If we want to have more solar and wind farms, we need to gain the support of local communities, ensuring that they all benefit

The race to transition to clean energy is on as solar and wind developers flood regional communities in hopes of hosting generation and transmission infrastructure. This additional capacity is needed to meet the federal government’s target of 82% renewables in Australia by 2030.

The Clean Energy Council has estimated that the amount of capacity needed to come online between 2026 and 2030 will achieve this goal. This equates to 5,400 megawatts (MW) of wind power, 1,500 MW of commercial solar farms and 3,600 MW of rooftop solar each year.

The scale of this challenge is staggering. This represents a year-on-year expansion of 240% in added capacity compared to the last three years.

So how do developers encourage communities to accept these projects? They typically offer payments to landowners. Community development funds are also popular, with developers helping to fund local needs like housing and social services.

However, these approaches have been inconsistent and lacking in transparency. Developers have been accused of opportunistic behavior. This has led to confusion and sometimes conflict between neighbors in regional communities.

In short, many regional communities feel left in the dark and cheated. The energy transition is happening “for them,” not “with them.” Research suggests that these projects are much more likely to succeed when residents feel the project is theirs or includes them and will share in the lasting benefits.

How are communities responding?

Some regional communities are taking matters into their own hands to restore balance in negotiations with developers.

For example, the Wimmera Southern Mallee Collaboration in Victoria has brought together the community and 12 energy companies with projects in the region. The state government, non-government organisations and trusted local consultants are supporting this work to agree a framework for collaboration.

This framework will create the structure and commitments needed for utilities to work together and deliver benefits to communities. These benefits include solutions to urgent local needs such as housing, childcare and other infrastructure and services.

Similarly, Hay Shire Council in the Riverina in New South Wales has conducted a consultation to increase community influence. The aim is to explain to renewable energy developers what residents want and don’t want.

State and federal governments, as well as organizations like the Clean Energy Council, The Energy Charter, RE-Alliance and the Community Power Agency, are also trying to level the playing field. One such initiative, Striking a New Deal, will support and fund one rural or regional body – a local council, association or organization – to achieve better local outcomes from local energy projects.

But challenges remain. Renewable energy developers are struggling to build their social license to operate in regional communities. These challenges threaten to undermine the entire energy transition.

New business models are needed

Creative new business models are slowly emerging in Australia. One example is the community-owned Haystacks Solar Garden in Grong Grong, New South Wales. Another approach is offering discounts on electricity to residents living near wind and solar farms.

Unfortunately, this approach is the exception rather than the rule in Australia. A look abroad may better inform our approach at home.

For example, in Denmark, since 2009, the Danish Renewable Energy Act requires that at least 20% of all new wind projects be owned by the local community. Wind power currently generates 54% of Denmark’s electricity.

Similarly, in Germany, community projects play a major role. Energiewende or energy transition. Germany boasts more than 1,700 energy communities, most of which are cooperatives (55%) and limited liability companies (37%). Ownership and the ability to shape the local energy system are key factors for community participation.

The privately owned Midtfjellet 55 wind farm in Norway is more comparable to the Australian approach, with owners investing €1.8 million (A$3 million) a year in local infrastructure and activities for the community of 3,100.

These numbers are visible across Europe. Strong political support and a mature regulatory environment encourage investment by both households and industry.

Engaging and informing the community is key

Closer to home, a review of community engagement by the Australian Energy Infrastructure Commissioner offers guiding principles for good practice. The report, commissioned by the Commonwealth, was released in February. Its nine recommendations include “better communicating to communities the purpose, benefits and needs of the energy transition” and “sharing the benefits of the transition fairly”.

Arron Wood of the Clean Energy Council welcomed the report’s findings, saying:

Community engagement and effective communication are the antidote to the misinformation that is being used to fuel division in some regional communities. Real, good faith engagement from all parties is needed to ensure the right balance is struck between managing community expectations and continuing to build the generation, transmission and storage infrastructure that Australia urgently needs.

Importantly, the federal government has adopted all nine recommendations in principle. It recently released long-awaited national guidelines on community engagement and benefits for transmission projects.

States are also working closely with industry bodies and non-governmental organisations to provide guidance on community engagement. The NSW, Victoria and Queensland governments are offering payments to landowners for transmission projects.

Balancing the concerns of regional communities with the need to accelerate the energy transition is clearly difficult. Government and industry appear to support a flexible approach to engagement and payments to landowners and communities. However, it is questionable whether their concerns can be overcome without a more prescriptive, standardised approach to benefit sharing.