ON APPEAL FROM THE QUEEN'S BENCH DIVISION
LORD JUSTICE MOSES
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE AIKENS
LORD JUSTICE ELIAS
| TATE AND LYLE SUGARS LTD
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|THE SECRETARY OF STATE FOR ENERGY AND CLIMATE CHANGE & ANR
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Mr Martin Chamberlain (instructed by Litigation & Employment Group, Treasury's Solicitors Department) for the Respondent
Hearing date : 17 May 2011
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Lord Justice Elias:
"Before making any banding provision, the Minister must have regard to the following matters:
(a) the costs (including capital costs) associated with generating electricity from each of the renewable sources or with transmitting or distributing electricity so generated;
(b) the income of operators of generating stations in respect of electricity generated from each of those sources or associated with the generation of such electricity;
(c) the effect of paragraph 19 of Schedule 6 to the Finance Act 2000 (c.17) (supplies of electricity from renewable source exempted from climate change levy) in relation to electricity generated from each of those sources;
(d) the desirability of securing the long term growth, and economic viability, of the industries associated with the generation of electricity from renewable sources;
(e) the likely effect of the proposed banding provision on the number of renewable obligation certificates issued by the Authority; and the impact this will have on the market for such certificates and on consumers;
(f) the potential contribution of electricity generated from each renewable source to the attainment of any target which relates to the generation of electricity or the production of energy and is imposed by, or results from or arises out of, a Community obligation. "
"(e) the costs of generating electricity in any of the ways listed in the first column of Part 2 of Schedule 2 are significantly different from the costs of generating electricity in that way to which the Secretary of State had regard when making the banding provisions".
"The review under Article 33(2) has started in October 2010. It is expected to last three years. Until it is completed, in 2013, the Secretary of State is in no position to know whether, as a result of the increase in wholesale electricity prices, other technologies are being over-subsidised under the present continuing allocation or not. It is not possible to know whether those technologies are in the same position as Tate & Lyle until such a review takes place. In respect of some, their costs may have been increased at a greater rate than revenue. In respect of others, their costs may have been reduced. But the statutory scheme cannot work at all if such features are to be constantly updated. The only occasion for updating is either a lengthy review lasting a number of years in respect of all technologies or the review contemplated by Article 33(3) in respect of one or more technologies once Article 33(3) is triggered. "
It seems to me that if the Secretary of State concludes, on updated figures, that a particular technology would be over-compensated if the allocation of ROCs was increased, he is not compelled to ignore that conclusion in the interests of consistency. He is not compelled to over-subsidise CoCHP.
The basis of the allocation of subsidy will inevitably become outdated in the period between reviews. After all, that is the whole point of a review. But it does not seem to me possible to justify allocating to Tate & Lyle an increase in ROCs/MWh merely because others may also, pending a review, be in receipt of an excess of subsidy. Avoiding State Aid which leads to distortion in the market is as much a cardinal principle as consistency of treatment. Pending a complete review, there are bound to be some technologies which benefit from changes in the predicted costs and revenues and others which suffer.
For that reason I take the view that the Secretary of State was justified in maintaining an allocation of 1 ROC/MWh."
Lord Justice Aikens:
Lord Justice Longmore: