Landmark Sizewell C ruling instructive for projects of all shapes and sizes

The decision deals with a number of issues, including how project promoters should carry out environmental impact assessments (EIA) and habitats regulations assessments (HRA) for multi-phase large-scale projects, and how to carry out cumulative assessments where there are uncertainties as to utility supply. It also covers how a decision maker can disagree with statutory bodies, and how to consider greenhouse gas (GHG) emissions assessments.

The Sizewell C judicial review

In August 2022, campaign group Together Against Sizewell C launched a judicial review of the government’s decision to approve the £20 billion nuclear power project on the Suffolk coast. The then-secretary of state for business, Kwasi Kwarteng, had given the Sizewell C development the green light in July 2022 – against the advice of the Planning Inspectorate. Together Against Sizewell C argued in court that Kwarteng’s consent was unlawful, and that the government had failed to properly assess the environmental impact of the project.

The court considered a number of grounds challenging the project’s consent, including the claim that Kwarteng had not properly considered alternative solutions to meeting the UK’s energy and climate change targets. But the vast majority of grounds related to the proposed water supply for the new nuclear station. During the course of the examination, it became clear that the Sizewell C plant would have to rely on a different water supply to the one set out in its application.

This was because Northumbrian Water had changed its position on the issue, meaning that the plant would have to rely on a permanent new supply being put in place by the water company. Amid uncertainty over when Northumbrian Water might complete that project, Sizewell C’s developers proposed building a temporary desalination plant to fill the gap before the permanent supply was made available. Campaigners argued that the government had failed to consider the impact of providing the new permanent water supply to the project.

But Judge David Holgate dismissed each of the grounds for the legal challenge in a 47-page written ruling. He said several parts of the challenge were “totally without merit” and that Together Against Sizewell C’s argument had relied upon an “illegitimate attempt to rewrite the government's policy aims”. Mr Justice Holgate added that the government’s decision making in respect of the water supply for the plant was lawful and, critically, is able to be dealt with under a separate, later, process.

Definition of a ‘project’

The judgment is a reminder that the well-known case law principles on the definition of a ‘project’ for EIA and Habitats Regulations purposes, as well as for the question of ‘salami slicing’ – dividing a single project into separate parts to skirt around planning rules – are not exhaustive. Mr Justice Holgate made clear that the weight given to these case law principles, most recently set out in the Court of Appeal’s decision to block the construction of a bridge in the west of England, is a matter for the decision maker and depends upon the circumstances of each case.

In Sizewell C’s case, he said it was acceptable for the secretary of state to consider the water supply project as separate from the power station development because the water supply would be taken forward by a different company, under a different regime, and would be required for other reasons as well as supplying the plant.

Importantly for all development projects, which constantly have to deal with the knotty issue of how to assess the utility supply for their projects, the judge made clear that, if projects were required to properly assess details of those utility supply projects, “decisions on those development projects would have to be delayed until the company is able to define and decide upon a proposal.”

He added: “That approach would lead to sclerosis in the planning system which it is the objective of the legislation and case law to avoid.” This comment sends a clear message that it is acceptable to consider utility supply as a separate issue within an EIA and Habitats Regulations context. They should only be assessed cumulatively when that is actually possible to do.

When undertaking in-combination assessments that are required under the Habitats Regulations, the judge reaffirmed that a decision maker can rationally decide to defer consideration of the cumulative impacts of a subsequent development to a later consent stage – if the plan for that development is not yet fully formed.

In Sizewell C’s case, this meant that, because there was no real proposal for what the permanent water supply could look like – including any kind of parameters – and because the water supply project would be subject to its own assessment and consent processes, it was rational for Kwarteng not to have taken it into account in his decision. Crucially, it would be left for any future assessment to consider whether the water supply option chosen by Northumbrian Water would adversely affect the integrity of a ‘European site’ in combination with Sizewell C. There is nothing in law to say this decision cannot be deferred.

Representations made by statutory bodies

A key aspect of the judgment is how it directs decision makers to consider representations made by statutory environmental bodies. The general principle is that, if a decision maker disagrees with such a body, they need to give “cogent reasons” for doing so. However, the judge in this decision made clear that “the level of reasoning which the law expects may depend upon whether that view is an unreasoned statement or assertion, or a conclusion which is supported by an explanation and/or evidence. It may also depend upon the nature of the subject matter. Some advice may not call for reasoning and/or supporting evidence, other advice may do”.

In Sizewell C’s case, the position of Natural England and its concerns about the water supply was characterised as ‘bare assertion’ by the judge, who raised a number of questions about the veracity of Natural England’s concerns. Mr Justice Holgate was clear that statements of such statutory bodies do not need to be taken as gospel in any given project, and should be seen in the context of the wider materials about the application in question.

Alternative solutions for Habitats Regulations issues

The judgment sets out some important principles, particularly for UK energy projects, about ‘alternative solutions’ for Habitats Regulations purposes, that are helpful for projects that need to go to Stage 3 of that process to qualify for an exemption. In particular, the judgment emphasises that:

• challenges should not be brought on the basis of complaints about government policy prerogatives;
• the question of the scope of what can be an alternative solution is one of ‘Wednesdbury’ unreasonableness, within the context of government policy;
• government policy is not just about ensuring clean energy is delivered, but also that there is a diversity of methods of generation and security of supply.

In this context, the question of what an alternative solution is does not need to consider alternative energy sources. For example, for Sizewell C, the question of alternatives could be focused on alternative solutions for delivering a large supply of nuclear power specifically, rather than a large supply of clean energy overall. Mr Justice Holgate indicated that this would be true for other energy sources like solar and wind.

Greenhouse gas emissions

Together Against Sizewell C had argued that, in carrying out his assessment, Kwarteng took into account an unevidenced benefit of the nuclear project. It said that the claim that Sizewell C would make a positive contribution to achieving a 75% reduction in GHG emissions by 2035 was unproven because it was not clear when Northumbrian Water would complete the water supply project.

However, the judge found that the material in front of Kwarteng was adequate to allow him to have confidence that a long-term water supply solution would be delivered. Accordingly, there was no legal reason why he could not take into account the contribution that Sizewell C is expected to make in reducing the shortfall in electricity generation in 2035, or to the target for reducing GHGs.  

Together Against Sizewell C also contended that Kwarteng acted irrationally in concluding that the Sizewell C site would be clear of nuclear material by the year 2140. The group’s position relied to a large degree on a single line in Kwarteng’s decision letter and some submissions to the examination concerning the impacts of future climate change and flooding on the project – including its sea defences.

But the judge was critical of the group’s submission on this point, finding it to be “a classic example of a failure to read the decision letter fairly and as a whole”. He added that the secretary of state recognised the uncertainty of future predictions but relied upon the adaptive nature of the design for the coastal defences and other mitigation and controls built into the design and other regulatory regimes that would apply. Mr Justice Holgate made clear that Kwarteng had been entitled to rely upon the normal assumption that other regulatory regimes would operate properly.

Kwarteng had also concluded that the operational GHG emissions of Sizewell C would not have a significant effect on the UK’s ability to meet its carbon budget commitments, or the ability of the UK government to meet its carbon budget commitments under the Paris Agreement. Together Against Sizewell C challenged whether operational emissions had been assessed, but the judge rejected this ground. In doing so, he referred to the key policy, the National Policy Statement EN-1, which recognises the operation of a range of planning and non-planning policies aimed at addressing CO2 emissions.

Mr Justice Holgate found that the government has determined CO2 emissions are not reasons to prohibit the consenting of these projects. NPS EN-1 goes on to state that the secretary of state does not need to assess individual applications in terms of carbon emissions against carbon budgets. The examining authority’s report did reach a conclusion, based on the information provided within the applicant’s environmental statement, as to the significance of Sizewell C’s construction and operational emissions against the UK’s 5-yearly carbon budgets.

The judge found there to be “ample” evidence supporting the conclusion of the examining authority and the secretary of state. He found that there was no deficiency in Kwarteng’s decision letter on this aspect. Moreover, it will be interesting to followers of judicial review that the judge concluded that the summary provided by the examining authority in its report was perfectly adequate for the purposes of the secretary of state’s consideration.

Co-written by Imogen Dewar of Pinsent Masons.