Social licence for new renewable energy projects

Companies that fail to cultivate social licence and gain community trust run the risk of renewable energy projects being delayed, changed or not getting off the ground at all.

There are several examples of this happening in the fossil fuel industry. The LNG sector has lost considerable ground due to anti-gas lobbyists, leading to new fracking projects being stymied. Adani battled for seven years to open and operate the Carmichael mine in outback Queensland, and their original plan has been severely curtailed.

Under the NSW Electricity Roadmap, projects over 30 MW in Renewable Energy Zones may be prohibited from grid connection if they face significant community opposition.

Even once trust has been built, it can be eroded or destroyed if the community considers the company has done the wrong thing - as in Rio Tinto's destruction of the Juukan Gorge rock shelters.

So what are the challenges around social licence, and how can companies in the renewable space avoid some of the pitfalls fossil fuel projects have faced?

The challenges in social licence

• Communicating and engaging effectively – even where a company wants to do the right thing, it may not be easy to convince the community and gain its trust. If adequate consultation and communication are lacking, a project can fail to proceed. For example, the Jupiter Wind Farm in the NSW Tablelands was rejected twice by consenting authorities. This was due at least partially due to the company’s failure to engage with local residents or to adequately address their concerns.
• Rushing the process – gaining approval and building a positive relationship can take considerable time to achieve, even up to several years.
• Countering misinformation – inaccurate and sometimes false information about projects can spread very quickly, especially on social media. Groups such as Citizens for Clear Skies in the U.S., and Stop These Things in Europe, North America and Australia, have prevented projects from advancing by spreading false information about wind turbines and solar farms. In 2021, the Fountain Wind Project in Shasta County California was denied a permit after it experienced significant opposition from a group called Stop Fountain Wind. The group claimed that turbines increase the risk of sickness and drastically reduce property values.
• Transparency – companies should present all relevant information to the community, and be upfront with them.
• Living up to commitments – once a project is underway, project leaders should ensure they honour commitments to the community to prevent trust from being eroded or destroyed.

How companies can cultivate social licence

Jan Taylor, Principal of JTA Australia, says the process of gaining social licence is not complicated, and really only requires a few essential steps.

1. Listen
   She says listening is the most important thing to do - even when people in the community are expressing anger about the project.
   
   ‘Pay the community enough respect to listen to their views,’ she says.
2. Be patient
   Taylor says it can take anywhere from six months to three years to build a relationship and gain a community’s trust.
   She also points out the importance of doing preliminary work (e.g. getting to know what is important to people) before launching.
   While trust takes time to build, it can be fostered by engaging in mutual dialogue, and always showing respect for stakeholder concerns.
3. Provide the right information
   Being transparent and providing accurate information are crucial factors when engaging with communities.
   
   ‘If you only go to community meetings every six months or so, you will need to be prepared to answer new questions,’ says Taylor.
   
   In providing information, companies need to able to communicate how the project provides economic benefits to the community. It’s vital to explain the social legitimacy of the project as well – that is, how it contributes to the wellbeing of the area and respects local values and customs.
   
   Companies also need to counter any falsehoods or inaccuracies with factual evidence.

So who does social licence well?

Taylor says some companies do this this better than others.

For example, she says that Santos did a ‘brilliant job’ obtaining social licence for a proposed gas generator at Port Fairy in Victoria. This was quite an achievement in such a picturesque town known for its lovely beaches, wildlife and annual folk festival. In the end, the project did not go ahead, but the company’s actions showed how a community could be won over.

On the other hand, Santos failed to gain social licence with the Narrabri gas project. in NSW. In this instance, Taylor says the community was divided.

‘No effort was made to bring people together. The company just didn’t click with the community.’

Another case is the Origin Energy Stockyard Hill wind farm project. While the company didn’t go ahead with all aspects of the project, Taylor says their work in gaining community trust was so good that their actions relating to compensation were legislated. She says what Origin did right was to take time, show respect, communicate and listen.

Companies can nearly always succeed in gaining trust and social licence by taking the right actions, she says.

‘When the right steps are followed, you can usually win over about 80% of the community.'