Social licence in renewable energy projects: Part 1 – groundwork and guidelines

As Australia moves toward net zero, renewable energy projects must now earn community trust through a social licence to succeed. In part one of our new two-part series, we explore the concept of social licence and how it can be achieved in the world of renewable energy.

Australia’s transition to net zero is now supported by billions of dollars in public and private investment, with large-scale renewable energy projects underway nationwide. However, the economic, technical and environmental merits of these projects alone are no longer sufficient to guarantee success. Project developers must also secure and maintain a social licence – the informal, community-based approval that reflects the trust, legitimacy and ongoing engagement with affected stakeholders.

Unlike statutory approvals, a social licence is intangible and dynamic. It is earned over time through transparent communication, genuine engagement, and shared benefits. Without it, technically sound projects can face costly delays, reputational damage, or cancellation. Securing social licence is therefore essential to the planning and delivery of renewable energy projects.

What is ‘social licence’?

A social licence refers to the ongoing acceptance and approval of a project by affected communities and stakeholders.¹ It is not granted by regulators but is earned through sustained relationships, demonstrated accountability, and a genuine commitment to shared outcomes. Social licence is inherently fluid; levels of community acceptance can evolve throughout a project’s lifecycle, ranging from passive tolerance to active community support. Its continuity depends on project management and the extent to which engagement remains genuine and responsive throughout the project lifecycle.

Why does social licence matter in renewable energy?

Securing a social licence has tangible implications for project outcomes. Where it is lacking, communities may organise legal challenges, political campaigns, or direct protests that lead to delays, increased costs, or cancellation.² Conversely, when communities are meaningfully and respectfully involved, projects are more likely to proceed smoothly and enjoy long-term support.³

The Tasmanian Dams case (Tasmanian Dams) remains one of Australia’s most significant legal and environmental conflicts, and an early illustration of the power of social licence in shaping infrastructure outcomes.⁴

The proposed hydroelectric dam on the Franklin River in southwest Tasmania sparked intense opposition from environmental groups, Indigenous communities, and the broader public, despite having political and state-level approval. The campaign against the dam mobilised national and international support, culminating in mass protests and widespread civil disobedience. Although the project was ultimately halted by a landmark High Court decision that upheld federal environmental powers, it was the sustained public resistance that first eroded the project’s social licence.

The case revealed that legal authority alone is insufficient where there is a profound deficit in community trust and legitimacy. Tasmanian Dams set a precedent for how deeply public sentiment can influence the fate of large-scale energy and infrastructure projects, well before the term ‘social licence’ had gained prominence. Projects that overlook public sentiment or fail to reflect community values risk facing opposition that can derail them entirely.

Are there social licence guidelines?

Yes, as of July 2025, social licence guidelines have been released at both a federal and state/territory level, underscoring the growing recognition of social licence as a critical factor in the successful development and deployment of renewable energy projects in Australia.

Notably, Queensland has imposed new laws under the Planning (Social Impact and Community Benefit) and Other Legislation Amendment Act 2025 that require solar projects to secure a social licence through community impact assessments and benefit agreements.⁵ This not only applies to new projects, but also retrospectively to projects that are currently under assessment.

Under this regime, solar farms will now be ‘impact assessable’ and undergo a comprehensive assessment process led by the State Assessment and Referral Agency (SARA) for large-scale projects.

The key elements of the new framework include:⁶

1. Conducting a Social Impact Assessment (SIA) that evaluates potential social impacts on the affected community, proposes mitigation strategies, and includes ongoing monitoring and updates throughout the project’s lifecycle.
2. Entering into a Community Benefit Agreement (CBA) with the local government that sets out commitments such as financial contributions, infrastructure improvements and community programs.

While the new laws will promote transparency, consistency and help build positive relations between developers and affected communities, there are several practical implications that solar developers and investors should be mindful of, such as:

1. Longer timelines and delays due to new impact assessments and community consultations.
2. Increased costs, such as expert input and other resources used to develop the SIA and CBA.
3. Legal and approval risks if the project fails to comply.
4. The essentiality of community engagement.

Want to find out more?

Explore our second part in the series, where we explore the benefits and challenges of social licence, how it is earned with stakeholder engagement, plus First Nations rights and strategies to build lasting community partnerships.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.

¹‘Appendix 8: Social Licence’, Australian Energy Market Operator (Appendix to the Draft 2024 Integrated System Plan, December 2023) 5 <https://aemo.com.au/-/media/files/stakeholder_
consultation/consultations/nem-consultations/2023/draft-2024-isp-consultation/appendices/a8-social-licence.pdf>.

²Energy Action, ‘Build Social Licence for Renewable Projects’, Energy Insights (Web Page) <https://energyaction.com.au/social-licence-renewable-projects/>.

³Yoorndoo Ilga Solar Project; Nari Nari Tribal Council regarding the Murrumbidgee floodplain.

⁴Commonwealth v Tasmania (Tasmanian Dam Case) (1983) 158 CLR 1.

⁵April L, ‘Navigating Queensland’s new ‘Social Licence’ Requirements for Solar Projects’, Energy Matters (Online Article, 21 May 2025) <https://www.energymatters.com.au/renewable-news/navigating-queenslands-new-social-licence-requirements-for-solar-projects/>.

⁶Planning (Social Impact and Community Benefit) and Other Legislation Amendment Act 2015 (Qld).