The First Nations Clean Energy Network has released a new guide designed to support First Nations communities review their participation in clean energy projects.
The guide First Nations Co-ownership and Equity Participation in Clean Energy Projects provides an overview of equity and what equity participation involves, and looks at the potential risks and benefits for First Nations groups seeking to hold equity in projects.
It also unpacks different forms of equity participation for First Nations considering co-investing in clean energy projects with developers.
Modelling by Net Zero Australia estimates 43 per cent of all clean energy infrastructure required to get Australia to net zero emissions by 2060 will be sited in areas where Indigenous groups and communities have legally-recognised rights, interests and aspirations. These Traditional Owners are rights-holders, represent an integral stakeholder, and have the potential to play a significant role in clean energy projects.
First Nations Clean Energy Network co-chair Karrina Nolan says the clean energy transition represents a different opportunity for ownership of energy resources.
"There is great potential for projects to be done differently," she said on Tuesday as the guide was launched.
Internationally, First Nations are significant asset owners of clean energy infrastructure backed by substantial government funding and policy initiatives. For example, Indigenous communities are the second-largest asset owners of clean energy infrastructure in Canada with thousands of small to large scale projects underway and ongoing. These projects have led to community training and job creation, reduction in greenhouse gas emissions, materially improved economic stability, cultural revitalisation and much more.
Domestically, with Australia's First Nations Clean Energy Strategy 2024-2030 there's increasingly a national focus on creating opportunities for equity participation by First Nations communities in the energy transition.
Through the Capacity Investment Scheme, a $70 billion revenue underwriting scheme encouraging new investment in wind, solar and battery storage, the efderal government is planning to include a 'First Nations set aside' tender in 2026 introducing a minimum megawatt allocation for projects that have put in place First Nations equity and/or revenue sharing agreements.
To-date, nearly 60 projects have been awarded under the Capacity Investment Scheme which includes First Nations 'merit criteria' ensuring First Nations community engagement and benefits-sharing towards, in many cases, genuine social and economic opportunities and partnerships.
The Network said it is tracking proponents' engagement, benefit sharing and equity commitments in Capacity Investment Scheme projects awarded, with four projects negotiating equity with First Nations groups impacted to-date.
The Network is also tracking First Nations-led and participation in clean energy development in Australia. There are now 30 and counting First Nations clean energy partnerships with First Nations involvement, ownership and equity, some that are community-led, and most yet to be operational.
"Compared to the huge number of clean energy projects being planned and developed across the country, there is obviously more work to be done to ensure First Nations participation and co-ownership," Ms Nolan said.
"We know that early, meaningful First Nations consent and engagement helps de-risk projects, improves investor certainty, and strengthens social licence."
The Network recently released a significant report done with EY, Investor Benefits of First Nations Participation in Clean Energy Projects, clearly showing that First Nations ownership strengthens investor confidence and project performance - and reduces risk, cost and delay; leading to commercially better projects. The report findings highlight significant investor benefits including increased fast-tracking of projects, access to pools of capital, offtaker preferencing and secondary market premium valuation, and a decrease in a project's risk profile and the time taken to progress projects through the development cycle.
For Indigenous communities, significant benefits include engagement and enabling of free, prior and informed consent (FPIC), co-design and faster access to land and sea country, recognition of rights and interests and value add, the local workforce and First Nations-businesses prioritised, and socially responsible and sustainable projects providing a demonstrable benefit for generations to come.
"To assist investors and developers to move beyond compliance and realise this mutual benefit, we also recently launched our Building Capacity of Proponents toolkit," Ms Nolan said.
"It's a resource for First Nations engagement, assisting proponents with who to talk to in early and meaningful engagement and across the clean energy project lifecycle.
"It aims to equip proponents, investors and governments with clear, practical guidance to engage First Nations from the outset on equal terms, where engagement is a foundational business and risk-management strategy.
"Early engagement leads to trusting relationships, benefit-sharing and equity, strong agreements and partnerships, and sustainability on Country."
Ms Nolan said that while there is an urgency to scale up clean energy, it must be ensured the energy transition is done the right way; "with pace and with justice, ensuring no one is left behind".
"Equity participation in clean energy is a means to proactively exercise First Nations rights and interests in Australia's lands and waters, ensure control and a seat at the table, and share the economic benefits derived from a project for the benefit of communities for generations to come," she said.
The new guide First Nations Co-ownership and Equity Participation in Clean Energy Projects for First Nations people and groups aims to further build communities' knowledge of equity and co-ownership models, from joint ventures to unit trusts.
"It's a resource to strengthen further our confidence to negotiate strong co-ownership agreements with proponents and governments," Ms Nolan said.
