Tate & Lyle Industries Ltd & Anor, R. (On the application of) v Secretary of State for Energy and Climate Change & Anor

A statutory power to review one renewable-energy support band may be exercised without reopening every band, but it remains subject to the obligation to treat comparable technologies fairly and without unjustified discrimination. Where updated figures show that increasing support would over-compensate the technology under review, the decision-maker need not ignore those figures merely because other technologies have not yet been reassessed. Avoiding over-compensation and competitive distortion is a legitimate consideration alongside consistency. The court therefore upheld the retention of 1 ROC/MWh for co-firing biomass with combined heat and power.

The claimants challenged the allocation of Renewables Obligation Certificates for co-firing biomass with combined heat and power under the Renewables Obligation Order 2009. They also challenged the Secretary of State’s decision, following an Early Review under article 33, to retain the allocation at 1 ROC/MWh. The claimants argued that the review should correct the identified costing error consistently with the approach used for other technologies, which would have produced 1.5 ROC/MWh.

The Secretary of State relied on updated generation costs and wholesale electricity prices. The central issue was whether he could use those updated figures for the particular technology under review without simultaneously reviewing all other renewable technologies.

1. Outcome. Permission was granted, but the substantive application for judicial review was refused.
2. The statutory scheme permitted an Early Review of one or more banding provisions where the conditions in article 33(3) of the Renewables Obligation Order 2009 were satisfied. The power had to be exercised consistently with the general obligation to treat renewable technologies fairly and without unjustified discrimination.
3. The Secretary of State was entitled to use updated wholesale electricity prices and updated cost information in reviewing co-firing biomass with combined heat and power. The statutory scheme did not require him to ignore current figures merely because equivalent updates had not yet been made for other renewable technologies.
4. Although consistency remained important, requiring an allocation of 1.5 ROC/MWh on outdated revenue assumptions would have produced over-compensation in light of the increased wholesale electricity price. That would have burdened suppliers and consumers and risked competitive distortion contrary to article 107 TFEU (formerly article 87).
5. The court did not need finally to resolve the parties’ dispute about the precise method originally used to set the bands. It nevertheless observed that the earlier process appeared to have aimed at matching projected revenue to the middle of predicted costs, while also taking account of the wider considerations later reflected in section 32D(4) of the Electricity Act 1989.