ASA Adjudication on Viking Energy Partnership

Ad

A mailing by Viking Energy showed a photograph of a wind turbine and was headed "Viking Energy - Harnessing Shetland's natural resources for a greener future". Their logo and website address was shown at the bottom of the front page. A series of headings and sections inside the mailing set out proposals for financing and developing a wind farm and the implications for the local economy and environment.

The claims made in the mailing included:

"50% of the profits will stay with the Shetland community";

"It is expected that a total of £25 to £30 million will be injected into the Shetland economy every year";

"It is likely that this figure includes annual income of - upwards of £18 million profits on average to Shetland Charitable Trust";

"Footprint reduced from about 60 km2 to 40 km2" and "Ground disturbance less than 1.5km2" (both under the heading "We've listened and responded"); and

"A recent study by the Macaulay Institute and Aberdeen University showed that the carbon release associated with constructing turbines on peat can be cancelled out by their green power in less than three years."

Issue

Recipients of the mailing, which included Sustainable Shetland and members of that group, challenged whether the following claims were misleading and could be substantiated:

1. "50% of the profits will stay with the Shetland community" (Sustainable Shetland and two recipients);

2. "It is expected that a total of £25 to £30 million will be injected into the Shetland economy every year" (Sustainable Shetland and three recipients);

3. "upwards of £18 million profits on average to Shetland Charitable Trust" (Sustainable Shetland and one recipient);

4. "Footprint reduced from about 60 km2 to 40 km2;" (Sustainable Shetland and two recipients);

5. "Ground disturbance less than 1.5 km2" (Sustainable Shetland and one recipient); and

6. "A recent study by the Macaulay Institute and Aberdeen University showed that the carbon release associated with constructing turbines on peat can be cancelled out by their green power in less than three years" (Sustainable Shetland and two recipients).

CAP Code (Edition 11)

Response

1. Viking Energy Partnership (Viking Energy) said the wind farm comprised two separate projects being taken forward as one.  One promoter was Scottish and Southern Energy (SSE), a FTSE 100 company. They said 45% of the overall partnership was owned by Shetland Charitable Trust which they said was effectively a "common good fund" operated and managed on behalf of the wider Shetland community.  They said 5% of the overall partnership was owned by four individual shareholders, all of whom were brought up and still lived in Shetland.  They had believed they could state that 50% of the profits would stay with the Shetland community because they would be paid to people in Shetland rather than to companies or individuals outside it but accepted, in hindsight, that the leaflet could have defined "community" more clearly.

2. & 3. Viking Energy provided a breakdown of the estimated financial benefits to Shetland from the different elements of the project that had been included in their application and how those benefits would be distributed.  The figures assumed a 23-year lifetime for the wind farm.  Viking Energy said the predictions in the leaflet were produced by third party experts; that they derived from a sophisticated modelling process and were the best estimates available at that particular point in time.  They believed the phrases "It is likely ..." and "It is expected ..." conveyed that the figures were not precise.  They said the figures were heavily adjusted downwards and have subsequently been found to be underestimates.

4. Viking Energy provided a map of the area which showed the respective footprints proposed for the development in 2007 and 2008, and which showed that the anticipated footprint was considerably reduced in 2008.  They said their initial proposal had been for 192 turbines covering approximately 60 km2.  They said studies for the environmental impact assessment and feedback from the public consultation resulted in fundamental changes to the design of the wind farm, including reducing the proposed number of turbines.  They said the 2008 proposal was for 154 turbines, later reduced to 150, covering an area of approximately 40 km2.

5. Viking Energy said the claim was based on a calculation that added up the area of the proposed infrastructure.  They said that, at the time the leaflet was published, the road lengths were still subject to review but that an estimate of 100 km of road was agreed by the project team.  They said that estimate was consistent with previously published estimates but that, following the publication of the Environmental Statement in May 2009, more than two months after the leaflet was circulated, the figure was increased to an actual 117.52 km.  They said the project proposed other disturbances as part of the construction phase but, because those disturbances were temporary and would be quickly reinstated, they were not included in the calculations.

6. Viking Energy supplied full details of the source of the report, which was published by the Scottish Government in June 2008, and the context in which the reference originally appeared.  They said the report set out a calculation of the total carbon dioxide emission savings and payback time for an example wind farm.  They said that, if good practice in site management and selection was followed, the report said carbon payback was between 1.8 and 2.6 years.  Viking Energy said their Environmental Statement considered three carbon emission payback assessment scenarios with the best case scenario (good practice and habitat mitigation) calculated to be 2.3 years.  They said the claim stated "can" rather than "will" to show that methods to address carbon release will have varying levels of impact.  They believed the sentence indicated that the project would be developed in line with best practice as identified in the Macaulay report.  They said their Environmental Study needed to state that the most likely period for carbon payback was 3.7 years, which was closely aligned to the generic figure of 3.6 years given in the study mentioned in the leaflet.  They said their Environmental Statement, published since the leaflet, had superseded the "snap-shot" information that was the subject of the investigation.

Assessment

1. Upheld

The ASA noted that 50% of the economic benefits of the project would go to SSE and 45% would go to Shetland Charitable Trust, but that left 5% of shares that were currently privately owned by four individual shareholder directors.  Although the directors were based in Shetland, we considered the claim suggested that 50% of the economic benefits went to community projects or community bodies in the Shetlands, not to private shareholder directors who were based there. We welcomed Viking Energys acknowledgement that the claim could have been phrased more clearly but concluded that the claim that 50% of the profits would stay with the Shetland community was misleading.

On this point the ad breached CAP Code clauses 7.1 and 7.2 (Truthfulness).

2. & 3. Upheld

We noted that the figures were based on estimates Viking Energy had had produced by experts; that they had been averaged out per annum assuming a 23-year lifetime for the development; that they were not based on absolutely best case scenarios; and that the claims were phrased conditionally.  We noted that the figures took into account costs that were likely to be fixed and known about in advance, such as rents paid to landowners.  We also noted, however, that, although Viking Energy had supplied detailed calculations of the economic benefits they believed the development would bring to Shetland, they had not supplied evidence (e.g. in the form of contracts guaranteeing a price for the electricity they would generate) that showed how the calculations would work in practice, either for the first year or in subsequent years.  We acknowledged that it might not be possible to negotiate prices for electricity that was generated until nearer the completion of the project and that the figures therefore had to be based on estimates.  We noted that the claims included the phrases "It is expected ..." and "It is likely ..." but we considered, nevertheless, that the overall impression of the claims - which stated " ... a total of £25 to £30 million will be injected into the Shetland economy every year" and " ... upwards of £18 million profits on average to Shetland Charitable Trust" - implied that the figures quoted were more than just estimates.  Because it was not possible, at the time the ad was published, to know what price would be paid for the energy generated, we concluded that the claims were therefore misleading.

On points 2. and 3. the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

4. Not upheld

We noted the significant reduction in the proposed number of wind turbines from 192 to 150 and the consequent reduction in the area of land that would be covered by wind turbines as well as roads and other infrastructure.  We noted that, according to the map Viking Energy had provided, the area of land proposed to be covered by the development was reduced by approximately one-third.  We noted that the claim was phrased approximately.  In the context in which the claim was made, we considered it was unlikely to mislead recipients.

On this point we investigated the ad under CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 49.1 (Environmental claims) but did not find it in breach.

5. Not upheld

We noted that Viking Energy had taken into account roads, foundations, crane pads, borrow pits, sub-stations and satellite sub-stations and control rooms, and that they had calculated the area those elements were expected to take up separately from the area of the footprint addressed in point 4.  We noted that, since the ad was used, the estimate for the length of roads that were to be included in the development had risen from 100 km to 117.52 km and so a claim made now for ground disturbance might need to be revised.  We concluded that, when the ad was used, the claim of 1.5 km2 was reasonable and accurate and therefore unlikely to mislead but that, now that the figures had been revised, it should not be repeated.

On this point we investigated the ad under CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 49.1 (Environmental claims) but did not find it in breach.

6. Upheld

We noted that the objectives of the study Viking Energy had cited included providing a means for assessing the impact of the installation and operation of wind farms on peat soils and estimating the payback time for carbon loss. We noted that the report listed a number of factors relating to the construction of the wind farm (including excavations and the preparation and laying of foundations and roads) the effect of which on the peat soil needed to be taken into account.  We noted that the calculations were complex and that the study advised that they be specific to the site in question but that the report gave a worked example of carbon payback time of 1.8, 3.6 and 2.6 years for a wind farm that displaced electricity generated from coal fired, grid mix or fossil fuel mix sources respectively.  We noted that the claim in the ad referred to the findings of the report itself rather than the calculated payback time for the Viking Energy development.  Nevertheless, we considered the claim suggested a similar payback time was likely to apply to the Viking Energy site.  We noted that Viking Energys Environmental Statement stated that the payback period in its best case assessment was 2.3 years; that the statement needed to state that the most likely period for carbon payback was 3.7 years but that it also said the results should be regarded as indicative rather than definitive because of the assumptions used to calculate the payback period and the nature of the assessment. We noted from the Environmental Statement that the actual payback time would depend on the extent to which the peat bogs were disturbed and the mitigation measures that were implemented.  We concluded that it was not justified for Viking Energy to extrapolate findings that were designed to be treated with caution in a way that suggested the claim was valid for their development and that the claim was, therefore, misleading.

On this point the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 49.1 (Environmental claims).

Action

The ad must not appear again in its current form.  We told Viking Energy to amend their ad so that it did not claim that 50% of profits would stay with the Shetland community; that it did not claim that a total of £25M to £30M would be injected into the Shetland economy every year; that it did not claim that upwards of £18M profits on average would go to Shetland Charitable Trust, and that it did not suggest the carbon payback time of the development was likely to be less than three years.

Adjudication of the ASA Council (Non-broadcast)