The Blueskin Bay skyline is to remain void of wind turbines following an Environment Court decision to decline one on Porteous Hill.
However, the group behind the proposal to build a 110m turbine is not ruling out appealing the decision to the High Court.
The Environment Court said the proposed turbine was in "considerable tension'' with the Dunedin City Council's proposed district plan for energy resilience which considered matters including values of significant natural landscapes and adverse effects on the local environment.
Wind farm co-ordinator Scott Willis said the group behind the proposal, Blueskin Energy Limited, was "very disappointed in the decision''.
"At this point we have to look at the decision, give some thought to it and look at the next steps.''
"It is not just a small local project, it has implications for how the national policy statement on renewable electricity will be considered ...''
The proposal was vehemently opposed by some residents near Porteous Hill who said the turbine would affect property prices and quality of life.
The Environment Court ruling comes more than two years after a plan to build three turbines, costing between $5million and $6million, was pitched.
Changes to the original proposal, including replacing three 90m turbines on the hill with one 110m machine, would not prevent the sole turbine from becoming "the dominant feature in the skyline'', the report said.
The Environment Court argued while the area was not an outstanding natural landscape it was an important landscape.
The proposed turbine would be in a "highly memorable'' place and would have significant adverse effects on landscape and visual effects and value of existing amenities.
The report found the turbines would not be able to operate during evenings from December to March because of uncertainty about noise pollution.
The applicant was unable to complete attempts to measure turbine noise because anemometers were vandalised and there was insufficient time to obtain wind records.
As it stood, the proposal was "on the cusp of being considered as contrary to the 2GP (council plan) as a whole''.
The court believed there were other suitable sites for turbines in Blueskin Bay but not near Porteous Hill.