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Tidal lagoon developer did not begin works on time set by development consent order, High Court finds

A long-planned scheme to build a tidal energy lagoon in Swansea has had a further setback after the developer's request to declare it had begun work on the project in time, and the relevant development consent order (DCO) was therefore extant, has been rejected by the High Court.

In Tidal Lagoon (Swansea Bay) Plc v Secretary of State for Business Energy And Industrial Strategy & Ors [2021] EWHC 3170 (Admin) (25 November 2021), the company claimed it had made enough preliminary progress to meet the requirements of The Swansea Bay Tidal Generating Station Order 2015 (the DCO) but the UK government, Welsh Government and Swansea City Council disputed this.

The initial proposal was to build a seawall from the sea bed adjacent to Swansea Docks over a length of 9.5km to form a lagoon extending some 3km into the Bay between the Rivers Tawe and Neath in order to harness tidal energy.

In 2016 the company carried out ground investigation and survey works pursuant to the DCO. It also entered negotiations with the Secretary of State seeking to agree a contract for difference funding for the electricity to be produced by the project. The Welsh Government also announced its support for the project and offered £200m towards the costs.

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However, the Secretary of State announced in the UK Parliament shortly afterwards that the project was not good value for money and UK government funding should not assumed. As a result, work on the project paused.

When, in 2019, the UK Government committed to a target of net-zero, the company began pursuing the project again. It carried out several pre-commencement requirements under the order, but some of these still remain to be completed today. Accordingly the company accepted that it did not 'commence' the development within 5 years as required by Requirement 2 of the Order.

The company made a request to the Secretary of State that in order to prevent the DCO from lapsing on 30 June 2020, the Government should enact a one-provision bill that would result in the extension of powers under the Order by one year. The request was refused on 9 June 2020.

Later, in correspondence with the council, the company's project manager referred to the preliminary works and to the fact that further investigative, demolition, and site-clearing works were then being carried out. He claimed that this constituted material operations within section 155 of the Planning Act 2008 so as to begin the development.

However, the council and the other defendants rejected the claim, and so a Part 8 claim was filed in March 2021.

The company sought two declarations from the court:

  1. That it had 'begun' the development for which the order granted consent within the meaning of section 155 of the Planning Act 2008 during the period required by virtue of section 154 of the Planning Act 2008 (i.e. by 8 June 2020); and, if so
  2. The order being a development consent order that had not ceased to have effect, the company was entitled to apply to change the wording of Requirement 2 in Part 3 of Schedule 1 to that order to extend the period within which the authorised development must "commence" (as defined in Article 2 thereof).

Section 154 of the Planning Act sets out the rules around when development must begin in relation to the timelines set out in the development consent order.

Section 155 of the 2008 act says that development is taken to begin on the earliest date on which any material operation comprised in, or carried out for the purposes of, the development begins to be carried out.

His Honour Judge Jarman QC said that if he were to accept the company's interpretation it would mean that only investigatory works need be undertaken to begin the project for the purposes of section 155. "Such an order would thus remain extant, giving rise to the potential for a promotor to apply to extend the time for commencement of the consented development," he said.

He added: "In my judgment that is an unsatisfactory result, and one which cannot have been intended in granting the order, even if no notices to treat were in the event served. It goes against the scheme set out in section 154 and 155, which reflects other well-established schemes in relation to planning permissions, for limiting the duration of consents."

The judge said that this interpretation "must be rejected if there is a less unsatisfactory alternative".

"Such an alternative is interpreting Article 2 so as to modify and/or exclude section 154 or 155 or to exercise the power under section 120(5). Such an outcome involves a clarification of, and no injustice to, the language used and gives effect to its purpose."

As such, he found that the claimant was not entitled to the first declaration which it sought, and consequently, the need for the second declaration fell away.

Adam Carey

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