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Is a wind farm a public benefit investment? Practical tips against the latest decisions of administrative courts in Poland
2009-10-05 | Radosław T. Skowron, Grzegorz Zawada | Newsletter of IBA Section on Energy, Environment, Natural Resources and Infrastructure Law
| Undoubtedly, the time has come in Poland when thinking about renewable sources of energy is turning into investing, especially in the wind power industry. We can say without the slightest hesitation that the number of wind parks which are already under construction or wind parks in the phase of being worked on is bubbling. The Zachodniopomorskie, Pomorskie, Kujawy, Wielkopolska or Podkarpacie regions are in a heated race to secure attractive real estate for themselves for the construction of wind parks.
Zachodniopomorskie Voivodship can serve as, without exaggeration, the best example of the advancement of the growth of this green energy sector: for we can say that, in this region, there are only four kinds of communes. Those which already have wind turbines; those which have provided for construction of this type of facility in their local spatial development master plan; those which are in the process of enacting or amending the local spatial development master plan in order to allow for wind parks; and finally those which may not have this kind of investments due to their location in the Natura 2000 areas.
As is often the case in our country (and not only here), the sluggish administrative reality fails to keep up with energetic business. It is not as much the administration on a local level which implements investment projects but, most of all, the legislative body – the parliament hand in hand with the government. Despite frequent and loud announcements of support for renewable energy investment, the reality does not leave room for excessive optimism. On the contrary, in the regulations regarding investment processes in the wind power industry, no facilitation or support exists which could make the realization of wind investments easier, cheaper or at least less time consuming.
To build a wind park, an investor must wade through all those grueling, time consuming and costly procedures provided for in the Act on spatial planning and development, in the building law, and in the new acts on access to information on the environment and its protection, on the participation of society in protecting the environment, and on the environmental impact assessment. Therefore, he must struggle for the wind turbines to be provided for in local spatial development plans, obtain decisions on land development conditions and building permits or await decisions on environmental constraints or prepare environmental impact assessment reports. Particularly, the environmental dimension of wind investments seems to be a singular and undeserved torture as one can be under the impression that the requirements which wind energy investments face positions them in the forefront of the most harmful and dangerous ones to the environment.
All of the foregoing circumstances seriously hinder every single investment in Poland. Yet, our country is obligated under European Union regulations to use more and more green energy over the next years. The draft of the new Directive of the European Parliament and of the Council on promotion of the use of energy from renewable sources requires that as much as 15% of energy in Poland must be generated from renewable sources by 2020. Therefore, it is obvious that the investments aiming at generating clean energy must be treated as special investments.
The issue of treating wind power plants as public benefit investment can serve as a case in point when considering the problems the investors are facing on the one hand and the attitude toward the wind power energy of the broadly understood public authorities on the other. This is an issue which investors have long been struggling with and where they are at the mercy of a fairly arbitrary and often times capricious position of organs of the administration, in particular the one of the administrative courts, together with a passive and nonchalant attitude of the legislature, to use euphemistic terms. To be clear, it is worth keeping in mind that by the law-maker we mean the same individual who at each opportunity keeps chanting slogans about the need for firmer steps toward renewable sources of energy, the protection of the environment, and so on.
The question is why for an investment to obtain a status of a public benefit can make the whole process so much easier and expedited? It is so because the procedure of getting such a status at the phase of obtaining a decision on building and land development conditions for a public benefit investment is much easier and faster. Firstly, the investor does not have to fulfill the difficult conditions for a regular land development conditions provided for in Article 61 of the Act on spatial planning and development. Secondly, when conducting proceedings in the public benefit investment, the organ can notify the parties to the proceedings by promulgation, which markedly improves the whole procedure. Furthermore, the authorities do not have to invite the interested ecological organizations to participate in the proceedings. And finally, which is of fundamental importance, decisions regarding the locations under the future investment of public benefit make use of increased durability and their elimination after twelve months after their issuance impossible.
According to the Act on spatial planning and development, a public benefit investment is defined as activities of local (commune) and beyond local (district, voivodship, national) importance which constitute realization of aims as described in Article 6 of the Act on real estate management. The latter act lists in a form of a catalog the investments which can be treated as benefiting public purposes. For instance, the Act enumerates, among others, building and maintaining drainage paths, lines and equipment for transporting liquids, steam, gasses and electric power as well as other utilities and equipment necessary to use the lines and equipment; building and maintaining public lines for supplying a population with water; collecting, transporting, cleaning and draining sewers; recycling and neutralizing waste, inclusive of its disposal by landfill; and building and maintaining buildings and equipment serving the protection of the environment.
The catalog fails to indicate the equipment for generating energy, which is the source of the whole commotion. Using the linguistic interpretation and respecting, after all, the rule of the legislator’s rationale, it should in fact be accepted that building a wind turbine cannot be considered a public purpose in the meaning of Article 6 of the Act on real estate management and, consequently, no decision establishing a location for a public benefit investment can be issued for this kind of investment.
And such is the spirit in which administrative jurisdiction of Polish courts as well as the voices of legal circles seem to have been evolving recently. This is a result of a certain easiness and obviousness of justification of the above thesis as a simple linguistic interpretation of regulations because, from the legal standpoint, a simple statement that, in Article 6 of the Act on real estate management, the legislator failed to list equipment and buildings for generating energy but only equipment and buildings necessary for its transport (Article 6.2) should suffice to render the discussion closed. Yet, the issue is neither that obvious nor is it unequivocal and for years now it has stirred a dispute within the doctrine and resulted in strikingly different decisions by various administrative courts.
Starting with the reservations of general nature, it must be noticed first of all that it is difficult to see in the exchange of arguments so far those which justify the rationale behind not placing the equipment for generating energy on the list of public purposes. The most frequently cited argument is that it was the legislator who decided that these types of structures may not serve as public purposes. It seems fairly obvious, however, that electric power is a good without which, to use lofty words, our civilization would cease to exist from one day to the next. It is a good which is absolutely essential in every work place or household, which naturally does not require any further elaboration. Ensuring access to electric power constitutes one of the fundamental and general needs right next to, for instance, water (nota bene, the legislator considered building water supply utilities a public purpose, cf. Article 6.3 of the Act real estate management). It is also one of the fundamental responsibilities of administrative bodies, in particular those of the self-government level. Generating energy through, for example, building a wind park supplying a town or a wider area with electric power, seems to fill the meaning of the term “public purpose”: especially in that the transport and equipment necessary for this purpose would be completely useless when not generating electric power. If we accept the argument that a public purpose is simply ‘a purpose which pertains to the general public, serving the general public, intended (accessible) for everyone’ then it is impossible to state why the transport of energy is included in the definition, yet generating the same energy as such is not. The only arguments against acceptance of building power generating equipment as a public purpose are of a purely formal nature caused by literal interpretation of the provisions of the Act.
It should also be borne in mind that, in its Article 2.5 which defines the concept of a public purpose investment, the Act on spatial planning and development indeed refers to the concept of a public purpose in the Act on real estate management (Article 6 cited on many occasions). In the latter Act, the concept of a ‘public purpose’ was created with compulsory purchase in mind as, under Article 112.1 of the Act on real estate management, compulsory purchase can be carried out in relation to a real estate properties located in the areas which in the spatial development plans are intended under public purposes.
Undoubtedly, this had an impact on the content of the catalog in Article 6 of the Act because from the point of view of the instrument of a state authority forcibly depriving an individual of an ownership right, compulsory purchase being such an instrument, this catalog should have been created with utmost caution and narrowed to an essential minimum. One must keep in mind, however, that the Act on real estate management dates back to 1997, therefore the catalog of public purposes was created a few years before the Act on spatial planning and development went into force (enacted in 2003).
When creating a catalog of public purposes in 1997, the legislator’s basic aim was to determine the areas where compulsory purchase would be necessary in order to carry out various public tasks. At the time, the needs related to locations of public purpose investments were not under consideration as the concept appeared in Polish law only in 2003 with the coming into force of the Act on spatial planning and development. Hence, a thesis can be advanced that a direct reference to the catalog in the Act on real estate management with no relevant modifications was not an optimal solution as it was created as an instrument for realization of completely different purposes.
The advocates of the thesis that building a power plant, including a wind turbine, may not constitute a public purpose investment often adduce decisions of administrative courts, stating that this kind of an investment does not comply with the definition as it is not included in the catalog defining public purposes. The analysis of the decisions (c.f. the judgment of the Supreme Administrative Court of 15 May 2008, II OSK 548/07, or the judgment of the Regional Administrative Court in Kielce of 30 October 2008, II SA/Ke 343/08) confirms the statement presented above that the jurisdiction’s position rests on formal premises exclusively, relying only on linguistic interpretation of the regulation.
Nevertheless, one cannot wave aside the fact that the position of the jurisdiction is exceptionally polarized in this case. It may seem that, if the issue whether erecting a wind turbine is a public purpose investment is that much obvious and unequivocal in the current state of law, the courts should maintain a uniform line of jurisdiction. Yet, it is not the case for court decisions show distinctly otherwise. For instance, the judgment of the Regional Administrative Court in Szczecin dated 14 August 2007, II SA/Sz 294/07, stating that building wind farms should be considered a public purpose investment or a fairly latest judgment of the Regional Administrative Court in Łódź dated 15 January 2009, II SA/Łd 824/08, from which it follows that building a wind farm of 3.0 MW together with a terminal and transformer installation constitutes a public purpose investment.
Therefore, considered at the same time and in the same legal state, the cases led the courts to radically opposite decisions. This makes it an argument which shows that the issue is not as obvious after all and that the court’s use of functional interpretation and elastic approach to the problem may lead to different results. The position of the Ministry of Infrastructure is also worth mentioning here which, in its letter of 22 February 2008 (BN6ml-023-15/08/566), decided that building wind turbines which serve introducing electric power to the public electric power network should be considered a public purpose investment and, when the planned investment does not have at least a commune importance (is not an investment serving a commune’s community) and the produced energy is only for the investor’s own needs, then establishing conditions of building and development of the land takes place by way of a decision on land development conditions (i.e. not by way of locating the public purpose investment).
In view of the imperfection and, clearly, irrationality of the legislator, different ways of classifying wind farms as a public purpose investment are sought. One such way is treating the wind investment as an object serving the protection of the environment which, in accordance with Article 6.4 of the Act on real estate management, constitutes a public purpose. The opponents of the stance indicate that the concept of ‘serving the environmental protection’ should be read as one directly intended for its protection, hence only equipment used directly to prevent pollution or reinstating set limits or standards of the environmental protection can be treated as such.
It seems, however, that this kind of a thesis fails to find its reflection in the current legal state and is too far-fetched. If to concentrate on, for instance, the issue of protection of air, then a wind energy plant, in contrast to a conventional power plant (coal), undoubtedly contributes to its protection (being part of the environment, under Article 3.39 of the Act) and serves its protection. For this reason, it is beside the point that it ensures the air’s best quality which, under Article 85 of the Act environmental protection, constitutes de facto protection of the air as the ways of the protection of the air should be treated only as exemplary or occurring most frequently.
It is also difficult to agree with the view that since the wind energy power plants ‘by definition’ have an impact on improving the air quality and its protection then the production of energy in conventional power plants constitutes an automatic violation of the rules and standards of the environmental protection. Such a position seems completely wrong because there is no way the two issues can be combined. The fact that fossil fuel power plants produce energy in a manner that is more or less clean does not mean that they do so illegally. On the other hand, however, the circumstance that, despite the requirement to use appropriate equipment to minimize pollution, they do it in a manner far more harmful than the plants using wind energy seems more than obvious.
In our opinion, there are no convincing arguments proving that the facilities generating electric power with the use of renewable sources of energy cannot be deemed as a utility serving the protection of the natural environment. It is generally known that one of the assets of their use is their salutary effect on the environment, especially in limiting emissions of pollutants into the air. Those unconvinced should remember the European Union’s latest endeavors in this matter. Therefore, propping against ‘pro-ecological’ argument for recognizing wind energy as public purpose investments seems to be a justified step and certainly one that is worth consideration. It is even more so that the climate for renewable energy seems, despite all declarations made in public, moderately advantageous, an example being a fresh decision of the Regional Administrative Court in Olsztyn of 11 March 2009, II SA/Ol 987/08, in which a combined heat and power plant operating on biofuel was denied status of a public purpose investment (a similar decision of the Supreme Administrative Court of 15 May 2008, II OSK 548/07, treated a hydroelectric power plant in the same way).
Finally, it is worth stating it outright: the responsibility for commotion over perceiving wind energy as a public purpose investment falls first of all on both the legislator and the government for their lack of any initiative whatsoever to change the content of Article 6 of the Act on real estate management. There is no doubt that all interpretation endeavors which absorb investors and carrying completely redundant investment risk could be easily removed had a clear and unequivocal provision been made in the Act.
powrót
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