Wind farm ruling challenges market practice on environmental impacts

Gary McGovern of Pinsent Masons was commenting after the Inner House of the Court of Session suggested that factoring the impacts of grid connection into EIAs for projects would best enable developers to comply with their environmental law obligations.

McGovern stressed that while the court did not go as far as to mandate that approach, he said the ruling casts doubt on the long-standing approach of onshore wind developers in the UK, which is to focus on consenting the wind farm alone and leave consideration of the grid connection to the network operators.

The case before the Court of Session concerned plans for a new wind farm in the south of Scotland.

Energiekontor UK Ltd applied to Scottish Borders Council for planning permission for an onshore wind farm near the village of Heriot. The project, it has been estimated, could generate approximately 150 GWh of renewable electricity each year – enough to power over 38,000 homes on average each year.

A neighbouring farmer objected to the plans. Scottish Borders Council rejected Energiekontor’s application but planning permission was later granted after the company appealed – a reporter was appointed to determine the appeal by Scottish ministers.

However, the farmer lodged judicial review proceedings before the Court of Session, taking issue with how the reporter had considered the matter of grid connection when assessing whether Energiekontor had met its EIA obligations in relation to the project.

Under Scots law, the likely environmental impacts of any major project must be assessed and those impacts factored into consenting decisions. Those requirements are derived from EU law and continue to apply post-Brexit.

In a series of cases over the years, the Court of Justice of the EU (CJEU) and courts in the UK have explored EIA requirements in the context of major projects. The case law is clear that developers cannot split single projects into different sections, subject to their own planning considerations, with the effect of circumventing the aims of the EIA regime. That practice has been coined as ‘salami slicing’.

In the context of Energiekontor’s project, the neighbouring farmer objected to the lack of detail Energiekontor shared about the grid infrastructure necessary to connect the project. Their view was that this made it impossible for the full environmental effects of the project to be assessed.

The reporter rejected that argument, however, taking the view that the grid connection element of the company’s plans was separate to the development for which it was seeking planning permission. In essence, the reporter determined that this was not a case in which there had been ‘salami slicing’. However, in her opinion for the Edinburgh court, Lady Wise has now ruled that the reporter erred in the way they reached that determination.

“What was required in this case was careful consideration of whether the windfarm construction and grid connection were, on the basis of the available material, so closely connected as to form parts of a single project,” said Lady Wise, determining that the reporter had not met that requirement.

The judge said that it is for Scottish ministers to determine whether Energiekontor’s plans – absent the grid connection element – constitute a ‘single project’ for the purposes of assessing its environmental impact. However, she suggested that in cases where it is unclear to developers whether grid connection works would require planning permission, and therefore an EIA, “the approach that may best secure compliance may be to address the cumulative environmental impact of the whole project before the first decision on planning permission is made”.

McGovern said: “The EIA legal principles at the heart of this decision are well-established. However, the ruling gives rise to real practical challenges in the context of the current system because the design, routing and consenting of the grid connection is largely beyond the developer’s control and typically, for good reasons, is progressed by network operators only after a generating station has consent and is likely to proceed.”

“While it is simple to say the grid connection impacts should be assessed alongside the wind farm, in practice that can be challenging. Developers may not know the connection point to the grid or may know the connection point but no more because the network operator is waiting to see if the wind farm gains consent before spending time and money examining connection route options. There may be any number of cable route options between A and B to consider, not to mention the thorny question of overhead versus underground line. Identifying lots of route options on a speculative basis in the application for the wind farm consent may not assist decision-makers and the network operator may ultimately select a different route in any event,” he said.

While the court did not go as far as to say that grid connections and the wind farm must always, as a matter of principle, be treated as one project and assessed together, McGovern said developers should now consider whether they should be treated as such in the context of their projects.

“Applicants and decision-makers will need to grapple with this case-by-case in light of what is known about the likely point of connection to the grid and to what extent it can and should be assessed in the EIA,” he said.

“From an EIA compliance perspective, one way around this issue could be the use of the ‘multi-stage condition’ provisions in the EIA regulations, which recognise there may be situations where the significant effects on the environment ‘are not fully identifiable at the time of their determination of the application for planning permission’. However, that may not necessarily resolve the separate finding by the court – that it is irrational to grant consent on the basis of the renewable energy and climate change benefits that would be derived from the wind farm becoming operational post-grid connection while disregarding the environmental impacts of the grid connection itself,” McGovern added.