A GUIDE TO BENEFIT SHARING OPTIONS FOR RENEWABLE ENERGY PROJECTS October 2019 FOREWORD AUTHORS AUTHORS’ ACKNOWLEDGMENT Taryn Lane Many people involved with renewable Akin Consulting energy projects across Australia have [email protected] contributed to the content in this guide. We are extremely grateful for their Dr Jarra Hicks willingness to participate and share Community Power Agency their experience and knowledge. [email protected] We would especially like to thank the The content of this guide draws on Australian Renewable Energy Agency, previous research and writing whose funding made this guide undertaken by the same authors: possible, the Clean Energy Council Hicks, J., Lane, T., Wood, E., Hall, who co-ordinated the project, and the N., Webb, A. and Mey, F. (2018). members of the Clean Energy Council’s Enhancing Social Outcomes from Wind project reference group who provided KANE Development in Australia: Evaluating detailed advice and feedback. Community Engagement and Benefit THORNTON We would also like to acknowledge the Sharing. Clean Energy Council, CEO, Clean Energy Council input of the Office of the National Wind Melbourne. October 2019 Farm Commissioner and the Australian Lane, T. and Hicks, J. (2017). Wind Alliance. Renewable energy has long enjoyed Community Engagement and strong public support in Australia. Benefit Sharing in Renewable Energy While this support represents a very Development: A Guide for Applicants to This report received funding powerful foundation for our transition the Victorian Renewable Energy Target from the Australian Renewable to a clean energy future, the industry Auction. Department of Environment, Energy Agency (ARENA). Land, Water and Planning, Victorian recognises that it cannot be taken The views expressed herein are not Government, Melbourne. for granted and that it is shaped by necessarily the views of the Australian the way that each and every project Lane, T. and Hicks, J. (2014). Best Government, and the Australian engages and operates within their local Practice Community Engagement in Government does not accept communities. Wind Development. ACT Government responsibility for any information or Benefit sharing – which aims to ensure Environment and Planning Directorate, advice contained within this report. that communities as a whole benefit Canberra. from a new development – has been Cover image: a growing feature of many renewable Community event at the energy developments for many years Hepburn Community Wind Farm. Photo credit - Studio Aton for now. Some approaches, however, are Hepburn Wind more established than others. The Clean Energy Council would like to see benefit sharing, tailored to the local context, become a feature of all renewable energy projects. With support from ARENA, we have commissioned this guide to share examples of leading practice and help proponents expand the options available to them so that we can maximise the positive local impacts for host communities. 2 AUTHORS’ ABOUT ACKNOWLEDGMENT THIS REPORT CONTENTS As the renewable energy industry matures, community Foreword benefit sharing is becoming increasingly commonplace as About this guide a means to integrate renewable energy developments into local communities in ways that are positive, rewarding and 3 What is benefit sharing? beneficial for both project proponents and local communities. 4 Principles of benefit sharing This guide includes strategies and case studies on different 5 forms of benefit sharing, including: Policy and finance drivers > neighbourhood benefit programs 6 What value does benefit sharing provide? > the creation of grant funds 6 Communities 6 Investors and owners > innovative financing methods that enable community 7 Developers co-investment or community co-ownership. 7 Regional development It also discusses benefit sharing strategies that go beyond 11 Context and community making cash-based contributions, such as: > creating impact through regional economic development 11 The intrinsic relationship with approaches (e.g. local jobs and contracting) community engagement 12 Traditional Owners > in-kind contributions (e.g. employee volunteerism) 14 Current benefit sharing benchmarks: > partnership benefits (e.g. industry capability networks and How much is appropriate? education opportunities). 14 Cumulative impact and transmission infrastructure The guide is intended as a practical tool to assist project 15 Types of benefit sharing proponents, financiers, policy makers and communities in 16 understanding the range of benefit sharing methods available. Neighbourhood benefit programs 20 Sponsorship, grants and legacy initiatives It presents the key principles underpinning an effective benefit 24 Local jobs, training and procurement sharing strategy and looks at current benchmarks for benefit 28 Employee volunteerism sharing in Australia across different projects and technology 30 Innovative products types. 32 Innovative financing and co-ownership The document emphasises the importance of integrating 32 Community ownership benefit sharing with robust community engagement processes 32 Community co-ownership and includes details to assist practitioners and advocates to 33 Community co-investment develop benefit sharing strategies that are tailored to local 34 Governance and regulatory considerations context. 36 Platforms 42 Beyond compliance-level activities Some forms of benefit sharing are more established than others in Australia, and different forms will suit different 44 Developing a benefit sharing strategy situations. This guide aims to share knowledge about leading 48 Setting and calculating practice and extend the repertoire of benefit sharing practice a budget for benefit sharing in Australia. The guide outlines examples of effective benefit 49 Defining the community sharing strategies being deployed overseas, particularly where 50 Theory of change it has become commonplace due to policy frameworks. 51 When to engage around benefit sharing The guide also outlines methods for developing a benefit 51 Social feasibility sharing strategy and working in partnership with local 52 Global trends communities. It outlines ways to: > calculate a benefit sharing budget 52 Planning and approvals processes 53 Legacy approaches > develop a theory of change to deliver the desired impact 53 Forms of co-ownership and co-investment > undertake social feasibility to refine and test 54 Solar gardens and virtual solar models the strategy in the community 54 Agri-solar > implement, monitor and evaluate the 56 Useful resources project in the community. 57 Appendix: example FAQs 1 Run With The Wind fun run at the Woodlawn Wind Farm. Photo credit - Infigen 2 WHAT IS BENEFIT SHARING? Community benefit sharing involves sharing the rewards of renewable energy development with local communities. It aims to integrate a development in the local community by contributing to the future vitality and success of the region. It is based on a desire to establish and maintain positive long- term connections to the area and to be a good neighbour. The concept of benefit sharing The boundary for the Importantly, the way in which is based on acknowledging that ‘community of benefit’ may a benefit sharing strategy the siting of renewable energy be defined in different ways. is developed and when it is infrastructure – especially when Benefits might be shared with introduced is key to how it is it is large scale – results in residences within a certain received in the community. changes in the local landscape number of kilometres of a Benefit sharing needs to be and community. Sharing the project or it may be open to integrated within a broader financial and other benefits of all people from identified local approach to community a project enhances the social settlements and townships. engagement. and economic outcomes for What is appropriate will be As such, benefit sharing may the local community, thereby different in different contexts. take many different forms making the change worthwhile. A benefit sharing strategy might and is necessarily contingent A successful benefit sharing involve a number of individual on the local context and strategy requires consideration benefit sharing techniques, the characteristics of the of how a renewable energy which together make up development. Within this project can add value in a local a benefit sharing strategy. diversity of options, the area and what it takes to be a Different benefits may be following principles on the welcomed development in a offered to different segments of following page will provide host community. the community. For example, it guidance. The form that benefit sharing is common for near neighbours takes is necessarily dependent of a project to be offered on the type of technology, scale specific benefits and the general of project and project context. local community offered others. Benefit sharing might include Often, a project will offer several providing funding (e.g. grants, benefit sharing techniques as sponsorships or scholarships), part of their benefit sharing establishing partnerships strategy to deliver a range of with important local groups desired benefits to different or projects, providing in-kind stakeholders in the local support or developing education community. and tourism initiatives. It might also include innovative options for financing (e.g. community co-investment) or innovative products (e.g. energy retailing options). 3 PRINCIPLES OF BENEFIT SHARING The following principles provide a useful framework