The psychology of social licence: The energy transition needs more than a compelling business case

The case for new energy infrastructure can be compelling without being convincing to the communities asked to host it. A forecast reliability gap can establish why investment is needed. But it doesn’t, on its own, establish trust in the institutions delivering that investment, or give people confidence that their concerns will influence what happens next.

Social licence depends on more than explaining the technical need for a project. It requires an understanding of how people experience change: whether they trust the process, whether they have genuine influence over decisions, whether they can see the benefits once infrastructure begins to work. Victoria’s reliability challenge, the Western Renewables Link, and the Waratah Super Battery illustrate different parts of that task.

AEMO’s 2026 Electricity Statement of Opportunities forecasts that, if only committed and anticipated projects proceed, Victoria will begin to exceed the reliability standard from 2030–31. The additional firm capacity required to close the gap grows from around 920 MW in 2030–31 to 4.6 GW by 2035–36. Even if government-supported projects proceed as planned, the reliability issue is only pushed out to 2033–34. At the same time, Victoria is expected to lose 4.2 GW of existing generation capacity through coal retirement, which has supplied around 23 TWh of electricity a year over the past four years.

Those figures make a strong case for action. But the urgency of a system-wide problem does not resolve local questions about fairness, disruption, or the future of a place. Providing more information is not the same as addressing those concerns.

Research by Moffat and Zhang into the mining sector found that trust was the core driver of social licence, shaped by procedural fairness, impacts on social infrastructure, and the quantity and quality of contact. Separate research into wind farm development identified four recurring influences on acceptance: trust, procedural justice, distributional justice and attachment to place.

These themes are familiar to those working with regional economies on place-based policy. Presenting facts and figures as absolute, without understanding the local industry and community nuances behind them, can erode the trust needed to act on the evidence. Closing Victoria’s reliability gap therefore requires more than a persuasive account of demand and supply. It also requires a credible relationship with the communities on which delivery depends.

For WRL and other long-running projects, the practical challenge is to make agency real and recognisable. That starts with being explicit about what remains open to influence. Communities should be able to distinguish between settled decisions and genuinely contestable choices, including route refinements, mitigation measures, landholder arrangements, local benefits and construction impacts.

Project teams also need to be able to show how their plans changed because of what and how communities contributed. Explaining how local input altered a decision gives people evidence that their participation mattered. Without that feedback, even a process that responds to concerns can leave its influence invisible.

Visible benefits matter too, but they shouldn’t be presented as though they cancel out local loss. Reinforcing the value a project brings must sit alongside acknowledging the disruption, loss and even grief that communities can experience. A credible process makes room for both.

The task doesn’t end when construction is complete. Communities are often asked to live with uncertainty and disruption long before they can see a project’s benefits. Explaining what happens at the other end of a difficult delivery process is therefore part of building social licence, not simply an opportunity to celebrate completion.

The Waratah Super Battery serves as a useful example. After well-documented construction delays, the collapse of a major supplier, and transformer failures during testing, Australia’s most powerful battery has finally gone full Energizer Bunny, and is now delivering the grid-protection service it was built to provide. Those difficulties warrant scrutiny: delays have costs, and technical failures can undermine confidence in the transition. But an account that ends with those setbacks misses what the project is now doing.

Waratah’s primary role is not to store cheap solar electricity and sell it when prices rise. Up to 700 MW/1,400 MWh of its capacity is reserved to respond to grid disruptions. That protection allows more electricity to move through existing transmission lines into Sydney, Newcastle, and Wollongong. In effect, the battery helps the electricity system get more from the network already in place. That is a tangible benefit, but its significance needs to be understood beyond those working in the sector.

Recognising that value does not mean setting aside commercial questions. How will batteries of this scale make money as household batteries and other large batteries compete for the same high-price periods? Waratah’s grid-protection role distinguishes it from a battery relying only on price differences, but how we pay for the services storage provides remains important. Its difficult delivery history, the questions about its commercial future and its contribution to the electricity system can all be acknowledged together.

The psychology of social licence has practical consequences for the energy transition. Evidence can explain the need for infrastructure, but it cannot substitute for trust. Consultation can provide a forum for concerns, but it cannot substitute for influence. And recognising what a completed project delivers need not diminish scrutiny of what went wrong along the way.

For governments and project proponents, the challenge is to connect the system-wide case for change with the local experience of it. That means making community influence visible and explaining benefits without dismissing costs. It obviously important that communities have been told why a project matters. More important still is whether they have had a meaningful part in shaping it and can see what it delivers.

Get in touch to discuss how to build community trust and meaningful local influence into the delivery of energy infrastructure.

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