Self-determined development doesn't have to be as intensive as building, owning and operating an entire asset from scratch. Best, or better, practice is emerging as Traditional Owner groups get a chance to make the call on what they need and how involved they want to be in owning and developing an energy project.

"When we first started, hardly anyone knew what the options were," First Nations Clean Energy Network Co-Chair Karrina Nolan told The Energy.

"And sometimes the proponents would say look we’re not sure exactly of the tech or the size or the workforce required, or even necessarily the land footprint required, and they would go to communities with a not entirely baked idea and ask for genuine consent and engagement, and people would ask what exactly are we consenting to?

"I think that’s been a difficulty we’ve all had to navigate, both proponents and communities, because things change," Nolan said.

"When we’re trying to do the transition fast but with justice, what can be replicated is going to matter," she said.

"The more people are resourced, with good governance, the more people can make creative and innovative calls about what sorts of benefits they want to see in their community."

An Australian-first battery partnership

The $340 million Bulabul Battery project in Wellington, NSW, was designed from the start to support the wellbeing of the Wambal Bila (a Wiradjuri word for mountain river) people for generations to come.

A deal was struck for an option to take a 5 per cent stake in the Battery Energy Storage System (BESS). The underlying equity stake includes a right to a preferred, fixed annual return and a share of ongoing equity returns alongside other investors.

A set of agreements will see AMPYR Australia provide up to $300,000 to support Wambal Bila in setting up its initial operations. Wambal Bila and AMPYR Australia will also seek to agree a similar equity stake in the Wellington Stage 2 BESS.

"It is certainly an Australian-first and what we ultimately want to achieve is for others to copy that or, frankly, do even better," AMPYR Australia CEO Alex Wonhas told The Energy.

"We wanted to do something novel and unique with First Nations communities and the response within the team to doing something more than just building a battery, which is also important for the energy transition, was overwhelming," Wonhas said.

"And I have to be completely honest and should give credit to my colleague (AMPYR Australia Chair and former AEMO Services senior executive) Brad Hopkins, as it wasn’t my idea."

The commercial partnership with AMPYR Australia on Stage 1 could deliver $20 million to $30 million in revenue, managed by the Wambal Bila community, over the project’s 25-year life.

"Working closely with communities and getting their support for projects is absolutely vital for the energy transition and we see this as a great tool to achieve that," Wonhas said.

"And what we also found as we started to get into this was this actually helped us attract like-minded partners, because there are people out there in the investment community, in offtake, in the supplier space, who said wow, this is amazing, can we work with you? So it gained a lot of momentum."

He said it also added complexity during the financial close, but it gave them the resolve to push through and make it happen.

Idiosyncratic or scalable?

"We had community spirited leadership at the table … we also had to do it pretty quickly," Gavin Brown, one of the Directors of Wambal Bila Indigenous Community Corporation, said.

There was an existing governance structure, the Wellington Aboriginal Action Panel, which was a group that had been coming together for several years to talk about what they could do to help the community.

"That was a really important starting point, because it was very inclusive, so when AMPYR came along to talk about what this thing might be as a concept anyone could come along to those meetings and ask questions,” Brown explained.

"We were able to build rapport and trust quite quickly because of the way Brad, and Will Story, at AMPYR engaged. It was open and transparent – more transparent than we probably expected to be honest, from a community perspective, because you’re always hearing horror stories and so you’re a bit anxious about it."

The fact it was a battery project helped the community get their head around it quickly too.

"Yes, big numbers, but the premise of it is contained. It’s right there. People can see where it is," he said.

Batteries are a commercially viable investment, Wonhas said, and this made it possible to get others on board.

"We didn’t have to wait for a government subsidy, we could make it work right here right now between the representatives of Wambal Bila and AMPYR," he said.

The partnership plans to share the contracts and other documentation with others to replicate. Two law firms – Corrs and Ashurst - assisted in the design of the commercial structure.

Brown said their support was vital - Corrs from a community perspective and Ashurst from a proponent perspective - for working through novel, sometimes awkward, and complex aspects.

Releasing the IP created through that pro bono work will reduce the cost and barriers to similar deals elsewhere.

"We’re taking a nation-building lens … This is foundational and it is generational, rather than just a deal," he said.

Self-determined development

Nolan said it was important to build the capacity of Traditional Owner groups to be able to respond, which is what her network has been saying to the government.

The more people are resourced, working with The First Nations Clean Energy Strategy 2024-2030 and other mechanisms, with good governance, the more people can make really creative and innovative calls about what sorts of benefits they want to see, she said.

"At this point, we haven’t been able to replicate models very much – for a whole range of reasons," Nolan said.

"People need to be able to self-determine what the benefits are that fit their community and their needs – the Wellington example is great, to give people another option in a suite of options that we’re increasingly starting to socialise.

"But the benefit needs to be determined by that Traditional Owner group, partly on the resources they have in terms of governance but also what Country planning they may have done, what they may or may not want on their land borders.

"Also, some people are saying, well, actually we don’t want to be owners and operators of assets. We just want to have, like that project, an equity stake and get some revenue from it. It’s given people an option that might not be as intensive as actually setting up and owning and operating an entire asset from scratch."

Nolan said the Yindjibarndi project was another great example of a community with years of experience in Native Title and community governance.

"They’ve got great land tenure arrangements. They’ve secured a PPA (power purchase agreement). They’ve got great technical and commercial advisors. So, they’re going for it.

"But that might not be for everyone," she added.

Yindjibarndi Energy Corporation, working with ACEN Renewables, plans to develop, own and operate three large-scale renewable energy projects of up to 3GW in capacity in Western Australia’s Pilbara region. The first stage requires an investment of more than $1 billion to generate more than 750MW of solar, wind and battery storage.

Two of the corporation’s renewable energy projects were selected for the inaugural National Renewable Energy Priority List, which unlocks regulatory support and should fast-track approval processes:

• Chichester Range Corridor, a high-voltage transmission infrastructure linking the region to the North West Interconnected System (NWIS) via the Maitland Strategic Industrial Area near Karratha and the Dampier Port
• Baru-Marnda comprising 1GW of wind generation plus solar and an option to include a Battery Energy Storage System (BESS, with the final mix to be evaluated by feasibility studies.

"And if a developer wants a community to really engage with the project, they need to understand as much as possible and be brought in really early,” she said.

"What we’ve discovered, not just as the First Nations Clean Energy Network but also our work with Original Power, is that even if it’s a community-run project, like the ones we’re doing in the Northern Territory, you still have to go through all those same steps around community engagement, community buy-in, who are the decision makers, what’s in it for people. All that social licence work has to be done well, with the right people from the asset, no matter what the scale of the project – that’s really key."

Effective engagement from the beginning of a project was beneficial for international and local investors, according to research prepared for Treasurer Jim Chalmers’ productivity roundtable. It can also de-risk a project for Traditional Owners, who are very solid partners, she said.

Best, or better, practice

Under the Capacity Investment Scheme (CIS), new First Nations merit criteria were included in Tender 3 and 4 for engagement and commitments.

Energy Minister Chris Bowen promised this would allow engagement practices with Traditional Owners and First Nations communities, and the quality of design and funds for social and economic commitments, to be separately assessed.

For general guidance on applying “’better practice”, proponents were advised to refer to the minimum and leading practice examples outlined in the Clean Energy Council’s Leading Practice Principles: First Nations and Renewable Energy Projects.

A better sense of what’s involved should emerge when the tenders are awarded, Nolan said, but there was also a capacity gap for First Nations businesses, which need to be developed as part of a project’s procurement plans.

"PPAs are where the disadvantages of often inequitable legacy energy systems come to a head," according to Madie Sturgess, Clean Energy Senior Project Lead at Original Power.

"It's where the complexity of first mover risks materialise and is also an opportunity for forward thinking, for consumer-minded energy companies to renegotiate with First Nations proponents the terms by which power, accountability, agency, and benefit are realised in a modern and just energy system," Sturgess said.

Ruby Heard, an electrical engineer at Alinga Energy Consulting, and a steering group member of First Nations Clean Energy Network, said there was push back at times.

"It seems that governments and developers are failing in this space, in terms of getting clear information out there so that people can compare the impacts of wind, solar and BESS projects against the pollution and impacts from coal, gas and diesel projects," she said.

"So there’s more work to do. We also need to make sure projects are actually listening and bringing mutually agreed benefits to communities that they’re being installed in, for First Nations and regional people."

Speaking at last week's First Nations Energy Symposium, Bowen said all communities should be able to participate and share in the benefits of Australia’s renewable future

"It’s not news to people in this room that Remote First Nations communities often experience energy insecurity as they rely on harmful and expensive diesel generators," Bowen said.

He reiterated that expressions of interest were open for $70 million of support to get projects moving under the First Nations Clean Energy Program and announced the federal government would work with the South Australian Department of Energy and Mining to fund renewable energy microgrids in the communities of Yalata, Pipalyatjara and Oak Valley.

These new microgrids, funded through the Australian Renewable Energy Agency, will reduce the cost of electricity for First Nations communities under the Remote Area Energy Supply scheme. Bill payers in the host communities will share in the savings through a subsidised tariff of 10c/kWh during the lifetime of the microgrids.

This article by Marion Rae was first published in The Energy