THE GOVERNANCE GAP: MAKING THE TRANSITION COUNT
By Vanessa Pilla
INTRODUCTION Australia’ s energy transition represents the largest infrastructure investment in regional Australia’ s history, with more than $ 200 billion in renewable energy and transmission projects currently underway. 1 Forecasts suggest between $ 9.7 – 11.7 billion in regional benefits by 2050, including $ 1.9 billion for communities directly hosting renewable infrastructure. 2 Yet these opportunities are at risk: a critical governance gap threatens to undermine delivery and weaken the social licence essential for successful transition.
‘ Social licence’ has become the most cited risk in regional development, reflecting widespread concern that communities are not being brought along with the pace and scale of investment. Community benefits and social value creation are widely recognised as pathways to building this licence, but current arrangements reveal a significant expectation gap. Communities increasingly interpret“ benefit sharing” as long-term participation in economic opportunities, where possible through ownership stakes or revenue streams, while many developers continue to rely on one-off grants or sponsorships. 3
Social value refers to the broader net benefits generated by the transition beyond infrastructure delivery— such as quality jobs, lifelong skills, community wellbeing and long-term regional development.
This disconnect between expectation and practice not only undermines trust but perpetuates regional inequities. Unless governance frameworks evolve to provide clarity, coordination and accountability, the promise of the transition will remain fragmented and ad-hoc, rather than delivering the enduring local value that communities expect and the energy sector requires for a Just Transition.
This analysis examines how governance reforms can shift the transition from fragmented benefit delivery to a platform for enduring social value. It draws on evidence from industry roundtables with twelve developers and network operators, an industry survey, targeted interviews with RE-Alliance, Community Power Agency, and Planning Institute Australia( NSW), and a review of existing benefit-sharing frameworks. Together, these insights highlight the governance barriers that must be addressed for communities to participate equitably in transition benefits.
UNDERSTANDING THE CURRENT GOVERNANCE LANDSCAPE The governance barriers to social value creation are evident across all levels of government, creating a fragmented system that inhibits rather than enables equitable participation in energy transition benefits.
Federal Government: Strategic leadership amidst fragmentation The Federal Government’ s role is to provide strategic coordination and regulatory oversight through AEMO and the Australian Energy Regulator. In practice, however, overlapping initiatives have created a web of competing strategies that undermine clarity and equity. The Department of Climate Change, Energy, the Environment and Water( DCCEEW) also plays a significant role in reform, including
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