The global energy transition is no longer a future objective – it is a construction program unfolding in real time. Energy disputes are often thought of as traditional commercial disputes involving oil and gas contracts, power purchase agreements, joint ventures, supply agreements, and other business relationships. But increasingly, some of the most consequential disputes in the energy sector arise from the construction of the infrastructure itself. American Arbitration Association® – International Centre of Dispute Resolution®’ s own caseload illustrates the overlap. In 2025, the AAA-ICDR administered 108 energy arbitrations under its Commercial and International Rules and another 92 energy-related disputes under its Construction Industry Arbitration Rules.
The intersection between the energy and construction industries is becoming increasingly important as governments and private industry across North America and around the world invest billions of dollars in renewable generation, battery storage systems, transmission expansion, advanced nuclear technologies, hydrogen production facilities, carbon capture projects, and the infrastructure necessary to support growing electricity demand, including demand associated with artificial intelligence and hyperscale data centers. These projects also carry heightened commercial expectations. Delays can affect not only project budgets but also financing milestones, tax incentives, power purchase agreements, regulatory compliance, and long-term energy reliability.
For today's owners, developers, contractors, utilities, lenders, and other project stakeholders, how disputes are managed and resolved can have significant consequences for project success.
The Energy Transition Is Reshaping Construction Risk
The evolving energy landscape is bringing new technologies and added complexity to infrastructure development. Developers are simultaneously managing:
Utility-scale solar and offshore wind developments
Battery Energy Storage Systems (BESS)
Transmission modernization and expansion
Small Modular Reactors (SMRs) and advanced nuclear facilities
Carbon Capture, Utilization, and Storage (CCUS)
Hydrogen production and transportation infrastructure
AI-driven hyperscale data centers requiring dedicated electrical capacity
These projects frequently bring together owners, EPC contractors, engineers, technology providers, utilities, manufacturers, environmental consultants, regulators, financiers, insurers, and local communities. Each may operate under separate agreements, technical standards, allocation-of-risk provisions, and commercial objectives. As a result, a disagreement arising in one part of the project can quickly affect other contractual relationships. A procurement delay, for example, may begin as a construction scheduling issue but ultimately affect commissioning, financing milestones, commercial operation dates, or contractual delivery obligations.
Technology and Project Complexity Can Add New Layers of Risk
Many energy infrastructure projects incorporate technologies and regulatory requirements that continue to evolve during project delivery. Battery technology, carbon capture systems, hydrogen infrastructure, advanced digital controls, and evolving cybersecurity or environmental requirements all can affect design, procurement, construction, and commissioning. Even well-managed projects may experience design revisions, procurement delays, equipment substitutions, permitting changes, interconnection challenges, or commissioning issues.
Many of these developments are not necessarily the result of poor performance; they may arise from changing requirements, evolving technology, or circumstances outside the parties' control. The challenge is ensuring that disagreements over responsibility, cost, and schedule are addressed before they begin affecting multiple aspects of the project.
The Cost of Waiting
Historically, many construction contracts have viewed dispute resolution as something that occurs after substantial project completion or after claims have matured. For today's energy infrastructure, that model often proves too late. When disagreements remain unresolved throughout construction, they can contribute to schedule delays, cumulative change orders, strained owner-contractor relationships, increased financing costs, delayed commercial operation, loss of tax credits or incentive programs, and significant legal expenses.
By the time arbitration or litigation begins, the commercial consequences of the underlying disagreement may already extend well beyond the original claim.
A Continuum of Dispute Management Options
One of the most significant developments in major infrastructure delivery has been the increasing emphasis on dispute avoidance rather than on dispute resolution alone. Major infrastructure projects can benefit from a range of dispute management mechanisms, depending on the nature and timing of the disagreement.
Rather than allowing issues to accumulate, project participants are increasingly incorporating structured mechanisms that encourage early communication and timely resolution.
These include:
Standing neutrals
Project mediators
Dispute Avoidance and Resolution Boards (DARBs)
Executive negotiations
Staged ADR provisions
These mechanisms are designed to keep projects moving while preserving business relationships and minimizing disruption. For many owners, avoiding a six-month delay may be substantially more valuable than prevailing in arbitration several years later.
Why AAA-ICDR's Multi-Tiered Approach Matters
No single ADR process is appropriate for every disagreement.
One of the strengths of the AAA-ICDR framework is its ability to support parties throughout the entire project lifecycle rather than only after disputes become formal claims.
For example:
During project planning, parties can incorporate thoughtfully designed dispute resolution clauses that provide a clear roadmap for addressing future disagreements.
During construction, standing neutrals or DARBs can help identify emerging issues, facilitate communication among stakeholders, and provide non-binding recommendations before disputes escalate.
When disputes cannot be resolved informally, mediation offers parties an opportunity to preserve commercial relationships while exploring creative business solutions that may not be available through litigation.
When a binding decision is required, arbitration provides an efficient, private, and flexible forum in which parties can select neutrals with experience in complex construction, engineering, environmental, and energy matters.
Rather than viewing these processes as competing alternatives, they function most effectively as complementary tools within an integrated dispute management strategy.
Dispute Avoidance in Practice
In practice, the right approach will depend on the nature of the issue and where the project stands.
For example, a battery storage project may face equipment delivery delays that affect the construction schedule. Rather than allowing the issue to develop into a larger delay claim, the parties may use a standing neutral or dispute board to address responsibility, mitigation, and next steps while work continues.
Similarly, on a carbon capture project, changes in regulatory requirements may require design modifications after construction has begun. A dispute board can help the parties address questions about cost and schedule impacts before those issues become more difficult to resolve.
Other disputes may be better suited for mediation, particularly where the parties have an ongoing business relationship or need flexibility to reach a practical solution. And where a binding decision is needed, arbitration remains an important part of the overall dispute resolution framework.
The objective is not to eliminate every dispute, but to ensure that the process used is proportionate to the issue and suited to the needs of the project.
Looking Ahead
The next decade is expected to produce one of the largest waves of infrastructure investment in modern history. Meeting the growing demand for reliable, resilient, and sustainable energy will require extraordinary engineering, financing, and collaboration.
Successful projects will not be those that avoid disagreements entirely – they will be those that manage disagreements effectively before they evolve into project-threatening disputes.
As projects become more interconnected, intentional dispute management should be part of project planning from the outset, rather than an afterthought once claims emerge. By leveraging a combination of standing neutrals, DARBs, mediation, and arbitration, project participants can create dispute management strategies that are as innovative and forward-looking as the infrastructure they are building.
For institutions such as the AAA-ICDR, the role extends beyond administering disputes after they arise. It also includes helping owners, contractors, designers, and project stakeholders build dispute management frameworks that preserve schedules, reduce risk, and support successful project delivery in an increasingly complex energy landscape.
References:
American Arbitration Association. Construction Industry Arbitration Rules and Mediation Procedures.
American Arbitration Association–International Centre for Dispute Resolution. Dispute Avoidance and Resolution Board (DARB) Procedures.
U.S. Department of Energy. National Transmission Needs Study.
U.S. Department of Energy. Pathways to Commercial Liftoff: Carbon Management.
U.S. Department of Energy. Hydrogen Program Plan.
U.S. Department of Energy, Office of Electricity. Energy Storage Grand Challenge Roadmap.
International Energy Agency. World Energy Investment 2025.
International Energy Agency. Electricity 2025.
Reuters. NextEra and Brookfield Plan $100 Billion AI Data Center Campus (2026).
World Bank. Dispute Boards in Construction Projects.