by Alicia White, External Relations Manager, Energy Networks Australia
As Australia makes steps towards net zero, the knotty problem of how to deliver clean energy most efficiently to where it is needed can’t be ignored. The building of new transmission infrastructure is emerging as a crucial social licence issue for all stakeholders and is equally about hearts and hip pockets, not just the technology.
While many Australians want renewables, we have not sufficiently advanced the conversation as a community about how we get these new sources of clean energy to where it is needed – or how the infrastructure is paid for.
Just over 80 per cent of Australians live on the east coast of Australia and even more within our coastal capital cities. Most of our solar farms have been built in inland regional areas and wind farms on or in regional coastal areas. And herein lies the problem.
How do we get the power from where it’s generated to where it’s needed? Energy generated by these wind and solar farms must be transported to customers along new and advanced transmission infrastructure.
Unfortunately, there is consternation in affected communities about plans, routes, amenity and compensation. The energy industry and related community sector has been working to resolve these issues and build genuine stakeholder engagement processes into projects.
In some states, there have been no new transmission projects for a generation or more and community expectations of stakeholder engagement have changed. Energy businesses are working with landowners and communities and responding to their concerns while striving to build a social licence to operate.
In August 2021, RE-Alliance launched a report ‘Building Trust for Transmission: Earning the social licence needed to plug in Australia’s Renewable Energy Zones’. The report made eleven recommendations on how to improve the social license for transmission infrastructure in Australia.
The Energy Charter also recently launched the Energy Charter Better Practice Guide for landholders and communities to encourage better practice for energy businesses. Then there’s the sticky issue of compensation, which is constrained by the current regulatory environment.
Under current arrangements, the land on which the transmission towers are built is compulsorily acquired or leased with oneoff payments.
The regulatory framework provides for what it considers to be fair compensation. Anything above this adds to project costs and would have to be justified to the Australian Energy Regulator – which does not have a lot of scope within its Regulatory Investment Test for Transmission (RIT-T) process to do this.
If we cast our minds back just a decade or so ago, there was similar community opposition to wind farms. In response, the wind industry developed several new compensation models, including ongoing annual payments for the affected landholder and sometimes also for affected neighbours.
The advent of social media has made it easy to mobilise activists and stakeholders. So, community engagement and compensation expectations have risen but when it comes to transmission developments, the regulatory process for determining investment costs (which includes easement payments) has not changed.
Landholders may not be aware of (or care about) the difference between regulated networks building transmission lines and commercial businesses erecting wind turbines. To them, it’s a new structure on their property and they want (what they perceive to be) fair compensation.
There is no transition to a renewable energy future without transmission. However, we need to get the social license settings right. All customers, including the vulnerable, pay for transmission developments, so a balanced approach to community benefit and compensation issues is vital to ensure we can get on and build this essential infrastructure.