High Court dismisses challenge to Drax Power Station DCO

England and Wales

Summary

The High Court has dismissed Client Earth’s legal challenge to the Secretary of State’s decision to grant development consent for the construction of new gas-fired units at the Drax Power Station in R (ClientEarth) v the Secretary of State for Business, Energy and Industrial Strategy [2020] EWHC 1303 (Admin). The Court dismissed each of Client Earth’s eight grounds to the claim. 

This decision reiterates that the need for new generating stations is established by EN-1 and that the Secretary of State was correct in her finding that substantial weight should be given to the need for fossil fuel energy projects. Importantly, the Court made it clear that EN-1 does not require projects to undertake a quantitative assessment of need on a case by case basis. On the relevant grounds of challenge, the Court stated that this was a barely disguised challenge to the merits of the policy itself.

This decision also confirms that the Secretary of State is entitled to grant development consent for major energy projects, notwithstanding that they might have significant impacts in terms of greenhouse gas emissions.

Background to the claim

The Secretary of State for Business, Energy and Industrial Strategy made the decision to grant a development consent order (DCO) in favour of Drax Power Limited, under The Drax Power (Generating Stations) Order 2019. Drax Power had applied for development consent under Section 37 of the Planning Act 2008 (PA 2008) for the construction and operation of two gas-fired generation units at the Drax Power Station near Selby, North Yorkshire.

The Government’s policies for energy-related nationally significant infrastructure projects (NSIPs) are set out several National Policy Statements (Energy NPS) made under the PA 2008. Amongst the Energy NPSs, EN-1 sets out the overarching policy for energy NSIPs.

In granting the DCO, the Secretary of State had disagreed with the recommendations made by the panel which had been appointed under the PA 2008 to examine the application (the Examining Authority). The Examining Authority had recommended refusing the application. In summary, this was, first, because the applicant had failed to show that the new generating units met a specific need for additional gas generation capacity, in view of the policy objectives of energy security, affordability and decarbonisation set out in EN-1.  Secondly, the Examining Authority considered that the impact of the development on climate change would be significant. In their view, the DCO would undermine the Government’s commitment to net zero carbon emissions by 2050 (the Net Zero Target), as contained in the Climate Change Act 2008 (as amended).

The Secretary of State, however, took a different view as to need. Her view was that EN-1 assumed a general need for fossil fuel generation and that substantial weight should be given to the development’s contribution to meeting that need. Despite recognising the significant adverse impact that the development would have in terms of greenhouse gas emissions, the Secretary of State concluded that these emissions did not displace the presumption in favouring of granting the DCO set out in the Energy NPS.

Client Earth, an environmental law charity, brought judicial review proceedings against the Secretary of State’s decision to grant the DCO. The proceedings were heard remotely from 28 to 30 April.

Potential Appeal and Energy NPSs Challenge

It remains to be seen whether Client Earth will appeal to the Court of Appeal, but the Court’s judgment is clear and well-reasoned. It clearly sets out the correct approach under EN-1 to a number of matters including the assessment of need, the impact of carbon emissions and carbon capture readiness.

Several of Client Earth’s arguments against the DCO related to the greenhouse gas emissions which would be caused by the new generating units, especially in view of the Government’s Net Zero Target (which was adopted during the course of the DCO application). The judge noted that since the development was in accordance with the Energy NPSs, the SS could grant the DCO notwithstanding the emissions it would cause. In addition, there are means outside of the PA 2008 regime which the Government can use to address the Net Zero Target (such as its participation in emissions trading schemes).

In any event, the judge commented that the correct arena for merits-based criticism of the Energy NPSs is the statutory review mechanism under the PA 2008.  To this end, the Energy NPSs (or, more accurately, the Secretary of State’s failure to review those Energy NPSs) are now subject to a separate challenge. This may impact the policy in due course, including potentially setting out in more detail how future energy projects are expected to contribute to the Net Zero Target.