Community-first Framework for Electricity Transmission Development

As our nation transitions towards a renewable energy future, it is critical that all Australians, not just the energy market, play a central role in the planning and delivery of the future electricity system and that the needs, rights and opportunities for communities, industries and consumers are not being compromised to satisfy least-cost outcomes.

Many actors in the energy market recognised the Australian Energy Market Operator’s (AEMOs) Integrated System Plan (ISP) as the blueprint for our energy future. When meeting the National Energy Objectives (NEO), the ISP appears to represent an appropriate business model with respect to the National Energy Market (NEM). However, that the ISP and Regulatory Investment Test for Transmission (RIT–T) frameworks are clearly not fit for purpose as they do not consider matters beyond the NEO. The ISP and RIT–T do not consider state-level economic development, emerging industries, job creation, land use, emissions targets, environment, and social considerations. For these reasons, many stakeholders are starting to realise the current framework is not-fit-for-purpose.

While the ISP may one day serve a purpose, it is critical to first prioritise the needs and roadmaps of each state to ensure costs to its people are minimised, development opportunities maximised, transitioning workforces are supported, state Governments are meeting their objectives and not carrying unnecessary financial burdens imposed upon them for the broader benefit of the NEM.

This once-in-a-lifetime transition away from fossil fuels represents an opportunity to develop best practice policies, framework and enabling legislation that better integrate land use considerations, environment, emissions, economic opportunities, and community into the planning process. Increased policy certainty is in the interest of stakeholders across all sectors of the economy as moving towards a net zero economy by 2050 will generate substantial economic and employment opportunities. It is critical to ensure we transition to renewables in the most orderly and strategic way that delivers the best outcomes for Australians and provides more certainty to investors, industry, business, the transitioning workforce, and local communities.

Transmission planning framework should be more strategic, transparent, timely and well-coordinated, with meaningful community involvement. It is important that planning and investment settings build confidence among industry and communities to ensure we maximise the benefits of renewable energy development. The transmission planning approach should integrate local values and ensure local communities can influence the planning and investment process and directly benefit, where possible, from regional development opportunities.

Having routing and siting decisions guided by community through a more 'consistent', 'fair' and 'just' rationale will provide the greatest benefit to any electricity transmission project. Community-first framework, combined with a new set of rules, policy and planning instruments will produce more consistent, defensible, and transparent electricity transmission routing decisions.

Thinking about the local community where renewable energy infrastructure is planned to be hosted and thinking about the workforce as we transition away from coal is important to build trusting relationships with industry and the public.

Given that future renewable generator and storage development will be delivered by private companies with no statutory authority to access or acquire land, it is crucial that the level of community acceptance first be determined through meaningful discussions with communities before planning REZ transmission. REZ zones can then be progressed where acceptance levels are greater. For example, the Western Renewables Link (WRL) in Victoria is receiving an astonishing level of opposition. This opposition is not against the transition to renewables, but to the enabling framework. The communities along the proposed 190km overhead transmission corridor have been so adversely impacted (mentally and emotionally) over the past two years that if the WRL proceeds, it will likely result in a ‘transmission line to nowhere’. Communities have clearly spoken; “No landholder in this region will accept renewable generation or storage development on their land, as a direct result of the WRL”.  Social licence has been completely discarded. This presents major challenges in this REZ and is likely to result in an $800M transmission investment with no foreseeable benefit. If the framework is not urgently fixed, this will likely impact every new transmission build.

Putting Community First

A community-first framework will introduce a strategic and proactive process to ensure timely co-ordination of investment in transmission, generation, and dispatchable storage infrastructure across renewable energy zones (REZs), tailored to meet the needs of regional communities and the energy needs of each state. A community-first framework would better integrate land use considerations, environmental impacts, and community views into the planning process. This includes opportunities for earlier and deeper engagement with regional communities to help better manage impacts and to make the most of regional development opportunities for host communities.

It’s encouraging to see the Victorian Government is moving to adopt a community-first approach through its proposed Victorian Transmission Investment Framework (VTIF) as this can better build the widespread support needed to accelerate climate action. Adopting a community-first framework, followed by state-level REZ and grid planning will allow Victoria to take control of its own planning priorities, quantify realistic generation and firming capacity and reduce heavy dependence on costly and potentially unnecessary interconnector transmission corridors. If there is a need for interconnection to increase security, reliability, and resilience, this can later be addressed through the ISP or alternate planning tools.

The transformation of Victoria’s energy grid and the development of the VTIF provides a unique opportunity to reset the process on new and existing transmission projects and progress all developments under new framework that it better suited to a future decentralised system. It is not defensible to not apply the VTIF retrospectively to projects that have already commenced regulatory processes. The VTIF proposes a more robust, responsible, and defensible criterion to project assessment and development than the RIT–T or ISP frameworks. It is essential, for all stakeholders and indeed Victoria, that the assessments of these projects be brought under the proposed VTIF, without further delay.

The current ISP-first regime does little to actively consider issues beyond power system and cost-benefit modelling and this is where the heart of the issues around social licence lay. So, why is transmission still being planned under this framework? Because large-scale transmission has not been built in Australia for at least three decades and the rule book was not rewritten to facilitate the once-in-a-lifetime transition to renewable energy. The sheer lack of policy and lack of holistic planning is why the transition is stumbling.

A paradigm shift in how and where we generate, store and transport electricity requires a paradigm shift in thinking and best practice planning that considers all things beyond the energy system. A Community-first framework does more to actively consider this and will lead to more robust, reliable, and defensible solutions.

There is much work to do, especially when accounting for socioeconomic, welfare economics and environmental concerns. Recognising the need for public and environmental policy and developing new methods to apply this early in project development will minimise risks to project delivery, will increase confidence for renewable investors, and will better serve the environment, public and broader economic interest.

As fossil fuel plants retire across the nation, and our impact on climate become more urgent, there is too much at stake to adopt the current ‘decide, announce, defend’, ISP-first model of infrastructure delivery. There is too much at stake to not urgently consider state-level needs, roadmaps, policies, legislation, and objectives first. There is also too much at stake, with respect to social licence, to not be robust, transparent, and accountable in all cost-benefit tests.

There is an urgent need for regulatory reform to better facilitate acquisition of social licence for all industry participants. The reform required will take time that some may argue we do not have, but you must ask; what is the consequence of inaction on this much needed reform?

When you consider the 'business as usual' alternative, the cost of inaction will lead to a groundswell of opposition to overhead transmission projects across the nation and the market will dispense with any opportunity to acquire social licence.

The resulting material project delays will adversely impact the industry, economy, consumers, investors and above all, our legislated climate change objectives. We all need to do more to actively consider issues beyond power system and economic modelling in transmission planning decisions.