Stakeholder engagement – the critical social licence for renewable projects

There is no strong opposition to the idea that Australia must transition to net zero emissions. The Federal Government has committed to reducing greenhouse gas emissions by 43% from 2005 levels by 2030 and achieving net zero by 2050. States and Territories have similarly ambitious targets.

There is similarly little opposition to the idea that electrifying the nation will be a major driver in reducing national emissions. Renewable energy is critical to providing the clean electricity needed to power a low carbon, electrified economy. Cheap, green power also presents an economic opportunity, through direct export of energy and through increasing international competitiveness by reducing energy costs.

Renewable energy brings opportunities

When appropriately negotiated and planned for, renewable energy projects present opportunities to the communities and landholders that host them. In their Renewable Energy Toolkit, the Queensland Farmers Federation has outlined the following potential benefits:

• may provide a diversified income over the life of the agreement, separate to agricultural income;
• site benefits, such as upgraded internal access roads and fencing, which may add value to the property;
• potential community benefits (we note that this could include benefits for local businesses through priority supplier arrangements, and other forms of community investment); and
• other environmental benefits such as emissions reductions.

These benefits are an important part of the conversation between landholders and renewable energy developers.

Green energy growing pains

Despite the many opportunities for individual landholders and regional communities from these developments, in some parts of Australia, there has been a noticeable increase in organised opposition to renewable energy projects and the infrastructure that supports renewable energy, from the communities slated to host projects.

In July 2023, the Federal Government released plans for Australia’s second offshore wind zone between Newcastle and Port Stephens. A further offshore wind area is proposed for the Illawarra region, from Wombarra to Kiama. Both zones have attracted multiple rallies in opposition, with hundreds turning out to express concerns ranging from environmental (the impact on wildlife), to economic (the impact on fishing and tourism) to amenity.

In Victoria, opponents of the Western Renewables Link and Victoria to NSW Interconnector West, two proposed high-voltage powerlines to facilitate greater renewable proliferation, have organised into a community group boasting thousands of members. The Regional Victoria Power Alliance (formerly the Moorabool and Central Highlands Power Alliance) opposes the proposed high voltage powerlines for reasons including the impact on affected landholders, visual amenity, safety and environmental impact. A case bought by the Alliance against the Victorian Minister for Energy and Resources seeking to quash a decision that would speed up the construction of the power lines was dismissed by the Supreme Court of Victoria in December 2023.

Individual projects, particularly large-scale solar projects, have been subject to planning challenges by concerned neighbours and other stakeholders. The competition between renewable projects and agricultural land is an ongoing source of tension in rural and regional communities, with individual project challenges being decided on a case-by-case basis by courts and tribunals.

Opposition can materially impact project timelines and force project development to stall.

Competing land use – not a new issue

Competition between competing land uses is neither new nor unique to the renewable industry. The resources industry has long had to manage stakeholder and community engagement and has developed sophisticated strategies to ensure communities are informed, engaged and understand the benefits and mitigation measures for projects they host. However, stakeholder and community engagement is increasingly being identified as for a critical focus area for the renewable industry.

In December 2023, the Australian Energy Infrastructure Commissioner, Andrew Dyer, delivered a review of community engagement in the renewable energy industry. The Community Engagement Review (Review) emphasised that the transition to net zero ‘cannot succeed without community participation and effective engagement over a long and sustained period of time,’ but found that current engagement strategies were ineffective. In a survey conducted by the Review:

• 92% of respondents were dissatisfied with the extent to which project developers engaged the local community;
• 85% of respondents were dissatisfied with the explanations provided by project developers in response to their questions;
• 89% of respondents stated that the information they received from project developers was not relevant to the concerns that they raised; and
• 85% of respondents stated that their concerns were not addressed in a timely manner.

Poor engagement practices experienced by landholders and community members has ‘led to a material distrust of project developers and, particularly, developers of new, long-distance transmission projects and prospective electricity generation projects along the proposed route.’

Ironically, one of the areas of concern was ‘consultation fatigue’, arising from multiple project proponents investigating potential projects within the same area. Long and complicated approval processes from inception to generation can also contribute to consultation fatigue, with stakeholders being continuously engaged across a number of applications, or re-engaged if a project changes throughout the process.

Attempts at better coordination

Part of the difficulty for the renewable industry is the coordination problem that arises in aligning suitable land with suitable connection capacity. Land that meets technical requirements relating to geography, solar and wind yield and availability, while also being sufficiently proximate to transmission lines is relatively rare and highly sought after. This has led to the unleashing of ‘a plethora of wind and solar farm developers, descending on the planned routes to attempt to sign up nearby landholders with exclusive contracts over their land’ as the Review describes it.

In turn, this results in far more renewable generation projects being pursued by developers than transmission lines, or proposed transmission lines, can accommodate – contributing to a perception that renewable developers are swamping a region. The complexity of this increases with ovelapping tenements for mineral and gas resources also requiring access to the same land.

In response, and to speed up the transition to net zero, governments around Australia are looking at ways to better coordinate the rollout of renewable energy. In Queensland, the State Government has introduced the Energy (Renewable Transformation and Jobs) Act (Qld) 2024 (the Act), together with the recently published Renewable Energy Zone (REZ) Roadmap with the goal of:

• increasing the amount of electricity generated in Queensland from renewable energy sources;
• facilitating and supporting the efficient and coordinated augmentation of the national transmission grid in Queensland to accommodate the increased generation of electricity from renewable energy sources in a safe, secure, reliable and cost-effective way; and
• providing support and advocacy for workers in the energy industry and communities affected by the increased generation of electricity from renewable energy sources.

One of the key strategies of the Act designed to improve coordination is through the declaration of ‘renewable energy zones’ (REZ) in areas suitable for renewable development. Prior to declaring a REZ, a REZ assessment will need to occur, which will consider:

• the suitability of the part to accommodate the development and operation of a transmission network in the part; and
• the impact that the development and operation of a transmission network in the part has, or is likely to have, on particular matters, including, for example, infrastructure and land use and Aboriginal peoples, Torres Strait Islander peoples and other communities.

The Bill provides that each REZ will have a management plan, providing technical details (including the capacity of the transmission network, and the intended percentage mix of capacity derived from different renewable energy sources), a connection process and connection dispute resolution processes. Before making a REZ management plan, the Minister must invite and consider submissions on the plan.

At this stage, the REZ will not be integrated into the mainstream land use planning regime via local government planning schemes or the State-driven regional plans, but it is a step in the right direction in forward planning and engaging on the spatial impact of renewable projects and supporting infrastructure.

The Bill is still in Committee, with the Committee report due on 1 March 2024.

Getting generation in sync

While undoubtedly community and other stakeholder opposition has risen in recent years, proactive industry and government efforts to improve stakeholder engagement and project coordination will help alleviate some concerns. Major project opposition will never completely disappear, but better and more coordinated stakeholder engagement that highlights the benefits of projects, both to host communities and the wider population, will help smooth the way. Governments at all levels also have a key role in educating communities about the individual, regional and national economic benefits derived from the development of renewable energy projects. As much as practically possible, be clear about what needs to be communicated, when, and by whom.

To support this, it is important that representatives from all interested parties regularly communicate in good faith to determine how adjacent projects might impact, complement or otherwise affect one another. These lines of communication should be established early to understand indicative project timing and to ensure the efficient use of land. As much as practically possible, be clear about what needs to be communicated, when, and by whom.

Renewable energy proponents will have to be alive to legislative changes in all jurisdictions in Australia (including getting across the myriad of rights afforded by mining legislation around Australia, and a lack of regulation and understanding of how these resource projects are able to co-exist on land occupied by renewables infrastructure). Legislation aimed at streamlining and better coordinating the green transition will benefit proponents who are proactive in keeping up to date with regulator changes, and those that can quickly take advantage of new opportunities.

In the meantime, the renewable industry should look to strike that elusive balance in meaningful community engagement without causing consultation fatigue, in the context of a relatively immature regulatory environment.

This is an article from our 2024 Edition of Emerging Issues for the Australian Energy and Resources Industry. To read more from this publication, click here.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.