Achieving development consent for underground gas storage – a marathon not a sprint

Article

Posted by , , on

In July 2015, Halite Energy Group’s underground gas storage facility in Preesall, Lancashire, was authorised by the Secretary of State on the basis of its ‘nationally significant’ contribution to the security of gas supply, increasing the UK’s gas storage capacity by 20%.

This had been the culmination of an uphill planning struggle to bring gas storage to Preesall, where the salt strata provide one of the few locations in the UK suitable for man-made caverns to be created by solution mining for the underground storage of gas.

In the Government’s fast-track, one-stop-shop consenting process for nationally significant infrastructure under the Planning Act 2008, this has been:

  • the first development consent order (DCO) application to be refused by the Secretary of State against the recommendation of his Examiners (only one of two, now that Mynydd y Gwynt’s onshore wind farm in Powys was refused last month);
  • the only DCO decision to be judicially reviewed successfully; and
  • the only DCO decision to be re-determined by the Secretary of State.

What happened?

Halite’s predecessor, Canatxx Gas Storage, had made a number of unsuccessful applications to Lancashire County Council for underground gas storage at Preesall between 2004 and 2009. The introduction of the Planning Act 2008 allowed Halite (from late 2010 advised by a BLP team led by Tim Smith and Paul Grace) to apply to the Secretary of State for a DCO in November 2011. The Examiners recommended that the DCO be made. And yet in April 2013, based on his reading of his Examiners’ report, the Secretary of State refused the application.

BLP was instructed by Halite to judicially review the decision. In January 2014, the High Court found no rational basis on the information before the Examiners for the Secretary of State’s conclusion that he had "no convincing evidence" as to the likely capacity of the project and his view that he could not therefore decide whether the project’s benefits outweighed the visual impact of its gas compressor compound. Indeed, there had been an overall lack of fairness in the process. Likely capacity had played no role in the Examination, had not been put to Halite and was not a requirement of the relevant national policy statement. The decision was quashed and remitted for redetermination.

The Secretary of State appointed a firm of specialist geotechnical consultants with commercial experience of underground gas storage. This was to assist him in re-determining the decision and a positive and sensible step, providing him with technical support which the Examiners had been lacking during the Examination. The independent report concluded a likely storage capacity of three to four times the threshold for an underground gas storage facility being considered “nationally significant” under the Planning Act 2008. Having satisfied himself on the question of safety in his original determination, the Secretary of State then accepted Halite’s arguments on the planning balance and determined that there was a "compelling case" for authorising the application.

Lessons learned

This ground-breaking Halite application offers wider lessons for national infrastructure promoters and investors about how, still seven years after its introduction, the DCO process is still “bedding” down:

  • Mindful of the some of the downsides of a heavily written process, especially for complex technical matters, Examiners are now increasingly taking opportunities at hearings, and even informally through case officers, to be proactive and get to grips with issues of concern to them as early as possible, both with promoters and other interested parties. As they show the Examiners’ thinking on matters which they might well consider go to the heart of an application, promoters are well-advised to do all they can to fully address them.
  • Where even formidable issues have not been addressed by the end of an Examination, but still appear capable of resolution and there is the political will to grant consent, the Secretary of State is increasingly bringing these to promoters’ attention during his determination period and asking for solutions. In one instance, Able Marine wind farm, where even this had failed, there was a “minded to grant” decision rather than outright refusal.
  • The Secretary of State is increasingly taking the benefit of independent specialist advice on technical areas.
  • A promoter’s staying power and positive engagement are still crucial to a successful outcome if the application is technically complex and there is sustained local opposition.
  • The certainty of the DCO process, with almost 100% approvals, resides in the strength of the clear policy support in national policy statements for certain kinds of infrastructure projects. But this should not be taken for granted. Halite has shown that misinterpretations of policy by decision-makers can still occur. As set out in our blog on DECC’s refusal of the Navitus Bay wind farm DCO, even where properly interpreted, NSIP related policies are still part of a statutory planning balance and can allow scope for subjectivity, rarely a friend of certainty. So the Planning Act 2008 process should never be mistaken for a rubber stamp.
  • Government is keen for the system to work and willing to learn. With 43 of 45 applications now approved, the DCO regime has much to offer promoters and investors in the infrastructure sector.

Halite’s exciting project for UK energy now proceeds towards implementation. More information about it, and its implications for other DCO projects, are detailed in our full article..

Stay informed

Sign up to receive email alerts from our award winning Expert Insights team

Sign up now

See more insights by category

This site uses cookies to help us improve our services and your browsing experience. For further information about cookies, including about how to change your browser settings to no longer accept cookies, please view our privacy policy.