Legislative changes on the way to deal with Viking Energy decision as Scottish Government confirm intention to operate business as usual

Their proposed amendment to the Energy Bill would, if approved, make it more difficult for objectors to new power stations to challenge developments on the same grounds as in the Viking Energy case. In September, the Court of Session upheld a challenge brought against the Scottish Government in relation to consent for a major wind farm in the Shetland Islands.

Details of the proposed amendment emerged as the Scottish Government announced its intentions pending hearing of its appeal against the Court of Session's decision. In a statement, it said that it disagreed with the court's interpretation of the relevant legislation and that it would "work with the UK Government" to bring forward any necessary amendments if it lost the appeal.

Planning and environmental law expert Gordon McCreath of Pinsent Masons, the law firm behind Out-Law.com, said that the changes proposed "provide the required fix" in similar cases, provided that applicants could show they had met the relevant duties.

"The amendment doesn't take the simple route of just saying that you don't need an Electricity Act licence before you apply for a section 36 or 37 consent," he said.

"Instead it makes it clear that the Schedule 9 duties - to have regard to certain environmental considerations and mitigate impacts on them - apply to a section 36 or 37 application under the Act.  This avoids the position that concerned Lady Clark, where the duties would not apply to an application by a non-licence holder. And it necessarily follows, by implication, that you don't need a licence to apply for section 36/37 consent," he said.  

"The progress of the Energy Bill means that this amendment wouldn’t take effect before July next year, which is the current timetable for the Bill becoming law.  However the amendment being in train should still significantly reduce the appetite of objectors to raise a challenge on this point, so it is still helpful," he said.

Section 36 of the 1989 Electricity Act deals with applications to construct and operate power stations of a certain generating capacity. 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 her detailed ruling, handed down last month, Lady Clark of Calton considered the relationship between various provisions of Part 1 of the Electricity Act. She noted that although section 36 "says nothing about the status or qualification of a person who may apply" for consent, the Act as a whole "set up a detailed licensing system for the regulation of the industry and provided that the amenity provisions [i.e. the Schedule 9 duties] shall have effect in a way which is tied to the licensing system and only the licensing system".

"I am of the opinion that the Act, as originally enacted, and in its amended terms, has implemented the amenity obligations by placing them on the only two categories of persons contemplated in the legislation, namely licence holders or exempt persons," she said. "The Act has also constrained the decision making of the Secretary of State [or Scottish Ministers in Scotland] in relation to these two categories of person which are the only two categories of persons contemplated."

Lady Clark's decision was a departure from established practice, where in many cases section 36 consent is obtained by those who are not licence holders or are exempt from applying for a licence. In many cases, a generation licence is not obtained until nearer the point at which generation is to commence, which is typically some time after section 36 consent is granted.

In a statement, the Scottish Government set that it intended to "continue to operate in accordance with the practice which has been followed for many years and to deal with current applications on that basis" until the appeal was determined.

"The decision on the legislative interpretation runs contrary to the established practice relating to the handling of applications for consent which has been in place both north and south of the border for many years," it said.

"Scottish Ministers consider that the balance of public and national interest is in favour of continuing with the current approach until the appeal has been determined, in particular because of the need to continue to support the economy and our renewable energy ambitions," it said.

Lady Clark's opinion also dealt with various points on protection of birds under the Wild Birds Directive.  The proposed legislative changes do not touch on those but they are also subject to the appeal by the Scottish Government.  The appeal is due to be held in February/March next year.