Kirin Kalsi is General Counsel, Compliance Officer and Data Protection Officer at E.ON UK, part of the E.ON Group, one of the largest operators of energy networks and infrastructure in Europe. She tells In-House Perspective how her team learnt to expect the unexpected through its work in the pandemic and the energy crisis, and about how lawyers can assist in reaching net zero.

Having grown up on the outskirts of Munich, Kirin Kalsi gained her degree, in Law with German Law, in London, but found herself nearer home while studying abroad at the University of Passau in Bavaria as part of her course. She credits her father with being influential in setting her off in the direction of law. ‘He’d attended a meeting as part of his job and they’d had lawyers as part of that meeting, and the in-house lawyer had turned up,’ she explains. ‘He said, “Look, [law] might be an avenue for you.” I really don't know how he had that inkling, but I think it was a sixth sense […] and by some complete fluke I ended up in an in-house legal career. It suits me to a tee.’

Following her studies, Kalsi received a training contract at Clarks, a medium-sized law firm in Reading, in the UK. Here she encountered a variety of work – she recalls how the firm’s trainees spent half a day sitting at the reception desk and regularly carried out tasks such as sorting the post. She says this environment illustrated the workings of a law firm better than simply being at a desk. She worked broadly in commercial law, including contracts and litigation, and attended HR tribunals and other hearings ‘that you just get thrown into. And nowadays, especially if you train at one of the larger firms, you do not get that experience,’ she says.

After qualifying she joined the firm Wragge & Co (now Gowlings), initially as part of the commercial team, and engaged in areas of the law including intellectual property and competition. From there she moved into energy, entering the field at a time of considerable growth for the sector. Here she worked with Powergen, which later became her current employer E.ON.

An opportunity arose for a secondment with E.ON, working on a specific product. ‘I came to E.ON and after about two months, I’d already decided this was it. I’d found my home,’ she says. ‘It was a combination of being in-house and also being a core member of a project team, or a team that is there to deliver something. [It was about] really getting to grips with the strategy and why we're doing things and then seeing things through, not just from where the contract needs drafting and then signed, but actually seeing things through right from start to finish and then even post-finish.’

The secondment was later extended and then in 2008 Kalsi officially joined E.ON, handling work from commercial support to gas storage. She applied for the position of Head of Legal in 2014, and has accumulated responsibilities since then, with compliance later being added to her role, while thanks to a restructuring a few years ago, she became E.ON UK’s data protection officer and the company’s staff in this area were integrated into Kalsi’s team. As part of this restructure, she also became general counsel.

Additions and restructurings

When Kalsi began in the role of Head of Legal, her team consisted of 12 lawyers in the UK, including her. At that point, E.ON still possessed a large generation business and a significant renewables business as well. Since then, the company has seen two major restructures group-wide: the first involved separating out its conventional generation assets and selling them to energy company Uniper. A later restructure saw E.ON remaining a customer retail business and networks business, while disposing of their renewables, for example wind farms, which were sold to German electricity generation company RWE. Meanwhile, RWE’s retail business joined E.ON. These developments – and the addition of the data protection personnel – have meant that Kalsi’s team has expanded to 32 people.

The team includes lawyers working across areas such as residential and small and medium-sized businesses (SMEs); energy procurement functions; residential solutions – which relates to products such as batteries in people’s homes; business-to-business (B2B) solutions – solar panels at a football club, for example; E.ON’s district heating network, through which single energy centres provide energy to estates; city solutions; special projects, including M&A work; and data protection. Kalsi is insistent that the team doesn’t operate in a silo. ‘Everybody helps each other out because you may have one area that’s particularly busy and another one is quieter. You may have some expertise that sits in one area, but actually needs to be widened across and looked after in other areas as well,’ she says. ‘So we’re really keen on ensuring people don’t just do one narrow piece of work, but have the opportunity and the flexibility to do other things,’ while also ‘making the best use of people's skill sets.’

The area in which Kalsi has seen the most growth is what E.ON calls its Energy Solutions business – including solar panels, energy efficient lighting and homes, even charging. ‘That’s where we really see the future,’ she explains. ‘And it starts with a smart meter in your home that then enables you to run and manage your energy consumption and be more energy efficient. In the whole net zero context, we've been very open around how we don't just want to achieve net zero by 2050, we want to achieve it sooner, and we want to support our customers to achieve it as well.’

On a practical level, Kalsi gives the example of E.ON supporting both B2B and residential customers with energy efficiency measures, such as a solar panel and battery in a customer’s home. ‘E.ON would install this for the customer and can offer a financing package for it for residential customers too,’ explains Kalsi. ‘And then you can store the energy during the day, you can use it when you need it.’

Encountering the unexpected

Kalsi’s team find themselves involved in all of E.ON’s activities in the UK, the majority of which consists of contracting work and in supporting regulatory discussions. This work is taking place against the backdrop of the ongoing energy crisis and in a period of change for the industry, which has caused significant challenges: some 29 energy companies were declared insolvent in 2021-22, for instance. These circumstances have ‘created a lot of work which needs [an understanding of] the regulatory context and dealing with Ofgem [the UK’s energy regulator],’ says Kalsi.

Given the energy crisis, Ofgem has been looking at the energy business as a whole and at how to make getting into the sector more stable, and as such they have issued a number of consultations. ‘These need ploughing through and we have a separate regulatory team that tend to do the initial going through of the consultations, but we will support them with any of the legal aspects of it all, and if they need a second view,’ she says.

There’s a dimension to the work that requires keeping pace with the UK’s political environment, which has moved particularly quickly over the past few years. ‘We’ve had the political ups and downs, with three prime ministers and four chancellors last year,’ highlights Kalsi. Her team need to assess what each government budget announcement will bring and assess how it’ll affect E.ON’s contracts and customers. ‘Our colleagues will look at the strategic piece, but we then need to implement it into any contracts and the arrangements we have,’ she says.

Reflecting on the last few years, Kalsi highlights that even previously innocuous parts of contracts have taken on new meaning. The work ‘doesn’t stop when you have signed the contract. You may have signed a contract three years ago, but with all this change, you need to look at it frequently to work out, what does it mean now? What happens now?’ She says that in the past three years, her team have looked at force majeure clauses more than ever before, first with the pandemic, then with the energy crisis.

These ‘boilerplate’ clauses are found in most contracts but prior to the past few years, have tended to be glanced over and not read again. This has now changed. ‘We have had suppliers who have looked at [these clauses] and have said, look, we can't claim on the force majeure clause, but actually this contract is no longer viable for us because we didn't just have the pandemic and then the energy crisis – in the middle of all of that, we also had Brexit,’ says Kalsi.

Another clause that Kalsi suggests people are now paying more attention to is the change of law clause, which typically appears in contracts lasting longer than a few years in order to cover off unpredictable events in the future. As the pandemic began, Kalsi says these clauses were suddenly being scrutinised and people were asking, ‘well, is this a change of law, because the government has brought in legislation, and what actually happens?’ Post-pandemic, people are more cautious about these clauses, she notes.

‘We’ve also found recently that a contract might say one thing, but if it doesn't work in a new climate and you still want to have a relationship, whether it's with a customer or with a supplier, you then need to just work out what should it say instead,’ she says. ‘So a lot of renegotiation rather than saying we're going to stick to our contract and then the contract no longer works for one side.’

‘We have hopefully got a bit more used to trying to deal with the unexpected,’ says Kalsi, giving the example of the pandemic and the related lockdowns. During the pandemic, E.ON had ‘lots of customers who suddenly needed no energy at all [such as] hotels and retail,’ which meant assessing, ‘So what do you do then? And then obviously as a business, we have planned for that income, so what do we do? So it has been quite a rollercoaster ride.’

Brexit’s impact

Part of the mix alongside the pandemic and energy crisis has been the UK’s departure from the EU in January 2020 and the end of the departure period later that year. Kalsi has headed up E.ON’s Brexit Working Group and highlights three areas in which she has seen the most significant effects on the business. The first is the impact on people, as Brexit has made everything from business travel to secondments more ‘clunky’, and people are now ‘a little bit more reluctant to [travel], especially for example our German colleagues who [pre-Brexit] could just travel into the UK using their ID card and now need a valid passport,’ explains Kalsi.

The second area concerns monitoring how legislation is developing now that the UK has gone its own way. Whereas before the EU legislation was in place and everyone knew what it was, ‘We obviously have the UK version of things and we are constantly keeping an eye on [whether] things are going to change or deviate from what is happening in Europe,’ says Kalsi. Here, she mentions data protection – where the UK government has suggested changes are coming but is currently still closely aligned to the EU – and product liability, where ‘if we are procuring goods at a group level and we then need special requirements for the UK, it could be EV charging stations, it could be solar panels, anything, we may need to do an extra step in the UK. So we're still keeping an eye on that and whether that affects how we operate’.

Finally, there are ongoing issues with supply chains, which emerged during the pandemic but which have been exacerbated by the additional paperwork, among other things, that have resulted from Brexit. Kalsi explains that it’s ‘quite difficult to pinpoint what is Brexit-linked directly and what is pandemic-related because the two have merged together. But they haven't helped each other’.

She adds that, in respect of Brexit, ‘overall as a business, the effect hasn't been massive on us, but it's those small things that do create additional risk and where we just need to be aware of potential increases either in costs or effort or delay, which is then really important for us to make our customers are aware of’.

The race to net zero

As a company E.ON has committed not only to reaching the target of net zero by 2050 but has made trying to get there more quickly – and helping their customers to do so – a pillar of their strategy. ‘We have seen over the last couple of years a pull by customers [who are] expecting that net zero piece to be part of why they're contracting with us,’ says Kalsi. ‘A lot of our customers are coming to us and saying, well, what can we do – this is our estate, what can we do from an efficiency perspective and what measures would you recommend? So we will do energy audits for our customers and then recommend to them what they can and cannot do.’

Anything companies do in respect of achieving net zero, whether it’s for residential, business or cities, for example, needs to be implemented in contracts and that’s where lawyers come in. ‘Where lawyers are quite unique is that we see quite a lot of activity,’ says Kalsi. ‘We’ve got fingers in every pie, for want of a better term, and therefore we might spot something one area wants to do that another area either has already done or is also thinking of doing. So […] we can put synergies together, in particular in the net zero and ESG [environmental, social and governance] context.’

Given her own passion for net zero and ESG, and that of the wider company and its leadership, Kalsi was involved in setting up a working group on ESG within her own team. ‘We felt we needed to be part of this rather than just being reactive and sitting back and waiting until people come and ask us questions,’ she explains. ‘We are quite proactive in suggesting things to colleagues and being a sounding board. Sometimes business decisions are quite tough and you need to then work out: should we be doing this? And then actually, if you've got a net zero or an ESG tick in the box, then yes, this is a good reason to be doing it.’

The role of the E.ON legal team extends to assessing government policy and legislation through the ESG lens. Where colleagues have been engaged in lobbying government, Kalsi’s team supports them, and is also involved in reviewing government consultations and asking whether the legislation would implement the purpose behind it from an ESG perspective. ‘I feel strongly that a legal team should understand what an organisation is doing,’ says Kalsi. ‘And net zero is a big part of our strategy and we need to be part of that.’