Skip navigation

Federal government makes ‘soft start’ on First Nations merit requirements in Capacity Investment Scheme

Specific merit criteria ensuring energy proponents include meaningful and quality engagement and benefit sharing with First Nations will be introduced into the Federal government’s new Capacity Investment Scheme tender process, a government representative told the First Nations Clean Energy Symposium in Adelaide today. 

The Capacity Investment Scheme (CIS) is a $70 billion investment in renewable energy generation and capacity over four years to meet the Federal government’s 2030 renewable energy targets, and sits under the National Energy Transformation Partnership.

Today, Simon Duggan, Deputy Secretary of the departmental team advising Federal Minister for Climate Change and Energy Chris Bowen said he would preference tenders coming through with positive First Nations involvement.

He revealed the CIS merit conditions being set for investors and project proponents will assess projects against two criteria:

  1. The quality and productivity of engagement with First Nations.
  2. Whether projects can provide First Nations with the opportunity to increase social and economic benefits such as ownership, revenue sharing, partnering, employment, and funding for sub-contracting of First Nations businesses.

He told the 350-strong audience at the Symposium the market brief will be released later this week including information on how to assess projects, with further options to be launched mid-year and then every 6 months, with criteria to be continuously reviewed and revised over the four years of the Scheme.

Chris Croker, co-Chair of the First Nations Clean Energy Network says the government’s tentative steps into merit criteria for First Nations is a soft start. 

“The CIS provides an opportunity for the Australian Government to set benchmarks for benefit sharing, economic participation, and equity ownership for First Nations communities by mandating the need for a significant percentage of First Nations equity participation and benefit sharing.

“Embedding First Nations outcomes into the design of the CIS de-risks projects and adds commercial value through the auction process by ensuring proponents properly engage with First Nations communities.

If done properly, the right targeted and eligibility merit criteria can deliver mutually beneficial outcomes for both First Nations communities and proponents by reducing risk and increasing shareholder value gained through First Nations partnerships and ownership of projects.”

Recent international research provides evidence that community support, which can be demonstrated through ownership, of renewable energy projects is an important driver of long-term success as it reduces the risk of project abandonment, lowers investment risk, and produces three times higher economic benefits.

There are also examples globally of governments setting benchmarks for benefit sharing, economic participation and equity ownership of projects, including South Africa, and the provinces of Ontario and British Columbia and Canada, showing much greater ambition than Australia.

In the most recent example, Canada BC Hydro’s Call To Power includes the minimum Indigenous equity requirement of at least 25%.

“We look forward to similar rates to Canada of minimum equity ownership percentage targets being included in CIS tenders this year, in addition to revenue sharing, employment and training and skills development outcomes, additional procurement opportunities, key decision-making roles, and engagement and impact mitigation including for cultural heritage and environment.”