Social licence in renewable energy projects: Part 2 – stakeholders and strategies

As Australia advances toward net zero, the success of renewable energy projects increasingly depends on earning community trust through a social licence. In the second part of our two-part series on social licence in renewable energy, we explore the principles of meaningful engagement and best practices to build and maintain community trust.

Australia’s journey to net zero is backed by billions in public and private investments, with large-scale renewable energy projects underway across the country. Yet, the economic, technical, and environmental strengths of these projects alone no longer ensure their success. Developers must also obtain and maintain a social licence—an informal, community-based approval that embodies trust, legitimacy, and ongoing stakeholder engagement.

In part one of our series, we examined the importance of social licence and differing guidelines across Australia. Here, we take a closer look at stakeholder management and what meaningful engagement really looks like.

Identifying key stakeholders

In renewable energy projects, where the benefits and burdens are often unequally distributed, proactive and inclusive engagement is not only an ethical imperative but also a strategic necessity.

A key step in engagement is identifying who the stakeholders are. In renewable energy projects, these typically include:

1. Local residents and landowners who live near or on project sites.
2. Indigenous communities with legal or traditional rights to land and resources.
3. Local governments and planning authorities.
4. Environmental and conservation groups.
5. Community-based organisations.
6. Investors and developers.

Each group will have different priorities, ranging from environmental protection to economic opportunities, and these perspectives must be understood in context.

Principles of meaningful engagement

Meaningful stakeholder engagement involves a two-way dialogue where stakeholders are respected as co-creators of project outcomes.¹

Key principles are:

1.	Transparency	Open communication about project goals, risks, timelines, and potential impacts. This includes making technical documents accessible and understandable to non-experts.
2.	Inclusivity	Top-down approaches have been met with criticism from locals due to a lack of early transparency and communication, sidelining environmental and cultural concerns for economic gain, and inequitable burden-sharing. Many residents have voiced that they shoulder the costs (e.g., disruption, deforestation and visual impact of such infrastructure) while the benefits (e.g., clean energy and profit) flow to companies and more urban areas.2 It is integral for developers to ensure that all affected voices, especially underrepresented groups such as women, youth, and Indigenous peoples, have the opportunity to participate in discussions and decision-making.
3.	Responsiveness	Taking stakeholder concerns seriously, adjusting plans where necessary, and providing timely feedback on how input has influenced project design or operations.
4.	Continuity	Engagement should not end after the initial consultation. Maintaining dialogue throughout the project lifecycle, including construction, operation, and decommissioning, is crucial to sustaining trust.

The role of First Nations rights and consent

Engagement must also be aligned with the principles of Free, Prior and Informed Consent (FPIC), particularly in cases where traditional lands and livelihoods are affected.³ FPIC is a rights-based framework that requires developers to respect Indigenous sovereignty, legal entitlements, and cultural values. Ignoring or minimising this obligation not only jeopardises the social licence but may also lead to legal and financial consequences.

As of July 2025, new research suggests that First Nations people in Australia may have the legal ability to veto clean energy projects.⁴ Unlike mining, oil, and gas projects, which benefit from statutory pathways that allow developers to proceed even if native title holders object, there is no equivalent pathway for clean energy developments under the Native Title Act’s future acts regime. Developers of wind, solar, and battery projects need to instead enter into an agreement that deals with native title consents in the form of an Indigenous Land Use Agreement (ILUA). An ILUA is a voluntary agreement between native title holders and other parties regarding the use and management of land or water where native title exists or may exist.⁵

Some jurisdictions, such as Queensland and Western Australia, now explicitly require ILUAs for renewable projects in most circumstances. South Australia is also moving in that direction through proposed legislation.

Developers should therefore understand that respecting First Nations rights is not just a legal or ethical obligation, but a strategic imperative for securing social licence. They must:

1. Obtain informed and voluntary consent from First Nations landholders. It is no longer ‘good practice’ to do so, but a legal necessity for most clean energy projects on native title land. Projects that fail to secure this consent risk not being able to proceed at all.
2. Engage respectfully and continuously without being tokenistic. Land access agreements increasingly involve multiple stages of approval throughout a project’s lifecycle. Developers must build long-term, trust-based relationships, not a one-off checkbox.
3. Choose partnership over extraction. The Yindjibarndi Aboriginal Corporation (YAC) partnered with Filipino renewable energy company ACEN Corporation for a 750 MW wind, solar and battery development on Yindjibarndi Country. YAC’s co-ownership stake of 25-50%, a guaranteed equity contribution through a favourable shareholder role, and the selection of ACEN for their trust, credibility and alignment with First Nations’ values were clear reasons for the project’s successful progression.⁶

Potential challenges

While the overall principle of social licence is widely endorsed in policy, its implementation remains vague, subjective and is inconsistently applied. Policymakers and planning authorities routinely refer to the need for community acceptance or social licence, culminating in the guidelines (see our summary in Part 1), yet there remains no clear legal definition or binding framework that explains how it can be achieved or measured. This ambiguity and lack of cohesion creates substantial risk for project proponents and investors in both the approval and operational phases of project development.

In May 2025, the $1 billion Moonlight Range wind farm project in Queensland was blocked from progressing. Despite having received conditional planning approval, the decision was subsequently overturned by the Queensland government on the basis of insufficient community consultation and the absence of overriding community acceptance. These terms lack statutory definition or procedural benchmarks, leaving project developers with limited guidance on how such thresholds are assessed or satisfied.⁷

Additionally, there is great tension between communities and developers because the parties often have different priorities and considerations. Transmission Company Victoria stated it consulted with almost 500 landholders over an 18-month period and held consultations until late 2024 for their transmission line proposals. Despite these efforts, the project has continued to face sustained criticism and opposition because it is deemed to be unnecessary, slow to deliver and harmful to regional communities and the environment.⁸ This project highlights the growing disconnect between what developers consider meaningful engagement and what affected communities actually perceive as genuine inclusion.

Best practices

Despite such challenges, it remains clear that social licence is, and will continue to be, a critical factor in renewable energy project approvals. Developers should therefore remain vigilant and mindful about incorporating social licence meaningfully and consistently by practicing the principles below.⁹

As the global transition to renewable energy accelerates, the social dimensions of energy development have become just as critical as the technical specs and environmental obligations. A project may meet all regulatory requirements and boast cutting-edge technology, but without the trust and support of local communities, its success remains uncertain. The concept of social licence to operate underscores a fundamental truth: energy transitions must be not only low-carbon but also equitable, inclusive, and grounded in local legitimacy.

Looking ahead: what’s on the horizon?

A Parliamentary Inquiry is underway into the impact of Renewable Energy Zones (REZ) on rural and regional communities and industries in NSW.¹⁰ The inquiry will report on wide ranging issues including:

1. The adequacy of the shared benefits being offered to neighbours of large-scale renewable projects.
2. Projected impact on visitation to regional areas with renewable energy zones resulting from changes to land use.
3. Adequacy of community consultation and engagement in the development of REZs and associated projects.

The last hearing in relation to this inquiry was held on 17 July 2025, and the final report is still pending.

As the sector awaits the committee’s report, proponents, investors and community stakeholders will be watching closely for recommendations that could influence project approvals, consultation requirements, and benefit-sharing frameworks. In a policy environment where social licence is increasingly pivotal, the inquiry’s outcomes may set important precedents for how Renewable Energy Zones are planned, developed and integrated into regional communities across New South Wales.

Want to find out more?

Explore part one in our series on social licence, where we explore the meaning of social licence in renewable energy projects and differing guidelines across Australia.

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.

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¹‘National guidelines: Community engagement and benefits for electricity transmission projects’, Energy and Climate Change Ministerial Council, (Web Page, July 2024) < https://www.energy.gov.au/sites/default/files/2024-07/national-guidelines-community-engagement-benefits-electricity-transmission-projects.pdf>.

²Adam Holmes, ‘Australia’s Regions Face ‘Social Licence’ Balancing Act as 2030 Renewable Energy Targets Come Closer’, ABC News (online, 10 April 2025) <https://www.abc.net.au/news/
2025-04-10/regional-australia-grapples-with-renewable-energy-projects/105155280>.

³‘Performance Standards on Environmental and Social Sustainability’, International Finance Corporation (Performance Standards, 1 January 2012) 41 <https://www.ifc.org/content/dam/
ifc/doc/2010/2012-ifc-performance-standards-en.pdf>.

⁴Lily O’Neill and Kathryn Thorburn, ‘First Nations at the Forefront: The Changing Landscape of Clean Energy Agreements in Australia’ (2025) 127 Energy Research & Social Science 1.

⁵‘About Indigenous Land Use Agreements (ILUAs)’, National Native Title Tribunal (Web Page) <https://www.nntt.gov.au/ILUAS/Pages/default.aspx>.

⁶O’Neill and Thorburn (n 4) 4.

⁷Sophie Vorrath, ‘Industry Slams Axing of $1 Billion Wind Farm as “Highly Political,” as Doubts Raised Over Objections’, Renew Economy (online, 27 May 2025) <https://renewecono
my.com.au/industry-slams-axing-of-1-billion-wind-farm-as-highly-political-as-doubts-raised-over-objections/>.

⁸Holmes (n 7).

⁹‘Performance Standards on Environmental and Social Sustainability’ (n 3) 3-11.

¹⁰Portfolio Committee No. 4, Regional NSW, ‘Terms of Reference’ (10 September 2024).