On 9 July the Inner House of the Court of Session upheld the Scottish Minister's decision to grant section 36 consent for the construction and operation of the 103 turbine Viking Wind Farm in Shetland. The appeal decision inSustainable Shetland v The Scottish Ministers overturns Lady Clark's decision of October 2013. Lady Clark had interpreted the Electricity Act 1989 as requiring that section 36 consent could only be granted to a party which, at the time of the section 36 application, already held, or was exempt from holding, a licence under the 1989 Act. As such, she held that the grant of section 36 consent to Viking Energy (who did not hold a licence) was legally incompetent. This interpretation ran contrary to the industry practice of obtaining section 36 consent in advance of securing a generating licence from Ofgem or a licence exemption from DECC.
The Inner House appeared to have little sympathy with Lady Clark's interpretation and disposed of the issue in a single paragraph of the appeal judgement. The judgment adopts Lord Doherty's reasoning in the case of Trump International Golf Club Ltd v. The Scottish Ministers which concerned Donald Trump's unsuccessful legal challenge to the grant of section 36 consent for an offshore wind farm near his golf course in Aberdeenshire. Following the Outer House decision in Sustainable Shetland, Mr Trump had adopted Lady Clark's interpretation as one of his grounds of challenge.
Lord Doherty, and now the Inner House, held that on a proper interpretation of the 1989 Act consent for the construction, expansion or operation of a generating station (under section 36) and the licensing of a party to actually generate electricity (under sections 4 to 6) are two separate statutory regimes: "The holding of a licence is not a condition precedent to the granting of consent under section 36; but if the holder of a consent under section 36 does not obtain a licence under section 6, the consent is simply of no practical use" (at paragraph 19).
The section 36 consent had also been quashed on the ground that the Scottish Ministers' decision letter had failed to demonstrate that obligations under the Wild Birds Directive had been fully understood and met in relation to a rare and protected bird species, the whimbrel. This finding was also reversed on appeal. The Inner House held that there was ample evidence to justify the Scottish Ministers' factual conclusion that the windfarm would not have a material adverse effect on the whimbrel population. It was clear from the decision letter that the Scottish Ministers had identified and considered this evidence. The Inner House emphasised that a decision-maker is not required to show all its working: "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" (at paragraph 29).
Lady Clark's decision had caused some uncertainty in the renewables industry and the Inner House decision is to be welcomed. The decision could still be appealed to the Supreme Court but, as Sustainable Shetland did not support the competency plea in the Inner House, it seems unlikely that this ground would form part of a further appeal.
Did you know...
MacRoberts Energy Group has published a summary of the Contracts for Difference which can be found here
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