An evolving challenge: helping communities harness the energy transition for positive transformation

Authors: Sarah Fitzgerald, Melissa Ross
electrical power lines

At a glance

As 2050 edges closer, the necessity to reach mid-century net-zero goals is being challenged by the complexity and enormity of change required. To decarbonise, our global energy systems must undergo a once-in-a-generation transformation that will disrupt communities around the world. For governments, organisations and industries to execute emissions reduction ambitions, they must overcome complex, interconnected technical, social, environmental and economic challenges, all of which will play out at both a macro and micro level within developed and developing nations alike. 

As 2050 edges closer, the necessity to reach mid-century net-zero goals is being challenged by the complexity and enormity of change required. To decarbonise, our global energy systems must undergo a once-in-a-generation transformation that will disrupt communities around the world. For governments, organisations and industries to execute emissions reduction ambitions, they must overcome complex, interconnected technical, social, environmental and economic challenges, all of which will play out at both a macro and micro level within developed and developing nations alike.
The big infrastructure build accompanying this necessary transformation will trigger the dramatic and ongoing evolution of communities around the world – both through the development of new green energy infrastructure, and the withdrawal or repurposing of existing fossil fuel infrastructure. But for this to happen, communities will need to be open and willing to change. SHOCKED, one of the largest global studies conducted among the energy sector C-suite, revealed that 70% of energy sector leaders identified community opposition as one of the largest obstacles to securing new clean energy project approvals. To de-risk the energy transition and build long-term societal resilience to climate risk, effectively addressing the potential barrier of opposition through meaningful community engagement and benefit sharing will be key.

Change and complexity ahead for all types of communities

The impact on communities through the delivery of energy transition infrastructure will be highly nuanced and specific to geographic, demographic, cultural and historical contexts. 

In urban centres and cities, for example, the electrification of infrastructure and move to new forms of green energy generation influences both the structure and rhythm of local communities – from transport and mobility modes to waste management strategies, building design and consumer behaviours – all will be affected to different degrees. 

Rural and remote communities, on the other hand, are more likely to be impacted by the 'big build' of the transition through the delivery of large-scale energy hubs, such as solar and wind farms, and energy storage solutions, such as pumped hydro and utility-scale batteries. New and extended transmission and distribution networks, connecting green energy generation to end users, will impact many communities, particularly rural communities in sparsely populated areas. 

Aside from physical infrastructure, the shift to renewables will also have economic and social implications. Places that have historically depended on fossil fuel extraction and processing for jobs and economic growth will need to pivot to embrace new industries and transition or repurpose existing assets, with significant impacts on existing and future workforce planning. Better understanding these communities – who they are, what interests them and how we can best engage with them is crucial to understanding sentiment and mitigating socio-economic risk. Doing so will also create opportunities for a prosperous, sustainable future through the creation of new industries and employment opportunities.

Securing social acceptance and permission to proceed

Most renewable energy projects involve significant environmental and social impact assessments, evaluations, permitting and approvals. Engaging community is a minimum requirement of these processes. Effective communication and stakeholder engagement is essential to developing enduring relationships within our communities — these processes are an opportunity to truly understand who the community is, what the local conditions are and how to identify opportunities for local benefit. 

Undertaking engagement with community early on during project lifecycles builds trust and drives a values-based approach. Taking a values-based approach means ensuring that actions taken, and decisions made, are aligned with community values. This approach results in authentic relationships with community.

Effective community engagement is also key in ensuring that the infrastructure delivered is fit-for-purpose. The Australian National University’s Institute for Infrastructure in Society Next Generation Engagement Program, conduct Australia’s largest study on engagement and infrastructure delivery. Results identified that while stakeholder pressure was a leading cause of project delays, carefully planned and effectively delivered community engagement not only paved the way for smoother approvals processes, but also engendered long-term community resilience by ensuring the needs and wants of local residents were heard and responded to through the design and planning phases. Indeed, the need to secure genuine social acceptance by working hand-in-glove with communities to build hyper-local responses was identified as one of the findings of the SHOCKED study.

An ongoing commitment to building community understanding founded on legitimacy, credibility and trust also eases the challenge of community opposition. Increasing public understanding through innovative community engagement methods, awareness campaigns and curriculums will enable and encourage communities to be more accepting of change. However, building social license is a continuous process – organisations, stakeholders, governments and industry will need to create an ongoing, two-way dialogue with communities to highlight the potential disruptions, expected impacts and future benefits of energy projects.

Opportunities for Indigenous ownership and investment

Identifying opportunities for local investment in clean energy has the potential to foster economic empowerment, strengthening the relationship between project and community. First Nations groups can bring immense value to this approach, as active contributors to the development of projects. Whether as governance members, investors or infrastructure owners, meaningful economic partnership with First Nations groups is an opportunity to enhance access and equity in the energy transition, as well as changing the knowledge base and perspective of how to sustainably build critical infrastructure. This is particularly important in countries where a large proportion of infrastructure planned to enable the energy transition is set to be built on First Nations land. For example, a recent report found that 43% of renewable energy and transmission infrastructure in Australia is cited for Indigenous land.

The First Nations Clean Energy Network is a collaboration of First Nations people working to ensure our people participate in and benefit from the renewables boom. The Network points to Canada as an example of what the energy transition could look like for First Nations groups in Australia. In Canada, Indigenous communities are now the second largest owner of clean energy assets, representing approximately 20% of Canada’s electricity generating infrastructure and $167m in net annual returns. Currently, that Federal government has contributed $920m up until 2027 for grant funding for Indigenous clean energy projects. That doesn't include energy efficiency in housing.

The First Nations Clean Energy Network is working to ensure similar regulatory and economic support is embedded in Australia so that Aboriginal and Torres Strait Islander people can participate in the energy transition in a related way. The First Nations Clean Energy Network has developed best practice principles for community engagement with First Nations and have been working with industry and peak bodies such as the Clean Energy Council to promote equity stakes and partnerships, local skilled jobs and benefit sharing options. Over the past 12 months First Nations people around the country have been participating in roundtables to feed into the Federal Government’s development of the First Nations Clean Energy Strategy. The key takeouts from communities include the need for improved energy security and affordability, support to meaningfully engage and negotiate with proponents including incorporating principles of free prior and informed consent (FPIC), and resourcing and capacity building for First Nations people and representative bodies.”

Ruby Heard, Steering Committee Member – First Nations Clean Energy Network 

Establishing meaningful relationships with Indigenous and First Nations communities is an opportunity to learn from past mistakes and build a more sustainable, equitable tomorrow. Encouragingly, there are already successful examples of partnerships between developers and Indigenous groups on energy projects. For instance, in Western Australia, traditional owners have partnered with a Filipino developer on a billion dollar renewable energy project that will realise the construction of wind, solar and battery storage. Similarly, in the Kimberley region of WA, traditional owners groups and the Kimberley Land Council have partnered with Pollination to back a large solar farm and hydrogen plant. Under this proposed arrangement, First Nations groups will hold 75% ownership of the project.

Evolving economies, assets and workforces

While some communities are preparing for new and significant infrastructure builds, others are transitioning away from fossil fuel extraction and processing industries. To thrive, communities must maintain and enhance the productivity of their assets and workforces. This presents a significant challenge for some communities whose economic growth has historically been supported by fossil fuel industries. This transition to new economies will require existing assets to be repurposed. 

Grangemouth offers a case in point. Located in the South of Scotland, the town is home to the country's only crude oil refinery. The refinery employs hundreds of local people and is responsible for four percent of Scotland’s GDP. As the country increases its renewable energy mix and moves away from oil, the Scottish Government is taking pre-emptive steps to mitigate the impact on individuals and companies. 

Many communities around the world are in a similar position. In Queensland, Australia, the community of Stanwell is home to the region's largest coal-fired power station. GHD recently advised on the feasibility of a large-scale green hydrogen project on the site of the existing power plant. As communities de-couple economically from fossil fuel industries to adopt a renewable future, consideration of how to repurpose existing infrastructure to maintain a viable economic base will become increasingly critical. 

As industries and assets transition, so must local workforces. The International Renewable Energy Agency (IRENA) estimates that by 2050, 122 million people will be employed in energy sector jobs. Training programs are integral to retaining, skilling and shaping the workforces of the future. The International Energy Association estimates that 16 million workers could shift to clean energy industries if re-trained and taught additional skills. In Australia, projects such as the Latrobe Valley and Gippsland Transition Plan are paving a way forward in preparation for change. The Plan outlines a roadmap to foster the growth of sustainable industries by 2035, including a focus on how to re-train, re-skill and create long-term jobs for workers in transitioning industries. GHD Design is advising Latrobe Valley TAFE as part of the Plan, a program focused on re-training people in the community for new clean energy jobs. 

While challenging, industry and workforce transition presents an expansive opportunity for communities to enhance long-term productivity. In the future, competition for talent will shape those communities ready to welcome the growth of new, green industries. 

Putting people at the heart of the transition

While communities are inherently complex organisms in a constant state of evolution, the urgency and scale of the energy transition will catalyse change at an unprecedented rate. In preparation, community leaders must ready their locales to welcome new industries, transition existing assets and compete in the war for talent.  

As we strive to achieve net zero emissions by 2050, putting people at the heart of the energy transition will be key to achieving a fairer, more equitable future for all. By considering the needs of all types of stakeholders across any given community, project owners can co-create more resilient solutions that will better serve the needs of communities now and in the future.