High Court upholds Drax development consent order

Mr Justice Holgate upheld the secretary of state's decision of 4 October 2019 to grant development consent, which was made against the recommendation of the Examining Authority. 

Pinsent Masons, the law firm behind Out-Law, acted for Drax throughout the application for development consent to construct and operate two carbon capture ready gas-fired generating units, situated at the existing Drax Power Station near Selby in North Yorkshire. It also supported Drax throughout the judicial review process.

This is an important judgment for energy infrastructure projects that are covered by the overarching National Policy Statement for energy (NPS EN-1). The judgment provides much needed clarity on how promoters are to deal with need and the planning balance exercise which have for too long been the subject of examinations when they ought not to be. The purpose of the Planning Act regime has been restored by this case.

The Drax judgment will also be an important case in the recently launched legal challenge over the review of the energy NPSs, which sets to be the next high profile battle over the government's energy policy.

ClientEarth sought to judicially review the decision of the secretary of state on nine grounds, not all of which are covered in this article.

The judgment provides helpful clarity on a number of matters which are regularly raised by objectors to applications for energy projects of all types:

• how should need be considered by the Secretary of State when determining applications for development consent?;
• how should the planning balance be considered pursuant to section 104 of the 2008 Planning Act?; and  
• the effect of the target for the UK's net carbon account for 2050 set out in the 2008 Climate Change Act changing from 80% to 100% below the 1990 baseline.

Need

ClientEarth's challenge was based on the fact that it considered that the secretary of state was required to assess the individual contribution that any particular project would make towards satisfying the general need for a type of infrastructure set out in NPS EN-1. NPS EN-1 covers a range of energy infrastructure, including renewable, nuclear and fossil fuel electricity generation.  ClientEarth submitted that the secretary of state wrongly assumed that because the proposed development fell within one of the types of infrastructure said to be needed, it would necessarily contribute to that need for the purposes of NPS EN-1. ClientEarth argued that a quantitative need assessment was required by the NPS.

This interpretation of NPS EN-1 was accepted by the examining authority who considered the application for development consent on behalf of the secretary of state. Indeed, the examining authority considered government data in respect of capacity for further fossil fuel generating stations which was published in 2017 and the effect this would have on the need case established through NPS EN-1.

However, the court was clear in its determination: there is no requirement to consider need in quantitative terms for any individual energy NSIP application which is covered by NPS EN-1. The NPS establishes that that need exists and it is not to be re-examined as part of the examination of an individual project. The court criticised the Examining Authority, stating: "there was no justification for the Panel to have regard to the 2017…projections in order to assess the contribution of the Drax proposal to meeting the qualitative need identified in the NPS".

ClientEarth's complaint was really an assertion that the policy in NPS EN-1, which was published in 2011, is now out of date and should be updated. The court acknowledged as such when it said "the case advanced by ClientEarth was a barely disguised challenge to the merits of the policy" and "ClientEarth's case and the conclusions of the Panel effectively involved rewriting those and other passages [of NPS EN-1]".

There is a process established through the 2008 Planning Act for an NPS to be reviewed. Therefore, the complaints brought by ClientEarth really ought to have been focused on the review of any decision of the secretary of state to exercise his powers to review an NPS under the provisions of section 6 of the Planning Act. Such a challenge has now been brought by the Good Law Project. Whilst NPS EN-1 remains in force, there is no lawful requirement to consider need in the examination of an application for energy infrastructure where it is covered by NPS EN-1.

The clear judgment of Mr Justice Holgate is helpful in the context of future energy NSIP applications. Over the last few years, objectors have regularly raised need arguments that well advised promoters have argued are not for consideration in the examination, only for the examining authority to entertain them and take up time in issue specific hearings. This decision will provide further clarity, if it were needed, that the examining authority ought not to consider individual need cases through the examination process.

The planning balance

Section 104 of the Planning Act is a critical provision which provides that, where an NPS applies, the secretary of state must determine an application for development consent in accordance with it. There are various exceptions to this principle, which includes the provisions of section 104(7). If the secretary of state is satisfied that the adverse impacts of the proposed development outweighs its benefits then it may refuse development consent.

ClientEarth argued that the secretary of state's application of section 104(7) was incorrect in that she had merely repeated the assessment that she had already carried out under section 104(3), which requires the decision maker to decide the application in accordance with the relevant NPS. Whilst on the one hand ClientEarth accepted that policy contained in the NPSs is relevant to the exercise under section 104(7), on the other ClientEarth criticised the decision because in undertaking the planning balance exercise the secretary of state applied the policy tests in the NPS on need and greenhouse gas (GHG) emissions.

Paragraph 5.2.2 of NPS EN-1 provides that "CO2 emissions are not reasons to prohibit the consenting of projects" in itself. ClientEarth contended that, due to looking at this matter exclusively through the lens of the NPS, the secretary of state had treated GHG emissions as either irrelevant or as having no weight.

In determining this ground, the judge referred back to the decision of Lord Hoffmann in Tesco [1995] 1 WLR 759, where a distinction was made between deciding whether a consideration is relevant or not - which is a matter of law - and deciding how much weight should be given to a relevant consideration - which is a matter for the decision maker. A decision maker is entitled to determine the weight to be given to a matter and indeed can decide no weight is appropriate – this is different to deciding a matter is irrelevant.

The court dismissed ClientEarth's submissions. The secretary of state had considered GHG emissions and had concluded that they represented a "significant adverse impact" which could be weighed in the balance. However, she went on, as she was entitled to do, and concluded that the GHG emissions were not determinative and that the benefits of the development outweighed the adverse impacts. The secretary of state correctly carried out the planning balance required by section 104 of the Planning Act. In respect of GHG emissions she concluded that on their own they could not be a reason to refuse development consent, but she did still give negative weight to them in the planning balance.

This judgment makes clear that section 104(7) may not be used to circumvent the application of section 104(3), which would otherwise result in policy being made ad hoc or even "on the hoof".

The effect of the net zero target changing in June 2019.

The UK has a target to reduce its carbon emissions to below the 1990 baseline by 2050. During the examination this was set at 80% but it subsequently changed to 100% on 27 June 2019. The examining authority did not consider this change due to it occurring just before its recommendation was sent to the secretary of state, but the secretary of state did, as she was required to do so. 

The secretary of state concluded that the policy in the NPSs had not been altered by the amendment to the 2008 Climate Change Act and still remained the basis for decision making. In addition, the secretary of state had concluded that the net zero target was not in itself incompatible with the NPS policies, given the government had a range of other pathways to bring about a minimum 100% reduction in GHG by 2050.

ClientEarth considered it was procedurally unfair that it had not been given the opportunity to comment on the effect of the change to the net zero target and that this change in legislation should have led the secretary of state asking for representations from interested parties.

The court rejected ClientEarth's submissions and considered there was no issue with the approach taken by the secretary of state. ClientEarth's witness evidence sought to explain what it would have said if it had been given the opportunity to make submissions to the secretary of state. However, the court ruled that it "is plain that the object of those submissions would have been to undermine the basis upon which policies in EN-1 on GHG emissions and gas fired electricity generation were prepared and adopted" and the "import of ClientEarth's points is that key policies in EN-1 and EN-2 are out of date by virtue of the net zero target." Accordingly, the court rejected ClientEarth's submissions on the basis that the secretary of state would have had to disregard them under section 106 of the Planning Act, on the basis that they relate to merits of policy. As the court referenced, this matter is one that can only be addressed through a decision to carry out a review of the NPSs under section 6 of the Planning Act.