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Submission to the Victorian REZ Development Plan Directions Paper

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Introduction

RE-Alliance welcomes the Victorian government’s leadership in investing in Renewable Energy Zones and creating VicGrid. The Victorian government is correct to note that unacceptable delays in critical network investment threaten the security of the state’s electricity system and frustrate the timely decarbonisation of the state’s economy. The REZ Development Plan Directions Paper reflects the work needed to decarbonise Victoria's grid in line with AEMO’s most ambitious modelling. 

We thank the government for centring community engagement and benefit-sharing as a key component of VicGrid and in the rollout of renewable energy zones. 

Social licence at a local level for renewable projects is a critical pillar of the transition to clean energy. All new electricity infrastructure brings impacts for local communities. Engaging effectively and ensuring significant financial benefits accrue to impacted communities are essential first steps to securing social licence.  In Victoria, we’ve seen ideological opponents to renewables leverage local frustrations towards wind farms in strategic ways so as to colour the policy environment and obstruct progress to a lower emissions future. While we consider much of this is behind us, we are wary of the potential for the much-needed large scale transmission projects to cause a similar type of obstruction to REZ rollouts across the eastern states. 

Poor planning and holes in communication with project neighbours can have significant negative consequences, and even threaten the success of renewable energy zones. An example of how poorly this can play out can be seen recently in Germany, where interventions in the network have led to social licence issues and delays in meeting climate targets.

“The first thing that came to my mind when I saw the data in the ISP was Germany’s build-out of transmission infrastructure, and how it has drawn significant backlash. This backlash has made new German interconnection more expensive and badly delayed, and that has delayed the build-out of renewable energy and is impacting Germany’s ability to meet its climate targets”.

Over the last seven years, our organisation has been working in this intersection between renewable energy projects and local communities, assisting wind farms to build bridges with local communities through benefit and profit-sharing arrangements. This typically takes the form of community enhancement funds that provide grants to local community groups and neighbour payments schemes. However, we have seen a great variety of innovative models. In particular, 

  • RE-Alliance is currently facilitating a combined fund vehicle to bring together project-based wind farm community enhancement funds across the Moyne Shire
  • Community members are able to co-invest in large wind farms at Sapphire, Coonooer Bridge and Kiata Wind Farms.
  • Construction of a solar and battery-based mini-grid for residents around the Dundonnell Wind Farm.
  • Simultaneous support for local business and project neighbours through a Neighbourhood Benefit Scheme. Residents around the Mortlake South Wind Farm receive gift cards that can be redeemed only at local outlets.

We hope the combined fund model we have developed which uses on-the-ground experience to enhance social licence at a local level is of interest to the government. We would be happy to discuss our work further with the Department. Our goal is to make sure the transition to renewables delivers meaningful opportunities for community enhancement to communities across regional Australia. This work will assist in creating the policy settings, the expectations and best-practice knowledge on how to deliver a just transition for regional communities. 

Summary of Recommendations

RE-Alliance makes the following recommendations in regard to how VicGrid engages with local communities:

  1. embed consideration of social licence in REZ Development Plans
  2. establish a benefit and coordination framework;
  3. create a new engagement and benefit guide;
  4. establish REZ coordinators;
  5. recognise the critical role of Traditional Owners in the process; and
  6. ensure VicGrid communicates the energy transition to the community. 

 

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