VicGrid’s Social Value Guidelines become mandatory for renewable energy projects from mid-2027

The Guidelines apply broadly to all projects seeking access to Victoria's declared transmission system ^[1] under the new Victorian Access Regime under the NEVA. This will apply to all projects seeking connection, not just those within the declared Renewable Energy Zones ( REZs ). 

However, the type of approval required depends on the nature of the project:

• Projects within a declared renewable energy zone that meet the zone's designated technology type (such as wind, solar or both) must obtain a renewable energy zone authority.
• All other projects seeking access to the declared transmission system must obtain a grid impact authority. 

In both cases, applicants must prepare and submit a Consultation and Engagement Plan as part of the access application, providing direct evidence of how the project will meet the minimum expectations and contribute to the outcomes set out in the Guidelines. Applications will be assessed by VicGrid against a range of criteria, including social performance.

Transmission developers tendering to partner with VicGrid to deliver transmission projects as part of the declared shared network are also expected to consider the Guidelines alongside project-specific tender documents. 

Until the Victorian Access Regime takes effect (expected mid-2027), the existing open access arrangements under the National Electricity Rules will continue to apply. However, VicGrid has indicated it will nevertheless expect renewable energy project developers to follow the Guidelines in the interim.

Community engagement

At a minimum,  developers should engage with:

• communities surrounding the project, including the local government of the project area; 

• host landholders; 

• neighbouring and nearby landholders; and

• Traditional Owners.

The Guidelines also include dedicated sections on engaging with local government and with local industry. 

The Guidelines acknowledge that the geographical area of the relevant community will vary for every project depending on the project size, scale, location and impacts.

Developers are expected to engage early with communities, specifically prior to submission of planning permit applications or referrals under the Environment Effects Act 1978 (EES Act) or the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).

The expectations are built on best-practice community engagement principles including timely and transparent information, integration of feedback, provision of diverse and tailored communication methodologies, respectful communication and ensuring there are clear processes for enquiries and complaint management and dispute resolution. 

Engaging with neighbours and nearby landowners

The Guidelines establish detailed minimum expectations for developer engagement with ‘neighbouring and nearby’ landholders. These are defined as those directly adjoining the land hosting project infrastructure and those within ‘close proximity’, having regard to the project's size, scale, location and impacts.

Developers are expected to:

• provide timely and transparent information at the earliest opportunity about the project's impacts and risks, what can and cannot be influenced through negotiation, and the role of consultation;
• consult with neighbouring and nearby landholders on potential environmental, physical and operational impacts and risks, and seek to address concerns through project design and delivery, including ways to minimise, mitigate and manage them;
• consult with neighbouring landholders on addressing insurance matters and provide transparent information on any perceived or potential implications and risks;
• inform neighbours about planning scheme requirements, including setbacks, and discuss any implications and impacts; and
• consult with neighbours on how agreements regarding impacts and benefits will be managed, including how agreements are developed and, where appropriate, formalised. 

Key requirements for landholder agreements

For host landholder agreements specifically, the Guidelines require developers to negotiate transparently and ensure agreements address a number of prescribed matters. Developers are also expected to provide adequate support to landholders in the negotiation process, including provision of independent legal, financial, tax and insurance advice before entering into any agreements.

Key requirements include: 

• preventing contractual clauses from unreasonably restricting landholders from discussing details of the project with other community members;
• providing adequate support to landholders, including sufficient time to consider commercial agreements, and cover reasonable costs incurred by landholders in obtaining independent legal, financial, tax and insurance advice before entering into any agreement;
• ensuring preliminary agreements do not place long-term obligations on landholders beyond what was originally intended. For example, preliminary licence agreements should not commit landholders to host infrastructure or limit them from sharing information;
• ensuring agreements are clear and fair regarding renewals or extensions and include provisions allowing landholders to terminate for valid reasons once the agreed term has ended; and
• clarifying responsibility for paying increased costs or new costs associated with hosting the infrastructure, such as insurance premiums, rates, levies, land taxes or duties.
• specifying developer responsibilities and commitments on decommissioning, remediation and any other end-of-life arrangements, including negotiation of landholder protections and financial safeguards (including in circumstances where the developer or project owner becomes insolvent or is wound up before the end of project life). 

New public liability requirements

The Guidelines introduce a significant new expectation regarding public liability insurance, responding to landholder concerns raised during consultation on the Draft Guidelines, about increased liability risk when hosting or nearby to renewable energy infrastructure.

The overarching expectation is that developers must ensure host and neighbouring landholders do not face an increased liability position as a result of new renewable energy or transmission projects. 

To meet this expectation, developers are required to:

• limit their right of recovery against landholders. If an eligible landholder accidentally causes damage to the project, the developer is expected not to recover costs from the landholder beyond the landholder's public liability insurance limit. If a landholder does not have public liability insurance, the developer is expected not to pursue them for costs at all; 

• provide this commitment in writing. Developers are expected to inform all eligible landholders in writing about this commitment to limit recovery rights as early as reasonably possible before construction starts; 

• ensure their own insurers honour this commitment. The developer is expected to take all reasonable steps to ensure their insurance company agrees to the same limits of recovery rights, including by negotiating a waiver of subrogation in favour of eligible landholders; and

• note that a release need not be provided in respect of damage caused by gross negligence or wilful misconduct, nor to public companies, large proprietary companies, companies registered outside Australia, or subsidiaries of those company types. 

The public liability expectations will be reviewed within 24 months of the release of the Guidelines, or earlier in response to any significant changes in standard practices within the insurance industry.

Appendix B to the Guidelines provides detailed guidance, including an example deed poll of release that project developers may use to formalise the release. The release is expected to cover the construction, operational and decommissioning phases of the project. 

What is a ‘neighbouring landholder’?

Importantly, ‘neighbouring landholder’ is defined for the purposes of the public liability expectations as a landholder whose property:

• is within 3.5 km of the project boundary and located in a rural zone; or
• shares a title boundary with the host property (or is separated only by a road) and is in a residential, industrial, commercial or special purpose zone.

The Guidelines include a section specifically on engagement with Traditional Owners, noting that the Traditional Owner Corporations often have established their own engagement and decision-making processes that need to be respected and complied with. 

The Guidelines also acknowledge that there may be more than one entity, including Registered Aboriginal Parties under the Aboriginal Heritage Act 2006 (Vic)as well as prescribed body corporates and Traditional Owner Group Entities in relation to Native Title and Settlement Rights. 

In addition to the same minimum expectations for transparent and respectful communication and engagement with the broader community, developers are expected to: 

• prioritise working in genuine partnership with the Traditional Owner Corporations to support self-determined engagement and agreement-making, ensuring decisions that affect their rights, interests and connection to Country and Sea Country are led by Traditional Owners;
• research and understand the rights, interests and aspirations and protocols of applicable Traditional Owner Corporations;
• undertake cultural safety and competency training relevant to the Traditional Owners on whose land the project is intended to be developed; and
• undertake engagement and knowledge-sharing with Traditional Owners in alignment with principles of data sovereignty.

The Guidelines also reflect VicGrid’s obligations under the NEVA to establish a Renewable Energy Zone Community Energy Fund and a Traditional Owners Fund. 

Minimum expectations in the provision of economic benefits include that developers should:

• design social value and economic benefits that consider the needs, project impacts, priorities and strategies identified by local communities, government, community foundations, industry and research; and

• collaborate with other developers, local industry, community and government to achieve collective impact, including coordinating on resourcing, initiatives, information-sharing and engagement, and leveraging project opportunities, economies of scale and shared networks. 

The Guidelines explain that social value and economic benefit initiatives should be delivered to align to key phases of the project, such as planning, development, construction and operation noting that, in some cases upfront investment in a significant initiative may align with community priorities, while in other cases an annual investment may be preferred.