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Viking Energy appeal decision "should remove any lingering doubt" for industry over section 36 consents, says expert

Out-Law News | 11 Jul 2014 | 5:02 pm | 3 min. read

Developers of new power stations in Scotland will welcome a successful appeal by the Scottish government in relation to the proposed Viking Energy wind farm in the Shetland Islands, which "should remove any lingering doubt" regarding the competency of pre-generating licence consents, an expert has said.

Gary McGovern of Pinsent Masons, the law firm behind Out-Law.com, was commenting as the Inner House of the Court of Session overturned last year's ruling in favour of campaign group Sustainable Shetland. In September 2013, the Outer House had found that a developer had to hold a generation licence or fall within a class of exemption before it could apply for 'section 36' consent for a generating station under the Electricity Act.

"The decision to uphold the appeal will have been pleasing reading for the Scottish government, but is also good news for the energy industry in Scotland," said McGovern, an expert in planning and energy law matters.

"The Scottish government will have been expecting a positive result in relation to this 'competency point'. As the appeal court noted, the same point had very recently been considered and 'convincingly rejected' by Lord Doherty in judicial review proceedings raised by Trump International against the Scottish ministers. It's not surprising that the court agreed entirely with Lord Doherty's robust reasoning as to why it is not necessary to hold a generating licence since both of the opposing counsel in this case declined to argue the point before the court and indicated that they could not support the original decision by Lady Clark," he said.

The appeal court's handling of a second point raised by Sustainable Shetland, on the interpretation and application of the Wild Birds Directive, was also unsurprising, McGovern said. However, by "side-stepping" the interpretation issues and accepting that there was sufficient factual evidence before the Scottish ministers to conclude that there would be no significant impact on whimbrel, a type of wading bird, in the area proposed for a new 103-turbine wind farm, the court had left open certain questions arising from the original decision, he said.

Section 36 of the 1989 Electricity Act deals with applications to construct and operate power stations of with a generating capacity over 50 megawatts. In Scotland, consent must be granted by the Scottish ministers. This regime operates separately to the licensing regime for the generation and supply of electricity to consumers, which is set out elsewhere in the Electricity Act.

In practice, developers tend not to apply for a generation licence until nearer the point at which generation is to commence while section 36 consent is granted well in advance of this. As part of a judicial review of the Scottish ministers' decision to grant section 36 consent to the Viking project, Lady Clark of Calton had said that the wording of the Electricity Act "constrained the decision making" of the ministers to only holders of generating licences or exempt persons.

In her original decision, Lady Clark also found that the Scottish government had not complied with its obligations under the EU's Wild Birds Directive when it granted planning permission to the project. However, in his leading judgment in the appeal, Lord Brodie said that the Scottish ministers did in fact have "proper regard" to the possible impact of the proposed development on the birds' habitat.

"Because it may have been lost sight of, we remind ourselves of the nature of judicial review in a case of this sort," he said. "What is under consideration is the legality of a decision made in exercise of specific statutory powers. In exercise of his specific powers, the decision-maker must comply with the general requirements of the law. He must have regard to relevant considerations and only to relevant considerations. Where, as here, the decision-maker is obliged, or chooses, to consider representations, assuming them to be relevant, he must consider them fairly and rationally; but it is for him to accord to them such weight as he considers appropriate."

In this case, there was "ample evidence" to justify the ministers' conclusions that the impact on the birds would not be significant, he said.

"Once that conclusion was arrived at, the Wild Birds Directive, and any associated problems of interpretation and application, fell out of the picture as far as this proposal was concerned," he said.

"It is true that the ministers did not specifically mention the Wild Birds Directive in the decision letter but there was no requirement that they should do so. For a decision to be lawful, it is sufficient that the decision-maker in substance complies with his duties. He need not spell out that he is doing so, nor explain why," he said.

"The approach of the court to this second point is  a useful reminder of the substantial obstacles to mounting a successful challenge to a planning decision," said planning and energy law expert Gary McGovern. "For instance, while the appeal court noted that the ministers did not specifically mention the Wild Birds Directive, it confirmed there was no requirement to do so. A decision-maker need not 'spell out' the nature of his duties - it is enough that there has been compliance in substance," he said.