Renewable Energy Czar Proposes National Standard for Farmer Insurance Concerns
A fresh strategy regarding public liability insurance has been introduced to alleviate the primary concern of farmers and landowners residing near proposed renewable energy initiatives. This initiative addresses the potential financial burden that may arise from accidents on their property affecting solar or wind infrastructure.
On Tuesday, Tony Mahar, the Australian Energy Infrastructure Commissioner (AEIC), unveiled the “hold harmless” approach, which has been in development for 12 months. This method was designed following extensive consultations with renewable energy developers, government entities, insurance firms, and agricultural groups.
Support From Key Organisations
This initiative includes a template for a developer deed poll and an insurance policy waiver, receiving formal endorsement from notable bodies such as the Clean Energy Council, the National Insurance Brokers Association, and the National Farmers Federation.
The underlying principle is that individuals living in proximity to renewable energy installations should not experience elevated public liability insurance costs or challenges in securing coverage due to these developments. Concerns surrounding potential costs have been prevalent—even though there has been no precedent for a renewable energy developer or operator seeking compensation from neighbours due to public liability claims.
Addressing Historical Concerns
An exception to this trend occurred in 2017 when neighbours took legal action against Infigen after a fire caused by a crow landing on power lines linked to the Woodlawn wind farm. Infigen, currently owned by Iberdrola, reached a settlement in 2018.
The Insurance Council of Australia has reiterated that the rising costs of insurance in rural areas are unrelated to the presence of renewable energy projects. They point to the escalating costs associated with natural disasters, the increased value of homes and vehicles, and inflation as major factors driving up premiums.
Mitigating Perceived Risks
Mahar acknowledges the increasing insurance costs while emphasising that the perception of risk must be addressed. “Premiums are indeed rising due to various factors, including the prevalence of extreme weather. Our aim is to alleviate some concerns for rural communities,” he shared with Renew Economy. “We intend to show that community worries are being acknowledged and dealt with in a cooperative and cohesive manner.”
“This is a new initiative for communities that have valid concerns, and we aim to address those directly,” Mahar added, highlighting the collaborative efforts of the industry, insurance bodies, agricultural stakeholders, and governmental organisations to facilitate a smoother energy transition for rural regions.
Collaboration with Industry Leaders
TagEnergy, a global developer engaged in the initiative, has been instrumental in formulating “hold harmless” measures for its Nearby Neighbour Programme at The Pines Wind Farm, a significant 2 gigawatt (GW) operation with a substantial battery installation in New South Wales’ Central Tablelands.
“A successful energy transition hinges on forging strong ties with the communities that host renewable projects, ensuring that local residents reap the benefits and are adequately safeguarded,” stated Andrew Riggs, TagEnergy’s managing partner in Australia. He noted that their practical experience helped shape the AEIC process and offered insights on the effective implementation of these protective measures.
Setting Standards for the Future
One outcome of the AEIC’s initiative includes the creation of a template developer deed poll alongside a draft clause for an insurance policy that waives the developer’s rights to seek damages from neighbouring landholders for accidental harm, unless the neighbour acted recklessly or with intent.
While the AEIC and its partners recognise that several regulatory and contractual avenues exist to provide the same protections—such as guidelines established by VicGrid—Mahar is eager to establish a unified national standard for the renewable sector. “Our goal is for this to become a national standard that accommodates local nuances but adheres to a cohesive industry framework,” he stated.
The AEIC aims to engage additional companies and industry associations to endorse the joint statement and support the movement towards establishing a national standard. They also plan to invite pertinent stakeholders to participate in an annual review, assessing the statement’s impact and any necessary amendments.
In conjunction with the joint statement, the AEIC will release draft definitions and supplementary information aimed at bolstering these commitments.
