law importance

The case demonstrates that a dispute concerning an apparently “contractual” financial loss may actually depend upon the legality of the underlying regulatory methodology.

16. Case Law 9 — Swissgrid v European Commission, C-121/23 P / T-127/21

Case

Swissgrid AG v European Commission, Case C-121/23 P

Subject

The dispute concerned Swissgrid's participation in European electricity-balancing platforms under Regulation 2017/2195.

The Court of Justice issued judgment on 13 February 2025, while the General Court subsequently dealt with the remitted proceedings. (InfoCuria)

Importance

This litigation demonstrates the importance of:

cross-border balancing;

access to European balancing platforms;

the geographic scope of electricity-market rules;

participation by system operators outside the EU.

The General Court's 2026 judgment in the remitted case annulled the Commission's refusal concerning Swiss participation in European balancing platforms. (InfoCuria)

VPP relevance

A VPP operating across borders may encounter similar questions.

For example:

Can a VPP located partly outside the EU participate in an EU balancing platform?

Or:

Can a VPP's balancing capacity be recognised across a national border?

Such issues can directly affect commercial performance under VPP contracts.

17. Case Law 10 — Polskie Sieci Elektroenergetyczne and Others v ACER, Joined Cases C-281/23 P and C-282/23 P

The Court of Justice decided these appeals in 2025 concerning European platforms for the exchange of balancing energy.

The litigation involved:

mFRR balancing;

aFRR balancing;

European balancing platforms;

cross-zonal capacity;

TSO obligations;

ACER's regulatory decisions.

(Publications Office of the EU)

This is particularly significant for VPPs because a technologically sophisticated VPP may aggregate thousands of small assets and offer their flexibility into exactly these balancing markets.

18. The Most Important VPP Civil-Law Dispute: Imbalance Liability

Suppose a VPP contracts to provide:

100 MW from 18:00–19:00

It forecasts:

40 MW solar;

20 MW battery discharge;

15 MW industrial demand reduction;

25 MW other flexible resources.

But an unexpected cloud event reduces solar generation by 15 MW.

Actual delivery becomes:

85 MW rather than 100 MW.

The VPP incurs an imbalance charge.

The dispute could be between:

Asset owner and VPP

“Your solar forecast was inaccurate.”

VPP and software provider

“Your forecasting algorithm was defective.”

VPP and TSO

“The imbalance calculation was incorrect.”

VPP and customer

“You promised 100 MW of flexibility.”

VPP and insurer

“The failure resulted from an insured technical event.”

Regulation 2017/2195 specifically provides for calculation and settlement of imbalances involving balance-responsible parties. (EUR-Lex)

19. Forecasting-Error Disputes

Forecasting is fundamental to VPP operations.

A VPP may use AI or machine-learning systems to predict:

solar production;

wind production;

electricity demand;

battery availability;

EV charging;

industrial flexibility.

A forecasting agreement should therefore specify:

forecast accuracy;

measurement methodology;

acceptable error margin;

data source;

update frequency;

weather-data provider;

algorithm modification;

responsibility for erroneous data;

liability cap;

consequential damages.

Without these provisions, ordinary civil-law principles become critical.

20. Software Liability

A VPP can be heavily dependent upon software.

Suppose the software incorrectly dispatches 500 batteries simultaneously.

The result is:

grid instability;

market imbalance;

penalty;

lost revenue;

battery degradation;

regulatory investigation.

Possible claims include:

Contractual liability

The software provider failed to perform according to specifications.

Professional negligence

The software developer failed to exercise reasonable technical care.

Product/service liability

Depending on the applicable national and EU regime, defective software may raise additional liability questions.

Indemnification

The VPP operator may seek reimbursement for penalties imposed because of the software failure.

21. Battery Degradation Disputes

VPPs increasingly depend upon batteries.

A battery owner may claim:

“The VPP used my battery more aggressively than contractually permitted.”

The VPP may respond:

“The battery was contracted for ancillary services and the additional cycling was commercially foreseeable.”

The contract should therefore distinguish:

normal cycling;

emergency cycling;

balancing activation;

frequency-response operation;

state-of-charge requirements;

degradation;

replacement cost.

Otherwise, damages may become extremely difficult to calculate.

22. Curtailment and Redispatching

Curtailment occurs where generation is reduced because the network cannot safely accommodate the electricity.

For a VPP, curtailment can be particularly complicated because the portfolio may contain hundreds of assets.

Regulation 2019/943 provides important rules concerning redispatching and financial compensation. It requires market-based approaches in specified circumstances and provides compensation rules for non-market-based redispatching. (Legislation.gov.uk)

A civil claim could therefore concern:

lost electricity sales;

lost balancing revenue;

lost renewable certificates;

battery opportunity costs;

contractual penalties;

consequential business losses.

23. VPP Power Purchase Agreements

A VPP may enter a long-term power purchase agreement.

Typical clauses include:

contracted quantity;

delivery point;

pricing formula;

negative-price treatment;

imbalance allocation;

force majeure;

curtailment;

guarantees of origin;

change in law;

termination;

liability cap.

Example

A VPP promises 50 MW every hour.

A regulatory change makes some of the underlying generators unavailable.

The VPP may argue:

“This is change in law.”

The buyer may respond:

“The contract contains an absolute delivery obligation.”

The court must then distinguish between:

contractual risk;

regulatory impossibility;

force majeure;

frustration or equivalent national doctrines;

ordinary commercial risk.

24. Demand-Response Aggregation Disputes

VPPs may aggregate consumers rather than only generators.

For example:

factories reduce production;

supermarkets adjust refrigeration;

office buildings modify HVAC;

EVs delay charging;

batteries discharge.

Directive 2019/944 expressly provides for aggregation and requires Member States to create mechanisms concerning disputes and responsibility for imbalances. (EUR-Lex)

This is a major civil-law development.

A consumer may claim:

“The aggregator caused my electricity supplier to impose a charge.”

The supplier may claim:

“The aggregator's activation disrupted my balance position.”

The aggregator may respond:

“The supplier's charge is inconsistent with the statutory aggregation framework.”

The legal relationship can therefore involve three or more parties.

25. Compensation and Indemnification

VPP contracts should carefully allocate:

Direct losses

Usually easier to recover.

Indirect losses

More difficult and often excluded.

Consequential losses

Frequently limited by contract.

Lost profits

Potentially substantial because electricity prices can fluctuate dramatically.

Regulatory penalties

Particularly contentious.

A clause might state:

“The VPP operator shall indemnify the asset owner for regulatory penalties caused by the operator's failure to comply with balancing-market obligations.”

The court must then determine whether the particular penalty falls within the contractual indemnity.

26. Force Majeure in VPP Contracts

Traditional force-majeure clauses can be inadequate for VPPs.

Possible events include:

extreme weather;

grid blackout;

cyberattack;

DSO outage;

TSO emergency instruction;

cloud-service failure;

telecommunications failure;

battery-management-system failure;

ransomware;

electricity-market suspension;

regulatory intervention.

The key issue is causation.

For example:

A wind farm stops generating because of low wind.

That is generally a normal production risk.

But:

A TSO disconnects the wind farm because of a regional emergency.

That may be treated differently.

27. Cybersecurity and VPP Liability

Because VPPs are digitally interconnected, cyber incidents can produce civil claims.

Suppose an attacker obtains access to the VPP control platform and:

discharges batteries;

shuts down generation;

submits false market bids;

alters meter data;

creates artificial imbalances.

Potential defendants include:

software provider;

cloud provider;

cybersecurity contractor;

VPP operator;

telecommunications provider.

Potential remedies include:

damages;

injunction;

specific performance;

restoration of data;

contractual indemnification;

confidentiality remedies.

28. Data Ownership and Metering Disputes

A VPP requires large quantities of data.

Examples include:

generation data;

consumption data;

battery state of charge;

weather data;

meter readings;

customer profiles;

market bids;

dispatch instructions.

A dispute may arise over:

Who owns the data?

More precisely, the issue may concern:

contractual access;

database rights;

confidentiality;

personal data;

trade secrets;

cybersecurity;

permitted commercial use.

A VPP agreement should therefore distinguish operational data, personal data, market data, derived analytics and proprietary algorithms.

29. Intellectual Property Disputes

VPP technology can involve:

software;

algorithms;

APIs;

optimisation models;

forecasting models;

battery-management software;

digital-twin technology.

Suppose a VPP operator commissions software from Company X.

Company X later claims ownership of the optimisation algorithm.

The VPP operator argues:

“We paid for development, therefore we own it.”

That conclusion does not necessarily follow.

Ownership depends on:

assignment clauses;

employment rules;

commissioned-development provisions;

copyright law;

database rights;

trade-secret law;

patent rights;

contractual licence scope.

30. Unjust Enrichment in VPP Litigation

Unjust enrichment can become relevant when contractual relationships fail.

Example

A VPP mistakenly receives €2 million in balancing payments because the market settlement system incorrectly attributes capacity to the VPP.

The contract may not contain an adequate recovery clause.

The affected party may seek:

restitution / unjust enrichment.

Similarly, if a VPP pays an asset owner twice for the same flexibility service, restitution may be available under the applicable national law.

31. Agency and Authority Problems

A VPP operator may act as an agent for numerous asset owners.

The operator might:

submit bids;

conclude PPAs;

enter balancing markets;

accept dispatch instructions;

communicate with TSOs.

A dispute may arise if the VPP operator exceeds its authority.

Example:

The asset owner authorises participation in the day-ahead market but not in the balancing market.

The VPP nevertheless submits balancing bids.

Questions arise concerning:

actual authority;

apparent authority;

ratification;

liability to third parties;

internal indemnification.

These are classical civil-law and commercial-law issues adapted to the electricity sector.

32. Market Manipulation and Bad-Faith Conduct

VPPs can control large aggregated portfolios.

This creates potential allegations of:

strategic bidding;

artificial scarcity;

withholding;

false availability;

manipulation of balancing prices;

misuse of market information.

The civil-law consequences may include:

damages;

restitution;

contractual termination;

indemnity claims;

regulatory sanctions.

The legal analysis may involve both private law and EU energy-market regulation.

33. Guarantees of Origin and Green-Energy Claims

A VPP may sell electricity together with guarantees of origin.

Disputes can arise if:

certificates are unavailable;

certificates are invalid;

certificates are double-counted;

electricity is incorrectly represented as renewable;

certificates are not transferable;

the buyer cannot use them for its sustainability claims.

The Green Network case demonstrates that renewable-electricity certification has a significant EU-law dimension and cannot simply be treated as an ordinary private commercial certificate. (EUR-Lex)

34. Property and Ownership of Electricity

Electricity itself is unusual from a civil-law perspective because it cannot easily be treated like an ordinary movable asset after injection into the grid.

The legal system therefore tends to focus on:

contractual entitlement;

metered quantities;

delivery obligations;

financial settlement;

balancing positions;

guarantees of origin;

capacity rights.

Consequently, a VPP dispute is normally less about physically identifying “whose electricity” travelled through a particular wire and more about which party bears the contractual and financial position associated with the electricity transaction.

35. Measurement and Metering Disputes

Measurement is critical.

Suppose:

VPP's meter = 80 MWh;

DSO's meter = 70 MWh;

market settlement meter = 75 MWh.

Which number controls?

A well-drafted VPP agreement should specify:

approved meter;

calibration standards;

data hierarchy;

meter-error procedure;

correction period;

independent expert procedure;

provisional settlement;

final settlement.

Without such provisions, litigation can become a technical accounting dispute.

36. Limitation of Liability

VPP contracts often involve very large potential losses.

A software error lasting only 30 minutes could potentially cause millions in market losses.

Therefore contracts frequently include:

aggregate liability caps;

per-event caps;

exclusions of lost profit;

exclusions of consequential loss;

cyber-risk exclusions;

regulatory-penalty provisions;

indemnities.

Courts will generally analyse these clauses under the applicable national contract law and mandatory controls on unfair or unreasonable exclusion clauses.

37. Jurisdiction and Applicable Law

Cross-border VPPs create complex jurisdiction questions.

Imagine:

VPP operator — Germany;

solar generators — Spain;

battery operator — France;

software provider — Netherlands;

TSO — Belgium;

electricity buyer — Italy.

There may be several contracts with different governing laws.

The parties should therefore clearly specify:

governing law;

jurisdiction;

arbitration;

expert determination;

emergency injunctive relief;

applicable market rules.

EU private international law can determine the applicable law and jurisdiction where the contract does not provide a clear answer.

38. Comparative Case-Law Table

39. Key Legal Principles Emerging from the Case Law

The cases collectively support several important principles.

Principle 1 — VPP participation must be non-discriminatory

Electricity-market access cannot generally be restricted arbitrarily.

citiworks and VEMW are particularly important here. (EUR-Lex)

Principle 2 — Grid access is heavily regulated

A private contract cannot simply displace mandatory network-access rules.

Principle 3 — Renewable status has legal consequences

The Ålands Vindkraft and Green Network decisions demonstrate the regulatory importance of renewable-electricity certification. (EUR-Lex)

Principle 4 — Priority access is not absolute

Grid security and system reliability remain important.

Fondul Proprietatea and EEW demonstrate the importance of balancing renewable-energy access against electricity-system requirements. (EUR-Lex)

Principle 5 — Redispatching can create compensation claims

The EU electricity framework recognises compensation in relevant redispatching circumstances. (Legislation.gov.uk)

Principle 6 — Balancing creates financial responsibility

Balance-responsible parties bear financial consequences for imbalances under the EU balancing framework. (EUR-Lex)

Principle 7 — Cross-border VPPs face additional regulatory complexity

Swissgrid and the European balancing-platform litigation demonstrate the significance of cross-border market participation. (InfoCuria)

40. Hypothetical VPP Commercial Dispute

Consider EuroFlex VPP GmbH.

It aggregates:

50 solar farms;

10 wind farms;

300 batteries;

2,000 EVs;

20 industrial consumers.

EuroFlex agrees to supply 200 MW of flexibility to a TSO.

During a severe heatwave:

solar output falls unexpectedly;

several batteries reach minimum state of charge;

industrial consumers refuse further load reduction;

the forecasting software fails;

the VPP delivers only 110 MW;

the TSO purchases replacement balancing energy;

EuroFlex receives a €4 million imbalance bill.

Three lawsuits follow.

Claim 1 — TSO v EuroFlex

The TSO seeks payment of the imbalance.

Claim 2 — EuroFlex v software company

EuroFlex alleges defective forecasting software.

Claim 3 — EuroFlex v asset owners

EuroFlex argues that individual owners breached their availability obligations.

The court would need to analyse:

the aggregation contract;

balancing rules;

technical performance standards;

causation;

contractual limitation clauses;

force majeure;

regulatory obligations;

expert evidence;

actual market losses.

This illustrates why VPP litigation is inherently multi-contractual and multi-regulatory.

41. Remedies Available in VPP Commercial Litigation

Depending on national law, parties may seek:

1. Damages

For:

lost revenue;

imbalance charges;

repair costs;

additional balancing costs;

market losses.

2. Specific performance

For example, requiring delivery of contracted flexibility where legally and technically possible.

3. Termination

For material breach.

4. Restitution

For payments made without legal or contractual basis.

5. Injunctions

To prevent:

disclosure of confidential algorithms;

unauthorised use of data;

wrongful termination;

interference with market participation.

6. Declaratory relief

To establish:

contractual rights;

ownership;

liability allocation;

interpretation of performance obligations.

7. Expert determination

Especially valuable for:

metering;

forecasting;

battery degradation;

imbalance calculations;

grid capacity.

42. Important Contract-Drafting Issues for European VPPs

A sophisticated VPP contract should contain separate provisions for:

A. Portfolio availability

What percentage of assets must be available?

B. Forecast accuracy

What error rate is acceptable?

C. Dispatch authority

Who can control the assets?

D. Market participation

Which markets may the VPP enter?

E. Imbalance responsibility

Who pays imbalance charges?

F. Curtailment

Who bears curtailment losses?

G. Redispatching

Who receives compensation?

H. Battery degradation

Who pays for accelerated degradation?

I. Data

Who owns and may use operational data?

J. Cybersecurity

Who is responsible for cyber incidents?

K. Software

Who owns the algorithms?

L. Regulatory change

What happens if electricity-market rules change?

M. Force majeure

Which technical and grid events qualify?

N. Liability cap

What is the maximum exposure?

O. Dispute resolution

Court, arbitration or expert determination?

43. Why VPP Disputes Are Different from Traditional Power-Plant Litigation

Traditional power-plant litigation normally concerns one principal physical asset.

VPP litigation is different because:

One legal relationship → many physical assets → many contracts → one digital control system → multiple electricity markets.

A single software error can simultaneously affect:

500 batteries;

100 solar installations;

thousands of consumers;

several balancing transactions.

The economic consequences can therefore be multiplied across the portfolio.

44. Overall Legal Assessment

European VPP commercial disputes sit at the intersection of civil law, energy law, contract law, technology law and EU internal-market regulation.

The most important legal principle is that the VPP operator cannot be viewed merely as an ordinary commercial intermediary.

Its obligations may arise simultaneously from:

the VPP aggregation agreement;

electricity-supply contracts;

grid-access agreements;

balancing-market rules;

renewable-energy legislation;

national energy regulation;

software agreements;

data and cybersecurity obligations;

tort/negligence principles;

EU internal-market law.

The European case law—from VEMW, citiworks, Essent Netwerk Noord, Ålands Vindkraft, Green Network, Fondul Proprietatea, EEW, TenneT, Swissgrid and the European balancing-platform cases—shows that electricity-market rights are increasingly shaped by principles of non-discrimination, transparent market access, grid security, regulatory consistency, financial responsibility and fair allocation of network costs. (EUR-Lex)

For VPP operators, the most significant private-law risks are therefore imbalance liability, forecasting failures, contractual availability, grid curtailment, redispatching, battery degradation, software defects, data misuse, regulatory changes and cross-border market access.

Conclusion

Virtual power plant commercial litigation in Europe is an emerging form of complex commercial litigation rather than a wholly separate branch of civil law. The traditional doctrines of contract, damages, restitution, agency, negligence, unjust enrichment, confidentiality and intellectual property remain applicable, but their operation is heavily influenced by EU electricity-market legislation.

The most important development is the EU's recognition of aggregation and flexibility as legitimate electricity-market activities. Directive 2019/944 gives customers and aggregators rights to participate in electricity markets, while the balancing and internal-electricity-market regulations establish rules governing balancing responsibility, market access and redispatching. (EUR-Lex)

Accordingly, future VPP litigation in Europe is likely to concentrate on who controls aggregated assets, who bears imbalance risk, who owns the data and software, who pays for technical failure, how curtailment losses are allocated, and how contractual rights interact with mandatory electricity-market rules.

The central civil-law lesson is therefore:

In a European VPP dispute, the court must read the private contract together with the mandatory architecture of the electricity market. A contractual allocation of risk that ignores grid-access, balancing, aggregation, redispatching or renewable-energy rules may be ineffective, incomplete or subject to mandatory statutory limitations.