Out-Law / Your Daily Need-To-Know

Community engagement review poses challenges for Australian renewables

26 Feb 2024, 9:26 am

The Australian federal government has accepted recommendations intended to improve community engagement on renewable energy generation, storage and transmission projects in Australia which, once implemented, may significantly impact the renewable energy industry.

The recommendations were made in a report by the Australian Energy Infrastructure Commissioner Andrew Dyer (85-page / 1.12MB PDF) following an extensive review. Noting Australia’s energy transition and the federal government’s target of 82% of electricity generated from renewable energy sources by 2030 and net zero carbon emissions by 2050, the report highlights the need for governments at all levels to do more to support social licensing and ensure the industry can develop projects at the pace required to meet those targets.

The government has accepted in principle the nine recommendations outlined in the report but has not yet provided guidance on what the implementation of these recommendations will look like.

Key takeaways

The most significant recommendation from the report is the creation of a national developer rating scheme, rating developers and operators of renewable energy projects based on their performance, track record and capabilities with community engagement. The scheme is initially intended to be voluntary, with developers and operators able to opt in or out at any time.

We consider it essential that this scheme remains voluntary and is designed with sufficient controls to prevent misuse by vocal minority groups driven to stop essential projects with broad community support from actually going ahead.

Commissioner Dyer also makes a number of recommendations around the process for project and site selection, including a recommendation that planning authorities declare “preferred” and “no-go” zones for the development of renewable energy infrastructure, and a requirement for developers to bid to prospect and develop projects in particular locations.

In practice, we consider these recommendations may not be viable. Most projects are developed on privately owned land, with most renewable energy zones (REZs) in the state of New South Wales, for example, declared over privately owned land. The suggestion that planning authorities do not regard REZs as appropriate for generation, storage and transmission infrastructure is concerning. The broader issue not fully addressed in this report is the need to ensure processes are implemented to expedite the approval of projects within REZs, so that developers select Australia to develop new electricity infrastructure among global competition for resources and financing.

Interestingly, the report recommends a dedicated ombudsman in each state to handle complaints in connection with the development, operation and decommissioning of renewable energy infrastructure. We await to see the uptake by communities, or whether traditional methods such as contacting the local member of parliament remain the preferred course for resolving such grievances.

While implementation of the ombudsman is for each state to consider, the report suggests compulsory membership by developers. This may act as a disincentive for developers to continue operation in states that adopt this approach, given the increased costs already experienced by developers and operators of renewable energy infrastructure.

What is ultimately required is partnership between the industry and government on renewable energy developments to ensure genuine community engagement and to dispel misinformation about renewable energy infrastructure. This does not mean subjecting developers to requirements to continually change project plans in order to address each and every community member’s concerns. Instead, it should involve a holistic approach between the government and industry to explain the key features of the proposed development and then listening to community feedback.

A summary of the recommendations

Theme	Recommendation
Theme 1: Developer performance and selection process	Recommendation 1: Appoint a suitably qualified, experienced independent body or person to design, implement and operate a national developer rating scheme for developers and operators of new generation, storage and transmission projects. The developer rating scheme would rate developers and operators based on performance, track record and capabilities on community engagement. The scheme would initially operate on a voluntary basis, with developers and operators able to opt in or out at any time. The developer rating scheme is also linked to the implementation of other recommendations in this report, including developer, site and project selection (recommendation 2).
Recommendation 2: The Commonwealth, states and territories should roll out programmes to plan and control development of new generation and transmission projects. This includes requiring developers to bid or apply for selection to prospect and develop projects at a particular location, so the “right” projects are selected for development at the “right” sites. To support programmes like this, and incentivise participation by developers, the report recommends the Commonwealth align existing federal programmes, such as the Capacity Investment Scheme, with state and territory programmes. Other suggested criteria for developer and project selection include the developer’s rating under the developer rating scheme, the developer’s ability to demonstrate best practice engagement with First Nations people and the developer’s ability to receive and act on community feedback.
Theme 2: Selecting the best sites	Recommendation 3: States and territories to source and map information for land use planning from a diverse range of sources to better identify and select project sites, and reduce “consultation fatigue” with the community. Suggested information sources could include information from local governments, transmission developers, the Australian Energy Market Operator and First Nations people.
Theme 3: Reform environmental and planning approval processes	Recommendation 4: Expedite reforms contemplated or underway, including to the Environment Protection and Biodiversity Conservation Act 1999 (Cth), that will improve processes and reduce the time to obtain planning and environmental approvals for projects. The report recommends planning authorities declare both “preferred” and “no-go” zones for development, which are determined in consultation with key stakeholders, including environmental authorities, First Nations peoples and agricultural groups.
Theme 4: Complaints management	Recommendation 5: Each state and where applicable, territory, should create a dedicated ombudsman to handle complaints about prospecting, development, construction, operation and decommissioning of renewable energy generation, large-scale storage and transmission infrastructure. The ombudsman’s scope should include dealing with matters arising from private land agreements such as access agreements and licenses, opposed entry, property damage and payment disputes. The report suggests compulsory membership by developers of the relevant ombudsman scheme, and reduced fees for developers with an acceptable rating under the proposed developer rating scheme. The report provides several options for states to create this ombudsman, including establishing a new ombudsman or expanding the jurisdiction of an existing ombudsman, such as the Energy and Water Ombudsman.
Theme 5: Messaging and governance of the energy transition	Recommendation 6: Initiate a process for developing a communications programme that provides a clear narrative to local communities about the pragmatic reasons for the energy transition, including why there’s an urgent need in their region for new renewable energy infrastructure, and details of the proposed development, such as the type of technology, location and scale of the project. The communications programme should be based on input from local stakeholders including local government, community groups and First Nations peoples, and identify the benefits of the energy transition from a regional community perspective. As part of ongoing messaging, Commissioner Dyer suggests the Commonwealth consider appointing an “eminent” spokesperson, whose role would be to champion the energy transition nationally, independently of the government.
Recommendation 7: The Commonwealth should work with state and territory governments to ensure appropriate governance arrangements are in place for oversight of energy transition projects of national significance. These governance arrangements should effectively communicate and manage broader issues surrounding the energy transition, including port to project transportation of equipment and materials, contractor accommodation, and skills development, so that local communities better understand the impact of the transition in their community.
Theme 6: Coordinated economic development and community benefits	Recommendation 8: The Commonwealth should work with jurisdictions to ensure arrangements exist at state, territory and national levels to provide a cross-discipline, whole-of-government approach to identifying, cultivating and generating economic and investment attraction opportunities for regional businesses, including First Nations peoples and their enterprises.
Recommendation 9: State, territory and local governments should encourage local community groups to proactively identify and take ownership of opportunities from the energy transition, including for improved infrastructure, electricity networks, housing and business and vocational opportunities. The report suggests state and territory governments could achieve this by requiring developers to include details of proposed benefit-sharing programmes for the community when tendering for projects. The programme’s merits could then be taken into account as part of assessing the overall suitability of the developer and the proposed project.

Theme

Recommendation

Theme 1: Developer performance and selection process

Recommendation 1: Appoint a suitably qualified, experienced independent body or person to design, implement and operate a national developer rating scheme for developers and operators of new generation, storage and transmission projects.

The developer rating scheme would rate developers and operators based on performance, track record and capabilities on community engagement. The scheme would initially operate on a voluntary basis, with developers and operators able to opt in or out at any time.

The developer rating scheme is also linked to the implementation of other recommendations in this report, including developer, site and project selection (recommendation 2).

Recommendation 2: The Commonwealth, states and territories should roll out programmes to plan and control development of new generation and transmission projects. This includes requiring developers to bid or apply for selection to prospect and develop projects at a particular location, so the “right” projects are selected for development at the “right” sites.

To support programmes like this, and incentivise participation by developers, the report recommends the Commonwealth align existing federal programmes, such as the Capacity Investment Scheme, with state and territory programmes.

Other suggested criteria for developer and project selection include the developer’s rating under the developer rating scheme, the developer’s ability to demonstrate best practice engagement with First Nations people and the developer’s ability to receive and act on community feedback.

Theme 2: Selecting the best sites

Recommendation 3: States and territories to source and map information for land use planning from a diverse range of sources to better identify and select project sites, and reduce “consultation fatigue” with the community.

Suggested information sources could include information from local governments, transmission developers, the Australian Energy Market Operator and First Nations people.

Theme 3: Reform environmental and planning approval processes

Recommendation 4: Expedite reforms contemplated or underway, including to the Environment Protection and Biodiversity Conservation Act 1999 (Cth), that will improve processes and reduce the time to obtain planning and environmental approvals for projects.

The report recommends planning authorities declare both “preferred” and “no-go” zones for development, which are determined in consultation with key stakeholders, including environmental authorities, First Nations peoples and agricultural groups.

Theme 4: Complaints management

Recommendation 5: Each state and where applicable, territory, should create a dedicated ombudsman to handle complaints about prospecting, development, construction, operation and decommissioning of renewable energy generation, large-scale storage and transmission infrastructure. The ombudsman’s scope should include dealing with matters arising from private land agreements such as access agreements and licenses, opposed entry, property damage and payment disputes.

The report suggests compulsory membership by developers of the relevant ombudsman scheme, and reduced fees for developers with an acceptable rating under the proposed developer rating scheme.

The report provides several options for states to create this ombudsman, including establishing a new ombudsman or expanding the jurisdiction of an existing ombudsman, such as the Energy and Water Ombudsman.

Theme 5: Messaging and governance of the energy transition

Recommendation 6: Initiate a process for developing a communications programme that provides a clear narrative to local communities about the pragmatic reasons for the energy transition, including why there’s an urgent need in their region for new renewable energy infrastructure, and details of the proposed development, such as the type of technology, location and scale of the project.

The communications programme should be based on input from local stakeholders including local government, community groups and First Nations peoples, and identify the benefits of the energy transition from a regional community perspective.

As part of ongoing messaging, Commissioner Dyer suggests the Commonwealth consider appointing an “eminent” spokesperson, whose role would be to champion the energy transition nationally, independently of the government.

Recommendation 7: The Commonwealth should work with state and territory governments to ensure appropriate governance arrangements are in place for oversight of energy transition projects of national significance. These governance arrangements should effectively communicate and manage broader issues surrounding the energy transition, including port to project transportation of equipment and materials, contractor accommodation, and skills development, so that local communities better understand the impact of the transition in their community.

Theme 6: Coordinated economic development and community benefits

Recommendation 8: The Commonwealth should work with jurisdictions to ensure arrangements exist at state, territory and national levels to provide a cross-discipline, whole-of-government approach to identifying, cultivating and generating economic and investment attraction opportunities for regional businesses, including First Nations peoples and their enterprises.

Recommendation 9: State, territory and local governments should encourage local community groups to proactively identify and take ownership of opportunities from the energy transition, including for improved infrastructure, electricity networks, housing and business and vocational opportunities.

The report suggests state and territory governments could achieve this by requiring developers to include details of proposed benefit-sharing programmes for the community when tendering for projects. The programme’s merits could then be taken into account as part of assessing the overall suitability of the developer and the proposed project.

Co-written by Daniel Corban of Pinsent Masons.