'Stiff deal': renewable industry concedes it must pay bush for social licence
The clean energy industry has conceded it cannot build the infrastructure the country needs unless it pays regional communities for the social licence it has spent years trying to secure with inequitable payments and through a disjointed mix of local initiatives.
In a keynote speech to the Australian Clean Energy Summit in Sydney, Clean Energy Council chief executive Jackie Trad has called for a legislated renewable resources payment - a fixed charge on every megawatt-hour of renewable electricity, paid directly to the local councils of communities hosting the infrastructure.
The scheme would replace what Ms Trad described as a failed patchwork of benefit funds, grants and sponsorships with a permanent income for the life of each project modelled on long-standing coal and gas royalty payment schemes.
"The fundamental problem this industry has is trust," she said.
"We do not have enough of it in the places where we build: regional and rural Australia."
The admission is a significant shift for the industry's peak body, which has previously defended the voluntary, project-by-project approach to community benefits that Ms Trad admitted had "made no difference".
"Distrust is the most expensive line item in this industry, and we pay it every single day," she said.
The federal government's net-zero transition agenda has repeatedly hit major roadblocks in the bush as energy companies have increasingly struggled to secure social licence from locals.
A 2024 Australian Energy Infrastructure Commissioner review found a 92 per cent dissatisfaction rate among community members regarding how project developers had historically engaged with them.
The current AIEC Tony Mahar recorded 205 complaints across 78 projects in his most recent annual report tabled in federal parliament in May.
It was the second-highest figure since the role was created a decade ago, the report warned that communities still felt the transition was being done to them, not with them.
While some projects have been finalised with community acceptance, the key drivers of friction have revolved around what are perceived to be low community benefit packages, poor community engagement and consultation fatigue, strain on local infrastructure and community division.
The CEC said the rate and design of the proposed scheme would be developed in consultation with communities and stakeholders.
However, Ms Trad conceded that the details would likely be contested and that the payment was intended as a transitional arrangement only, conceding that "the design will take work".
It is understood that the payment would likely not be applied retrospectively.
Under the proposal, host councils would receive the payments and decide how they were spent.
Data centre dilemma
The CEC announcement follows Prime Minister Anthony Albanese announcing two weeks ago that data centres must replace the energy it uses from the grid with renewable power.
TransGrid - which manages the high-voltage network across NSW and the ACT - recently told developers that Western Sydney's transmission capacity was "largely exhausted" beyond 2033, and pointed them towards the Hunter and the Riverina instead.
About 80 per cent of Australia's data centre capacity currently sits in Sydney and Melbourne.
There are already more than 160 data centres operating nationally and another 90 in development, a figure expected to at least double within four years.
Only 27 are in regional areas.
Ms Trad was blunt about why the industry could no longer afford that distrust, pointing to an estimated $155 billion pipeline of proposed data centres - worth more than the entire NSW state budget.
The bulk of the renewable generation to power will largely be built in the regions.
"Let us be honest about what we are asking of them," she said.
"Climate change is an international problem. Energy security is a national self-defence problem. And we are asking regional Australia to solve both, almost exclusively, by virtue of geography.
"The cities get the power and the emissions cuts. The regions host the towers, the panels and the turbines. If you lived at the end of one of those transmission lines, you might think that was a pretty stiff deal."
Nearly 200 renewable energy projects are currently progressing through the NSW planning system alone.
"The fundamental problem this industry has is trust. We do not have enough of it in the places where we build: regional and rural Australia."
- Clean Energy Council chief executive Jackie Trad
Local Government NSW president Darcy Byrne welcomed the call for the creation of a scheme that would recognise what the organisation called a fundamental need for communities hosting renewable energy projects to receive a fair share of the benefits.
"Regional councils are used to getting left behind by big agencies and utilities, so locking in a simple system of financial contributions directly paid to local government would help overcome the cynicism that they are feeling about the renewables roll out," he said.
"Councils want renewable energy to succeed, but host communities must see real, lasting benefits from the infrastructure in their backyards."
Cr Byrne said the clean energy transition had also raised important questions around sustainability and that councils were best placed to decide where investment from any royalties collected from wind and solar projects should be spent.
"The shift to renewable energy must be managed in genuine partnership with councils and their communities, including those impacted by storage and transmission infrastructure," he said.
"The cumulative impact of this rapid development is significantly affecting the local labour market, housing, infrastructure, water, essential services, emergency response and transport routes."
An increasing number of speculators have been working ahead of data centre approval and moving up and down major powerlines to option farmland with water access at three to four times market value, while the data centre industry has itself warned of "cowboys" and "fly-by-night" operators, repeating a pattern that dogged the early renewables rollout.
