Economic, Education, Jobs and Skills Committee: Community Energy Projects (1)
CRISP (Mildura) — I rise to talk on the inquiry into community energy projects that was tabled this week. I would like to thank the staff and my fellow members for their work on this report, particularly as energy is a very hot topic out there in the community at the moment. It was a challenge to remain very focused on the terms of reference of this report, which were about community energy. Through this process we did hear, take note of and learn a great deal about the larger energy debate and the larger energy issues. I will focus on what our communities are very much interested in as a result of the significant debate on energy that is occurring. The question is how to channel that interest to be most effective to all of our communities. I am going to focus on finding 6 in the report today, and that finding is:
Community energy groups can develop projects with less financial risk if they partner with renewable energy developers who can provide equity, expertise and better economies of scale.
That came about really by looking at a whole number of things, including, as described in the report:
Collaboration with renewable energy developers enables community groups to participate in the energy economy without taking on too much financial risk. Community energy groups and commercial developers should be encouraged to work together to develop renewable energy projects because these projects have a greater chance of financial success and community support.
What we are talking about here is sweat equity. Communities have something to offer in this energy debate that we have at the moment. In fact it is something of value because they understand the local communities, they understand the local planning laws and they also understand their local energy network. The last thing anyone developing an energy project wants is to be bogged down in local planning, to get caught up in all those issues, to end up with objectors and to have to take the project to VCAT. There are considerable challenges in developing an energy project, and there are three arms, as I see it. The arms are that you need to get local government approval, you need to get access to the grid and you need to get the financial backing. You have got to get those three stars to line up.
Of all of those, larger commercial companies know least about these local communities, how they work and also how to meaningfully engage with them, so this gives communities great power, and that power can be turned into something of real value. They can gain some equity in these projects. Communities can be granted that by helping companies through a local government project or it could be through a discount to buy into that project. That will then establish something of value and provide communities with an income stream, and there were many examples put to the committee demonstrating how certain communities can in fact use that then to build and strengthen their communities.
There is a real opportunity here, but I cannot emphasise enough that it is best done as a partnership. If a community wants to go this alone, it is too complex a task. There is a great deal to be known about grid connections and there is a great deal to be known about the financing of a project, and then a project has to be managed. Once they are built — in my case it is solar — they do largely look after themselves, but they still have to be managed, and volunteer community groups often will struggle in that management area. That is something that became very clear. Time and expertise and longevity of such community groups was a concern because these projects will last for 20 or 25 years and communities change in that time. Having a structure based around a partnership with sweat equity being rewarded in one way, shape or form is the most secure way for our communities to go about making a difference to our energy future.
Going it alone has too many risks and will end in failure, which will not benefit our community. We need to have everybody focused on the best possible solutions for managing the energy crisis we are working our way through. This is all hands on deck with everybody working together. Partnerships and sweat equity are very much something that communities have benefitted and can benefit from.