TasFarmers Matters - your weekly wrap from the State's peak farming body

TASFARMERS is increasingly aware of the pressure on agricultural land to host renewable energy projects or associated transmission infrastructure.

The balance of societal needs for both food security and low-emission energy supply has never been at a greater point of debate than it is today.

TasFarmers has been a strong advocate for all energy project proponents being required to provide an ongoing share of the “strategic benefits” to landholders and communities hosting infrastructure.

This both creates community support and allows affected landholders to re-invest benefits into their agricultural operations to offset reductions in farm productivity caused by hosting these projects.

For clarity, Strategic Benefit Payments are a relatively new approach to creating social licence and are payable in addition to the traditional Land Acquisition Act compensation payments made due to a reduction in land value and lost income during construction.

As a starting point in establishing what an equitable and fair strategic benefit-sharing arrangement is, we firmly believe that the size and length of the “net consumer benefit” must be identified.

Net consumer benefit in relation to an energy transmission project is the annual financial benefit that the project creates for all connected consumers.

It is the same measure used to justify a project by proponents and therefore should be the measure by which a benefit-sharing arrangement is derived which gives a project social licence.

For example, Project Marinus and its interconnected North-West Transmission Development (NWTD), have been justified for project approval on the grounds that it will provide the average Tasmanian residential consumer with an annual renewable energy saving of between $90 and $165 a year.

To allow a smooth pathway for this saving to be created for residential customers, a small share of the associated annual saving would be returned to the landholder hosting transmission assets through a strategic benefit payment each year – leaving the majority and lion’s share of benefits to be retained by the consumer.

This creates a pub test that would be accepted by all home and business owners.

There has been much written in recent times about society’s failure to respond quickly enough to climate change and reduce global warming.

It could be argued that our failure to respond quickly is directly linked to our ability to create social licence for renewable energy projects with hosting landholders.

Many of our legislators either don’t understand agriculture and the rural community, don’t care or both? Landholders are often in very different locations to constituents of capital cities and politicians who make the decisions.

It is here that renewable energy proponents and governments that understand the agricultural community have a role to play in creating a policy environment that benefits all of society.

Tasmania is a prime case in point, with several high-profile renewable energy projects not progressing due to community and landholder hosting concerns.

This puts in jeopardy the state’s ability to increase Tasmanian Renewable Energy Generation by 200 per cent in 2040.

 It was pleasing to recently see that the Cellars Hill Windfarm would provide a $1000 energy subsidy to house[1]holders and businesses in Bothwell or any household within 12 kilometres of a project turbine for the life of the project.

 What better way to create a social licence, than by the sharing of project benefits with the host community.

 During the 2024 election, the Tasmanian Liberal Government made the commitment to “Develop with TasFarmers a fair and contemporary compensation framework for the NWTD that recognises the impact of hosting renewable transmission projects on landholders, including the development of a Strategic Benefit Payment Model”.

 We congratulated the government for this commitment, as it would if delivered provide a pathway for social licence.

 Landholders are however becoming frustrated that to deliver this commitment, the Government has only provided TasNetworks with a letter of expectation requiring that this occurs.

 In the case of the NWTD, it is also important to recognise that the majority of strategic “net consumer benefits” will be provided to mainland energy consumers.

 It is estimated only 20-30 per cent of the benefit will be retained for Tasmanians.

 Despite this, the entire cost of the near $1B NWTD and its associated Strategic Benefit Payments will be borne by Tasmanian consumers.

 We would argue that this does not pass any pub test, and that the Tasmanian Liberal Government must do more to pass on fairly the costs to those who will receive the benefits.

 Tasmanian consumers and the agricultural sector hosting renewable transmission assets cannot be expected to subsidise the transition to renewable energy for mainland consumers.

 Every day that this project is delayed, slows the state’s ability to increase its renewable energy generation, creating green jobs and lower power prices.

 The pub test is clear, and the time for action is now.