You need to build trust before you can build infrastructure: Engaging the community in Australia’s energy transition 

Australia’s energy transition is a nation-building opportunity, but we cannot build infrastructure without first building trust. A decade ago, this was done poorly. Communities were engaged late and infrequently, and benefit sharing was a novelty. Call this ‘Community Engagement 1.0’.

Since then, there have been many reviews, reports, and recommendations. Practice has improved greatly. Organisations are engaging more often and more openly and taking benefit sharing as a given. Call this ‘Community Engagement 2.0’. 

But the world has become more complicated. What communities need from energy companies and government agencies has changed again. Progress has unfortunately stagnated, and the consequences are dire. Approvals are stalling, costs are rising, and opportunities are slipping away despite a rapidly diminishing carbon budget. Developers and governments rely too often on compensation packages alone, rather than relationship building, to underpin community support. Community support in critical high-activity regions is wearing thin. Communities report engagement fatigue, confusion and frustration. 

At the same time, energy intensity is growing. Energy is increasingly an enabler of significant value creation in sectors like manufacturing, transport and artificial intelligence. Most energy infrastructure built in the last two decades has been in the pursuit of grid decarbonisation. This a just cause, but community support has remained elusive. How will communities feel about new energy infrastructure built largely to service new demand from AI data centres or resource processing facilities? 

It is time for a step change in community engagement and social value creation: ‘Community Engagement 3.0’. As an energy industry, and the government agencies that steward it, you must think bigger and do better. In doing so, every agency, developer, network operator and generator must do three things:

1. Develop a clear understanding of the communities you are addressing
2. Clarify community (and individual) needs
3. Embed best practice approaches to community engagement and benefits sharing

This article explores each in turn.

The terms ‘community engagement’ and ‘community trust’ are used regularly in energy circles. They carry an implicit definition of community, but in many cases that implicit definition is never properly articulated.  

Community can mean many things. A government considering a major regulatory or policy change could reasonably think that ‘community’ encompasses the whole electorate. A local solar developer might think of community as the nearest town, while a transmission line’s owner would consider all the towns and landowners along the corridor. Community might also refer to one or more Traditional Owner groups. 

Any community is never a monolith. Some members will be staunch supporters of a project, and others will be vehemently opposed. Many will be indifferent. Others will withhold judgement until the project evolves, and local benefits become clear. We have observed this through our work supporting an energy developer to identify, map and engage with the many different Traditional Owner groups their project affected. Any initiative that does not understand which stakeholders it serves, and their likely views, is dead on arrival. 

It is equally important to consider the broader world in which these communities exist. They confront cost of living pressures, issues with access to housing or healthcare, and could already be faced with industry development in other sectors – such as forestry, agriculture or mining. Energy projects inevitably interact with these factors, which might improve or hinder community support for a new project. 

The energy industry is rightly focussed on ‘social licence’. This is not a new term, particularly in mining. However, social licence is a transactional concept. It reflects a transfer between parties; that the community ‘permits’ an organisation to undertake a project, in exchange for some form of compensation or benefit. 

Social licence, while an important outcome, has also become a mindset – one which does not go far enough in the modern world. Sun, wind and rainfall are not private assets. If companies or governments seek to capture value from those assets, communities reasonably feel that they are entitled to their fair share. 

Thinking instead in terms of ‘social value’ can go a long way towards shifting your mindset from transaction to partnership. Under social value arrangements, communities share in a project’s upside. This might come from targeted initiatives, like workforce upskilling during construction, local content requirements, or developer donations to community organisations. More recently, communities are also considering equity in energy projects. Leading organisations are also helping communities through the process of identifying their needs through approaches such as Participatory Scenario Planning. Effective benefits sharing and social value creation can be key to unlocking social licence – but crucially, social licence is the end, not the means. 

Social licence and social value are also distinct from ‘compensation’. Even if project benefits are equitably distributed, there might still be specific members of the community, or the whole community, who are entitled to compensation for tangible or intangible lost value. Examples of tangible lost value might include the acquisition or use of private land, or activities that might hinder agricultural activity. Intangible lost value can be harder to pinpoint but is no less important. A common source is visual amenity impact, where some individuals might feel that some level of beauty or natural capital has been lost. In either case, direct payments to landowners, neighbours or the whole community might be necessary, in addition to benefit sharing schemes. 

There is no substitute for quality community engagement, genuine listening, and fair benefits sharing. It takes time, diligence and genuine care for the community. A few universal best-practice fundamentals can support your efforts:

• Engage early and openly, bringing stakeholders in before decisions are made. Communities are looking for partnerships, not presentations. Project specifications, benefit schemes and payments must be co-designed with affected communities. Transparent, inclusive processes build trust in both the outcomes and those delivering them.
• Plan, grow and learn. Establish a clear principles-led plan for your engagement with a community, implement it, and be willing to adapt and learn. Make sure these lessons are embedded across all future engagements, and that your approaches are regularly stress-tested and reviewed.
• Embed community value as a core component of project delivery. Show shareholders and Ministers how local benefits reduce risk and boost project certainty. Structured approaches, such as those used by successful projects, enable more robust supply chains and stronger stakeholder relationships.
• Invest in long-term, visible local presence. Be available and physically present, even at the most senior levels. Regional hubs and local field teams provide communities with accessible points of contact and ensure ongoing communication beyond initial approvals.
• Align benefits with local aspirations. Early, genuine engagement helps to identify community interests, creates local ownership and pride, and can unlock opportunities for skills, jobs and investment that last beyond the project itself. Consider the circumstances of relevant communities and individuals, accounting for existing infrastructure and concurrent developments.
• Support national and regional coordination to reduce duplication, build transparency, and accelerate delivery. Tailor your engagement to communities’ needs, particularly if they are subject to other concurrent developments. Align your efforts with those of nearby developers or agencies, and pool resources where it is possible or beneficial. Ensure you understand and can explain to communities how your project fits in the web of broader developments. 

To sum up, the secret is… that there is no secret. Dreams of a social license silver bullet are just that: dreams. However, if you understand the community you are addressing, identify their needs, and follow best-practice rules, you will maximise your chances of community support, ongoing social value, and a successful project.

Get in touch to discuss how Nous can support you enhance your community engagement.

Connect with Daniel Blakeley and Eamon Ritchie on LinkedIn.