A review of Federal and State government approaches to transmission reveals inconsistency and a lack of accountability for ensuring commitments to First Nations outcomes.

A review of Federal and State government approaches to transmission reveals inconsistency and a lack of accountability for ensuring commitments to First Nations outcomes. Despite all government’s stated ambition for First Nations participation in Australia’s energy transition, there is presently a lack of commitment to embedding First Nations outcomes in transmission planning prior to decision-making.

With grateful thanks for use of the photo by Nikola Johnny Mirkovic.

Executive Summary

All Australian governments, Federal and State and Territory, have put in place strategies, policies and legislation to facilitate the transition to a renewable future and to support the development of new energy infrastructure.¹

New transmission infrastructure is essential in this transition, and there are significant opportunities for First Nations to benefit from and participate in Australiaʼs new priority transmission infrastructure investments should it be done in accordance with international law, and avoid the hard lessons of recent natural resource² and mining negotiations with government, and industry.³

Certainty, community acceptance and social licence are essential to delivering the transmission infrastructure required to support a rapid renewable energy transition.

First Nations people have extensive rights and interests, including Traditional Ownership rights, and hold the cultural knowledge required to ensure the necessary infrastructure is appropriately sited, and that its construction and operation deliver multiple and mutual benefits for communities. With First Nations as genuine partners in projects, these benefits will also flow through to investors. First Nations people also enjoy inherent rights and have mutual obligations to their lands, and waters.

Australia can learn from other nations who have acted on the climate challenge before us, to ensure that the transition to a renewable energy future is just, de-risked and that all parties' interests are aligned early to support investment and timely construction of critical transmission infrastructure.

Key outcomes from Europe, United States and Canada transmission and renewable energy transitions are that co-ownership (equity) and strategic participation (free, prior and informed consent) underpin successful transmission infrastructure.⁴

Australia can build the transmission infrastructure we all need in the right way, to support our future economy, and climate, while ensuring that this transition creates shared economic prosperity. It will require consistency and benchmarking to ensure that the benefits are equitable for First Nations people.

Recommendations

Thanks to Kathryn Ridge (PhD candidate, University of Technology Sydney, Centre for Aboriginal Economic Policy Research) for leading the drafting of this working paper, and to others who have provided comments and suggestions in its development.

Contents

• Executive Summary
• Recommendations
• Introduction
• Transmission and the intersection with First Nations
• Australiaʼs transmission network
• Government transmission initiatives
• Building the transmission capacity required with First Nations
• Regardless of tenure, First Nations rights, interests and responsibilities in land cannot be ignored
• Transmission infrastructure on Native Title and statutory Land Rights land - the need for clarity
• Native Title - the right to negotiate should apply regardless of whether a project is public or private
• Land Rights schemes
• Underwater Cultural Heritage
• Conclusion and recommendations
• Appendix A: Australiaʼs energy market explained
• Appendix B: Review of Australian government transmission approaches and First Nations outcomes
• Appendix C: Transmission infrastructure arrangements involving First Nations in North America

Introduction

This paper seeks to understand and develop additional thought about the opportunities available to First Nations people in Australiaʼs new transmission infrastructure - ownership, planning, design, build - to ensure the impact of policy instruments on those affected are recognised and optimised for First Nations benefit.

To do this, we have examined:

• Energy system governance: the policies, frameworks, and institutions that govern the energy system and how they support and uphold fundamental human rights.
• Respect for First Nations rights: Defining what they are, and the ways in which energy system participants understand and implement their roles with regard to First Nations rights and interests.
• Other jurisdictions that have been early movers in the transition to a rapid and just renewable energy future.

In developing this paper we are aware that the federated nature of the National Electricity Market (NEM) means that even reforms with broad support can take time to progress and implement.

By including and embedding First Nations as co-owners in systems required to give effect to the transition, and the right to free, prior and informed consent (FPIC) in policy, legislation and projects, and by requiring special measures⁵, the transition to renewable energy can be fair and just, occur at the pace necessary (avoid lengthy disputes), and will deliver mutual cultural, social, economic and environmental benefits to people, and the country.

Transmission and the intersection with First Nations

There has been considerable focus on generation in Australiaʼs energy transition from fossil fuels to renewable energy.

Another key feature of our clean energy future is the design, construction, and operation of new transmission infrastructure. As has become a common utterance as Australia transitions its energy system away from coal and gas: “there is no transition without transmission.”

Australia is in the midst of an energy revolution. The Australian Energy Market Operator (AEMO) reports that we need to build over 10,000 kilometres of new electricity transmission before 2030 - an expansion of our power system at a scale not seen for decades.⁶

The lack of progress in building the required transmission capacity to expand our energy system and decarbonise is emerging as a strategic challenge for Australia.

To meet this challenge, governments urgently need to:

• Provide certainty for investment by ensuring strategic planning is done with First Nations people, obtaining their FPIC;
• obtain social licence by meaningfully engaging, communicating and planning with impacted communities, understanding their local socio-economies and environment and community priorities; and
• ensuring that the rules for the development of transmission infrastructure incentivise First Nation outcomes, including genuine partnerships.

The rights, interests and responsibilities of First Nations people⁷ will play a critical role in facilitating the success of Australia to meet emissions reductions targets, including the construction of necessary new transmission infrastructure.

Governments have a choice about increasing equitable outcomes for First Nations

Although the regulation of Australiaʼs energy system is complex with many interrelated aspects⁸, the reform of the regulatory framework that underpins our energy system is a key aspect of Australiaʼs energy transition to clean energy.

As this system is examined and adapted to facilitate the energy transition, governments have choices available to them, and a strong guiding hand in how these choices are exercised.

Providing incentives for First Nation outcomes will accelerate the clean energy transition by providing certainty, in turn reducing risk and cost.

Australia’s transmission network

Transmission infrastructure moves electricity from where itʼs generated, such as from a solar or wind installation, to an electrical substation. From there, the distribution network – the “poles and wires” – takes the electricity to households and businesses.

Australiaʼs ageing transmission network largely consists of high-voltage towers and cables (both above and below ground) which criss-cross the country and are connected to transformers⁹. Grid infrastructure is largely concentrated on Australiaʼs east coast, interconnecting Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania. Western Australia and the Northern Territory have their own grid infrastructure, although these are not connected across the country.

Figure 1: Australia’s Transmission Networks

Source: ARENA

New transmission infrastructure is necessary for connecting new renewable energy resources and zones to the electricity grid. Upgrades to existing interconnectors between the States and Territories are required, and new interconnectors and intrastate transmission must be built if we are to transition to renewable energy sources, making the grid cleaner and more resilient.

Government transmission initiatives

The Federal governmentʼs $20 billion program, Rewiring the Nation¹⁰ is designed to make clean energy accessible and affordable across Australia by modernising the electricity grid and infrastructure (i.e. to build new transmission infrastructure).

Substantial funding has already been committed to various transmission projects under this program:

• $4.7 billion to New South Wales
• $2.25 billion to Victoria
• $3 billion to Western Australia

When it comes to First Nations outcomes of these major funding commitments, only the Western Australian announcement includes any reference to First Nations, with media releases¹¹ stating that “the Australian and WA Governments will work closely with First Nations Australians to understand their views on this investment and support their participation in the stateʼs clean energy transformation.”¹²

Aside from this statement about First Nations and Western Australia, none of the other Rewiring the Nation funding announcements listed above include any commitment, or legislative or policy framework, as to how First Nations outcomes are embedded in these significant investments of public money.¹³

Our review of State government transmission approaches and First Nations outcomes reveals both inconsistency, and a lack of accountability for ensuring that commitments to First Nations outcomes, such as participation, co-design and co-ownership occur prior to decision making.¹⁴

Governments have a key role in ensuring consistency of rules to facilitate equitable outcomes for First Nations people. Being in charge of the rules and regulation of the energy system, and a major contributor to the funding, means that First Nations-related outcomes can be achieved both in the ways that projects are funded (through concessional finance such as is available through the Clean Energy Finance Corporationʼs (CEFC) administration of the Rewiring the Nation fund),¹⁵ and through linking social and economic outcomes for First Nations throughout those rules determining how the planning, investment, construction and operation of transmission (monopoly) assets occurs.

Extending benefit sharing to First Nations people and communities via transmission infrastructure planning, investment and execution will ensure that First Nations people are both participating in and benefiting from Australiaʼs energy transition, whilst also ensuring that projects are more likely to be developed at the pace required with risk minimised.

Building the transmission capacity required with First Nations

Discussions about First Nations involvement in new transmission infrastructure in Australia must move urgently beyond check-box-type consultation to rights-based conversations about genuine partnership and participation in all stages of the necessary transmission infrastructure build-out, including benefit sharing, partnerships, equity and ownership.

Given the CEFC’s Investment Mandate provides the CEFC with direction on how it will invest budget allocations of $20.5 billion for Rewiring the Nation, the Household Energy Upgrades Fund and the Powering Australia Technology Fund, this is a significant deficiency in the ability of the CEFC to positively contribute to First Nations outcomes.

To facilitate these outcomes, the First Nations Clean Energy Network has developed a set of Best Practice Principles for clean energy developers, proponents, governments and communities.¹⁶

The Principles place First Nations people and their communities at the centre of the development, design, implementation and benefit-sharing of small, and medium to large-scale clean energy infrastructure developments. The Principles provide a framework for governments, project proponents and regulators to consider how to engage with First Nations communities in the development of new transmission infrastructure.

Building on the Principles, following are key opportunities for governments and the entities that construct, operate and maintain the transmission network - the transmission network service providers (TNSPs) - to explore in the development of our nationʼs new transmission infrastructure backbone.

Regardless of tenure, First Nations rights, interests and responsibilities in land cannot be ignored

First Nations Land Rights and Native Title rights and interests are typically only able to be realised legally over land where the State has not undertaken a prior tenure act (such as a grant of freehold, lease) which thereby ʻalienatesʼ the land from First Nation peopleʼs ownership. If such a previous tenure act has occurred, it means those lands are not ʻclaimableʼ by First Nations groups. This in turn means that First Nations people are not able to enjoy potential or actual wealth creation from those lands, despite being Australia's first inhabitants, due to those previous acts of dispossession by the State.

This distribution of land from First Nations people to settlers has resulted in an ongoing financial and economic disadvantage that has denied First Nations Australians their fair share of intergenerational wealth.

The construction of new transmission infrastructure accordingly presents an opportunity to correct past dispossession and to facilitate First Nationsʼ self-determination and participation in clean energy infrastructure.

Such First Nations outcomes could be realised, regardless of tenure arrangements by facilitating equity ownership of transmission infrastructure by Traditional Owner groups and their representative organisations by actions such as:

• establishing rules for the planning, construction and operation of transmission infrastructure projects that incentivise TNSPs to establish benefit-sharing arrangements with Traditional Owner groups and their representative organisations
• incentivising TNSPs to partner with Traditional Owners and their representative organisations in order to access concessional government finance (e.g. Rewiring the Nation program funding)
• a top-up to the Indigenous Land and Sea Corporationʼs Land Account, to enable Traditional Owner groups whose land is now covered by transmission infrastructure (but who are not able to access the substantial compensation payments made to current landowners) to acquire and manage adjacent land, where possible.

Exploring innovative measures like those listed above is no different to the special measures that have already been announced and which are directed towards landowners, such as:

• NSWʼs Strategic Benefit Payments Scheme¹⁷
• Victoriaʼs Landholder Payments scheme¹⁸
• Queenslandʼs Supergrid Landholder Payment Framework¹⁹ (which also includes payments to properties adjacent to new transmission infrastructure).

These schemes, which are paid in addition to compensation payments for acquisition of easements to host transmission infrastructure, are payments overwhelmingly directed towards non-First Nations landholders, on areas of land dispossessed from Traditional Owners.

First Nations are excluded from these payments despite retaining spiritual affiliation and ongoing rights and responsibilities to manage lands and water, notwithstanding past dispossession.

In other jurisdictions, including Canada²⁰, the interaction between this past dispossession and the need to provide specific pathways has been understood to ensure more equitable outcomes are achieved for First Nations people in the clean energy transition. The Canadian experience focuses on the meaningfulness of co-ownership of infrastructure, requiring both a sustainable revenue share and participation in decision making²¹, as well as underpinning environmental, social and governance (ESG) outcomes and de-risking projects for the co-ownership partners.

Also in Canada, where the demonstrated benefit of co-ownership to community and projects is well proven, state jurisdictions have fast-tracked equity shares for Indigenous people through legislative and innovative pricing and policy measures such as mandated equity shares, feed-in-tariffs and other incentive arrangements.²²

As a result, it is not uncommon for First Nations to own significant equity shares in transmission infrastructure in Canada.²³

Transmission infrastructure on Native Title and statutory Land Rights land - the need for clarity

In Australia, some First Nations groups are able to claim title to their lands under Native Title or via Land Rights and will be in a similar position to other landowners in being able to negotiate specific benefits associated with transmission infrastructure set for their land.

These groups have a key role in being able to provide the certainty (consent) TNSPs require from local communities. Transmission infrastructure should only be constructed where the FPIC of Traditional Owners has been obtained.²⁴

As the First Nations Clean Energy Network has advocated, FPIC is a foundational, mandatory principle that must exist in all policy and legislative frameworks concerning First Nations and access to lands and waters.

Current legal frameworks in Australia for Native Title and statutory Land Rights do not meet the international benchmarks for FPIC and nor do they provide opportunities for First Nations to fully participate in the economy as owners of assets.

In other natural resource sectors, such as mining, the United Nations Human Rights Committee have concerningly found that Australiaʼs legislative processes have failed to meet international human rights benchmarks for effective participation in decision making.²⁵

Native Title - the right to negotiate should apply regardless of whether a project is public or private

Depending on whether proposed transmission lines are public or private, either section 24KA of the Native Title Act 1993 (Cth) (general public) or section 24 MD of the Native Title Act 1993 (Cth)(private) will apply.

If the transmission line is private (an asset that provides a company a benefit) or the area of land for the transmission line is to be compulsorily acquired, section 24MD of the Native Title Act 1993, and ʻSubdivision P - Right to Negotiateʼ applies.

If the transmission line is public, then the native title holder is given the same procedural rights as an agricultural leaseholder, or freehold owner, and is able to have native title rights considered, if the procedural rights allow for matters to be considered.

In either pathway, compensation is payable, and if compulsory acquisition occurs, any non-native title interests in the land must be acquired as well.

To provide greater certainty to all stakeholders, the Native Title Act 1993 (Cth) should be amended to clarify that the right to negotiate provisions of the Act will apply regardless of whether the transmission project is public or private, as transmission is a monopoly asset.

Land Rights schemes

There are a number of State and Territory Aboriginal Land Rights Acts²⁶, each with different provisions regarding the ability of First Nations groups to acquire or affect granted lands.

In most States and Territories, First Nations lands are typically inalienable²⁷, meaning they cannot be sold, leased or mortgaged.

In NSW, for example, if land has been granted under the Aboriginal Land Rights Act 1983 (NSW), the land cannot be compulsorily acquired, except by an Act of Parliament.²⁸ It can however be sold, leased or mortgaged with NSW Aboriginal Land Council approval.

These restrictions, along with the inordinate delay in processing land claims and native title claims, make it difficult for First Nations to participate fully in the economy as owners of assets, and thus from having access to capital.

These factors place First Nations at a significant competitive disadvantage when it comes to opportunities to raise capital to participate in equity positions and other commercial opportunities with transmission infrastructure (because of difficulty in accessing loans and competitive capital offered by the markets because land cannot be used as loan/investment collateral).

Equitable participation of all First Nations people in the energy economy must be supported, for example through a hypothecated section of the Community Benefits Sharing schemes, similar to British Columbiaʼs First Nations Clean Energy Business Fund.²⁹

Underwater Cultural Heritage

New transmission infrastructure required to connect energy generated from offshore wind to the existing grid poses risks to First Nations underwater cultural heritage.

Large areas of Australiaʼs continental shelf were dry landscape for tens of thousands of years of First Nations occupation. Many First Nations communities have both tangible and intangible cultural heritage extending into Sea Country well beyond the coastline. Resourcing is required for these communities to conduct heritage surveys and marine spatial planning.

Furthermore, the Underwater Cultural Heritage Act 2018 (Cth), which fails to protect First Nations cultural heritage, requires wholesale reform to include provisions for defining, identifying, and protecting First Nations underwater cultural heritage in line with international standards.

Conclusion and recommendations

As has been widely reported³⁰, in order to decarbonise our energy system by 2050 Australia will need to build more than 10,000 kilometres of new high-voltage transmission lines to carry clean energy from newly established renewable energy zones and new projects. This will obviously require access to significant areas of land.

To assist with the challenging social licence aspects of new transmission infrastructure, governments in Victoria³¹, NSW³² and Queensland³³ have begun to offer additional financial incentives for the impact of transmission infrastructure.

Notwithstanding the potentially significant impacts on Country, for many First Nations, however, there may be limited opportunity³⁴ to shape and influence, benefit from and manage the risks associated with transmission infrastructure.

Further, from a justice perspective, that additional payments are now being offered to current landholders for transmission infrastructure with no recognition of past dispossession provides a different perspective on the emerging compensatory schemes.

In developing this paper, we are looking to explore how these emerging risks and opportunities can be better managed, and whether there are policy, program and funding initiatives and changes that should be prioritised.

In that regard, we have developed a series of draft recommendations that will guide our approach to reforms.

Appendix A: Australia’s energy market explained

The National Electricity Market

The largest electricity grid in Australia is part of the National Electricity Market (NEM), and covers Queensland, New South Wales, Victoria, South Australia and Tasmania.

The NEM has five state-based transmission networks linked by interconnectors that enable electricity to flow between states, including the distribution network (poles and wires). Western Australia has the worldʼs biggest

standalone electricity grid and the Northern Territory is also separate from the NEM.

The Australian Energy Market Operator (AEMO) operates the NEM and is responsible for selecting the lowest cost electricity generation to run through the transmission networks, and also for national transmission planning.

Several states in Australia have either partly or fully privatised transmission networks. In Victoria, AEMO decides on transmission investments. In other jurisdictions, that role rests with transmission companies.

AEMOʼs Integrated System Plan³⁵, a 20+ year roadmap for developing the NEM, shows that Australia will need to develop

10,000km of new transmission infrastructure by 2050³⁶ to move energy from new renewable projects around the NEM, locally and interstate.

Transmission infrastructure in Australia

The entities that construct, operate and maintain the transmission network are called transmission network service providers (TNSPs).

In Australia, TNSPs are state-based and comprise a mixture of publicly and privately owned businesses:³⁷

TNSPs in each state were originally established as statutory authorities under state legislation. Although some TNSPs have now been privatised, all are still governed by specific state legislation. TNSPs must comply with the legislation applicable to their jurisdiction and any other related regulations, codes of practice or guidelines.

The Australian Energy Regulator (AER) is responsible for the regulation of TNSPs.

Transmission companies are monopoly providers and in Australia their activities are heavily regulated

- the strong role of governments in making the rules

TNSPs fund and build capital assets, and earn income from these assets over their lifetime, in a similar way to owners of other long-lived assets such as toll roads. Equity shareholders in transmission infrastructure require adequate returns to incentivise them to invest.

Energy networks create “natural monopolies” because there are such high barriers to entry and start-up costs that prevent any rivals from competing. Accordingly, and particularly to protect consumers from network owners from exploiting monopoly power, natural monopolies are often heavily regulated, with governments having a strong hand in regulating (setting and applying the rules) transmission infrastructure.

This is done by the Australian Energy Market Commission (AEMC) which develops the rules by which the market must operate. The National Electricity Rules (NER) set out the regulatory framework for electricity networks. The Australian Energy Regulator (AER) enforces the rules and makes judgements on the regulatory proposals of monopoly network operators.³⁸

How the rules work to determine what TNSPs can charge consumers

The revenue most energy networks are allowed to earn (and therefore the prices they charge to consumers) is governed by the AER and is set every five years. Western Australia has a similar structure regulated by its Economic Regulation authority.

The NEMʼs regulator (the AER) must set a ceiling on the revenues or prices that a TNSP can earn or charge during a regulatory period. In particular, the AER determines the efficient costs of providing electricity network services.

This is known as incentive-based regulation, because once the regulated revenue is set for a period, TNSPs have an incentive to provide services at the lowest possible cost because their returns are determined by the actual cost of providing services. If a TNSP reduces its actual costs to below the regulatory estimate of efficient costs, the TNSP retains a share of the savings in future regulatory periods.

Put simply, this means the Commonwealth government, through the AER, effectively sets the price for transmission via its regulatory structure, and consumers pay for returns to equity shareholders through their electricity bills (transmission and distribution costs comprise about 50% of consumersʼ costs).

Appendix B: Review of Australian government transmission approaches and First Nations outcomes

As the energy transition challenge is nationwide, it is shared between Commonwealth and State governments. The Commonwealth has developed a strategy - the national Integrated System Plan (ISP) through AEMO, which flags the need for over 10,000 km of new transmission.

Each State Government has prepared its own energy strategy, including through supporting legislation, and their own approach to the participation of First Nations in the design, planning, building, owning, and operating of the new transmission infrastructure.

In Table 1, for the purpose of understanding the impact on First Nations participation, we examine a range of legislative and policy documents against the following key criteria:

1. Strategic Land Use Assessment including resourcing for First Nations peopleʼs effective participation in design and planning of transmission (REZ and Transmission)
2. Ownership of transmission for First Nations people
3. Human Rights protected through transmission decision-making
4. Free Prior and Informed Consent to proposed areas, and specific routes
5. Cultural Heritage appropriately identified and protected
6. Benefit Sharing required and incentivised.

Our analysis reveals significant deficiencies in state policy and legislative frameworks

As can be seen through the analysis of each Stateʼs scheme (in Table 1), while the principles have been identified, each leaves a substantial amount of the work regarding First Nations participation in the design, planning, building, owning and operating of transmission to a later phase, or to policy rather than legislation - missing out on significant opportunities for First Nations outcomes.

Meanwhile, long term transmission infrastructure decisions are being fast-tracked, as are renewable energy developments based on the transmission network design which will dictate infrastructure locational requirements.

Further, notwithstanding good intentions, implementation failure of policy is a real concern. Mining, agricultural, conservation and water planning sectors have all been reformed repeatedly over the past 50 years and each time, the government policy documents all note good intentions and commitments to First Nations people. Even so, the outcomes for First Nations typically fail to be delivered.³⁹ This implementation failure must not occur with the renewable energy transition.

Table 1: Comparison of jurisdictional legislation and policy concerning new transmission infrastructure

Appendix C: Transmission infrastructure arrangements involving First Nations in North America 

End Notes

¹ See further Appendix A.

² E.g. water, fisheries, biodiversity.

³ See further Appendix B - analysis of state energy regimes against First Nations outcomes.

⁴ See further Appendix C - examples of First Nations co-ownership of transmission infrastructure.

⁵ Australian Human Rights Commission, Special Measures.

⁶ AEMO, 2022 Integrated System Plan, June 2022.

⁷ First Nations people are the Aboriginal and Torres Strait Islander people with a spiritual relationship with particular lands, referred to as Country. In this discussion paper, the phrase is used both generally (all First Nations people), and specifically in the context of speaking for culture and heritage of particular places.

When used specifically, only the First Nations people with a direct spiritual affiliation for Country are intended to be involved.

⁸ See Appendix A.

⁹ Transformers are an electrical device that changes a given input voltage (such as High Voltage) to a different output voltage suitable for commercial and domestic users.

¹⁰ Australian Government, Rewiring the Nation.

¹¹ Prime Minister of Australia, $3 billion Rewiring The Nation deal to power WA jobs and growth, 29 August 2023.

¹² See Appendix B for a review of State government transmission approaches and First Nations outcomes.

¹³ See footnote 13.

¹⁴ Ibid.

¹⁵ We also note that while the CEFC has a First Nations Investment screening approach, there is no positive requirement or direction in the CEFC’s Investment Mandate to consider First Nations outcomes, or in its governing legislation (unlike the National Reconstruction Fund Corporation Act 2023 (Cth) – see ss 17(4)(b), s 75(1)(aa) and s 75(1)(da) – and unlike the Northern Australia Infrastructure Facility Investment Mandate).

¹⁶ First Nations Clean Energy Network, Aboriginal and Torres Strait Islander Best Practice Principles for Clean Energy Projects, November 2022.

¹⁷ NSW Government, Strategic Benefit Payments Scheme.

¹⁸ Victoria Government Press Release, Landholder payments for a fairer renewables transition, 24 February 2023.

¹⁹ Powerlink Queensland, SuperGrid Landholder Payment Framework, May 2023.

²⁰ Ontario and British Columbia, legislated targets for Indigenous equity 20–51% First Nations Clean Energy Business Fund, Clean Energy Act 2010 British Columbia and Ontario Feed in Tariff Aboriginal Participation Rules and Large Renewables Long term Procurement.

²¹ Warrier, V., Morrison, L., White, A., Buffalo, S. (2021), Indigenous Ownership of Natural Resource Projects: A Framework for Partnership and Economic Development, Alberta Law Review Volume 59 (2), pp 393 – 425, p 398.

²² Clean Energy Act 2010, First Nations Clean Energy Fund (British Columbia) and Ontario Feed in Tariff and Aboriginal Price Adder, cited in Hoika, Savic, Campney (2021) “Reconciliation through renewable energy”, Energy Research and Social Science, Volume 74 (2021) 101897, pp 1-15, at 3.

²³ See for example the Wataynikaneyap Power Transmission Project which is ʻbringing grid connection to 17 remote communities. This has numerous benefits to all 24 partner communities leading this project, in partnership with Fortis Inc. and other private investors.ʼ

See also Appendix C, which sets out a range of transmission infrastructure arrangements involving First Nations in North America.

²⁴ Tipakalippa v National Offshore Petroleum Safety and Environmental Management Authority (No 2) [2022] FCA 1121, Wunna Nyiyaparli Indigenous People (Ailsa Roy) decision of the United Nations Human Rights Committee dated 15 March 2023 Article 5(4) of the optional protocol (Matter number CCPR/c/137/D/3585/2019). See the case decision and the appeal decision.

²⁵ Ibid. Views adopted by the Human Rights Committee under article 5 (4) of the Optional Protocol concerning communication 3585/2019, submission from Ailsa Roy (Wunna Nyiyaparli Indigenous People), distributed 10 July 2023.

²⁶ Wensing, E. (2019) Land Justice for Indigenous Australians: How can the two systems of land ownership, use and tenure co-exist with mutual respect based on parity and justice? PhD Thesis, Australian National University

²⁷ Ibid. Only 4 of the 25 regimes allow for sale.

²⁸ Section 42B of the Act.

²⁹ British Columbia, First Nations Clean Energy Business Fund.

³⁰ See Asma Aziz and Iftekhar Ahmad, The Conversation, A clean energy grid means 10,000km of new transmission lines. They can only be built with community backing,17 August 2022.

³¹ Premier of Victoria, Press Release, Landholder Payments For A Fairer Renewables Transition, 23 February 2023.

³² NSW government, Strategic Benefit Payments Scheme.

NB. We are currently seeking clarification from EnergyCo, but it appears that the Strategic Benefit Payments Scheme in NSW may exclude Aboriginal Land Rights Act land, because that is classified as ʻpublicʼ land for the purposes of the Electricity Supply Act 1995.

³³ Powerlink, New SuperGrid Landholder Payment Framework an Australian first, 18 May 2023.

³⁴ For a range of factors, including limitations with the leverage provided by s 24KA of the Native Title Act and the disparate, dispersed nature of formally titled land held by Traditional Owners, particularly in more developed parts of the National Electricity Market where transmission infrastructure will likely be built.

³⁵ AEMO, 2020 Integrated System Plan (ISP).

³⁶ See Rewiring the Nation.

³⁷ See Energy Networks Australia - Guide to Australiaʼs Energy Networks.

³⁸ See National Electricity Market.

³⁹ See OʼFairchealleagh, C., A new approach to policy evaluation: mining and Indigenous people, 2022.

⁴⁰ Victorian Transmission Investment Framework, Partnering with Traditional Owners through planning and development, June 2023, page 4.

⁴¹ Victoria Government, Pupangarli Marnmarnepu 'Owning Our Futureʼ, Aboriginal Self-Determination Reform Strategy 2020-2025.

⁴² Victorian Transmission Investment Framework, Partnering with Traditional Owners through planning and development, June 2023, page 12.

⁴³ Ibid.

⁴⁴ Ibid, page 17, see also Community Engagement and Benefit Sharing in Renewable Energy Development in Victoria, page 12 and 13.

⁴⁵ Victorian Minister for Energy and Resources Lily DʼAmbrosio, Landholder payments for a fairer renewables transition, 23 February 2023.

⁴⁶ Queensland Government, 2023 Queensland Renewable Energy Zone Roadmap, July 2023, page 14.

⁴⁷ Ibid, page 9, 52.

⁴⁸ Ibid, page 14.

⁴⁹ NB: no commitment to cultural heritage surveys, which are crucial to identifying cultural heritage.

⁵⁰ NSW Government, NSW Climate and Energy Action, First Nations Guidelines “collaborative and inclusive decision-making under the principles of free, prior, and informed consent”, page 16.

⁵¹ We query whether the First Nations Guidelines comply with the Act: The Minister is to issue guidelines about consultation and negotiation with the local Aboriginal community in relation to relevant projects for the purposes of increasing employment and income opportunities for the local Aboriginal community.

⁵² ElectraNet, Transmission Annual Planning Report, October 2023.

⁵³ PlanSA, South Australia - New South Wales Electricity Interconnector.

⁵⁴ https://sarigbasis.pir.sa.gov.au/WebtopEw/ws/samref/sarig1/image/DDD/MRGMG25.pdf

⁵⁵ Note: Charter of Human Rights and Responsibilities Bill 2020 s 26.

⁵⁶ South Australian Government, South Australiaʼs Implementation Plan for the National Agreement on Closing the Gap, 29 July 2021, page 9.

⁵⁷ Project Energy Connect, Cultural Heritage Management Plan Framework.

⁵⁸ Government of South Australia, Department for Energy and Mining, Hydrogen and Renewable Energy Act, Explanatory Guide to the Bill, 2023, page 8.

⁵⁹ ARUP, Infrastructure Western Australia, Energy – Technical and Policy review, Version 1, 16 March 2021, page 20.

⁶⁰ Western Australia government, Whole of System Plan, Information Sheet, August 2020.

⁶¹ Western Australia government, Aboriginal Procurement Policy Nov 2021, page 7, https://www.wa.gov.au/government/announcements/aboriginal-procurement-policy-report-2021-22. ⁶³ Northern Territory Government, Aboriginal Procurement Policy, Advancing Aboriginal Business.

⁶² Northern Territory Government, Darwin-Katherine Electricity System Plan.

⁶⁴ Tasmanian Government, Renewable Energy Zones.

⁶⁵ Tasmanian Government, About REZ.

⁶⁶ Tasmanian Government, Renewable Energy Development in Tasmania - a Guideline for Engagement, Benefit Sharing and Local Procurement (Draft 2022), page 24.

⁶⁷ Tasmanian Government, Renewable Energy Development in Tasmania - a Guideline for Engagement, Benefit Sharing and Local Procurement (Draft 2022), page 14.

⁶⁸ Climate Council, Territory Trailblazer: How the ACT became a Renewable Energy Capital of Australia, 2016, page 13.

⁶⁹ ACT Government, Aboriginal and Torres Strait Islander Procurement Policy, 31 May 2019. page 70, 71

⁷⁰ Warrier, V., Morrison, L., White, A., Buffalo, S. (2021), Indigenous Ownership of Natural Resource Projects: A Framework for Partnership and Economic Development, Alberta Law Review Volume 59 (2), pp 393 – 425, Appendix A, p 422.

⁷¹ First Nations Major Projects Coalition, The Role of Indigenous People in Major Project Development - Part II - Indigenous Ownership of Electricity Infrastructure: A Case Study, May 2020.

Australia can’t let this opportunity be missed. The Federal Government must use the revised Capacity Investment Scheme announcement to design a system that embeds First Nations outcomes into its auction process, bringing everyone together to achieve an inclusive clean energy transition.

The temperature is rising.

To meet its ambitious 82% renewable energy target for 2030, the federal government has announced it’s dumping its Renewable Energy Target policy and replacing it with auctions as the best mechanism to get new renewable energy projects under way.

The revised Capacity Investment Scheme will ramp up from 6 gigawatts (GW) of storage to more than 9GW of dispatchable capacity, and will add 23GW of variable capacity, or wind and solar. The Scheme will be eligible to “uncommitted” projects from November 2023.

First Nations are reasonably expected to feel some anticipation about this.

For, as part of the change, new policy will be developed detailing contracting and procurement requirements, and States/Territories are required to improve their planning and regulatory assessment pathways.

This opens an opportunity to embed First Nations in these assessment pathways and to develop other innovative policy and process measures, suggestions First Nations have been pushing in multiple roundtable discussions this year to inform the government's First Nations Clean Energy Strategy.

In Canada, around 20% of renewable energy initiatives have Indigenous ownership and/or equity, providing income, wealth generation and employment for Canada’s Inuit, Métis and First Nations peoples. And these projects deliver better value and returns to investors.

Targeted government policy and genuine investment enabled that to occur.

The Australian government knows the critical role genuine First Nations involvement plays in this country’s transition.

Federal Minister the Hon Chris Bowen MP told the Lowy Institute on Tuesday, “getting First Nations involvement in renewable energy right can play a big role in the future economic health of Australia's Indigenous peoples”.

Success in First Nations involvement will also lead to better projects, greater certainty, reduced risk and increased shareholder value.

Done the right way, driven by communities, clean energy can be developed so it sustains Country for generations to come.

While First Nations engagement as a key pillar has been mentioned in numerous government strategies this year, including its Critical Minerals Strategy, to date investment backing up these sentiments has been seriously lacking.

Last week’s announcement about using auctions as a mechanism to get new projects under way provides an opportunity to demonstrate real action.

Using the auction process to build a better system for First Nations

Over the last decade, more than 100 countries worldwide have adopted auctions as a way to deploy renewable energy.

This common tool of government policy is also consistently used by governments to achieve specific outcomes - such as inclusive growth, or particular outcomes, like for host communities.

For example in 2009, South Africa designed a process that sought to ramp up host community and local content requirements from projects, along with Black economic development and empowerment.

Also in 2009, the province of Ontario in Canada passed the Green Energy and Green Economy Act, introducing a feed-in tariff known as the “Aboriginal Price-Adder” which essentially guaranteed an increased price for projects passing certain thresholds of Indigenous ownership. At the same time, Ontario launched an Aboriginal Loan Guarantee Program supporting Indigenous equity participation in renewable energy projects.

More recently in British Columbia in Canada, the government-owned electricity generator and retailer BC Hydro and Power Authority and the government have been working with First Nations to move forward a call for new sources of renewable, emission-free electricity (including wind and solar).

The call for power in BC puts Indigenous people upfront, and proponents will need to demonstrate a minimum Indigenous ownership in their projects along with other minimum requirements for Indigenous participation.

Coupled with CAD$140 million in funding to the British Columbia Indigenous Clean Energy Initiative, an agency providing support and capacity-building funds to

Indigenous communities working on the development of clean energy projects, it is clear Indigenous equity will be considered a standard requirement for those submitting tender responses.

These are just some examples demonstrating how auction processes can provide governments with opportunities to realise additional impacts - like more inclusive growth, host community and other local benefits, and First Nations outcomes.

An energy transition inclusive of First Nations - what will it take?

As Canada has demonstrated, First Nations consent, participation, inclusion, ownership and equity can safeguard projects.

Auction design can include preferencing offtakes, clear inclusion and outcomes in tender processes, mandated involvement in the planning scheme (including potentially expedited approvals for projects that are First Nations owned) or options for being the regulator, among other elements.

With billions of dollars of public money at stake through the Federal Government’s reliance on auctions, and with numerous international examples available that can be replicated to achieve a system delivering the sorts of outcomes we also want to see in Australia, we can’t let this opportunity be missed.

The Federal Government must use this announcement to design a system that brings everyone together to achieve an inclusive clean energy transition by embedding First Nations outcomes into its auction process.

By Jonathan Kneebone, First Nations Clean Energy Network

The temperature is rising. The Australian government knows the critical role genuine First Nations involvement plays in this country’s transition. 

You're invited to the next roundtable feeding into the First Nations Clean Energy Strategy being held in Cairns on 28-29 August 2023.

The Australian Government’s energy policy comprises a large number of energy strategies and frameworks, policies and programs. These are broadly designed to underpin the supply of energy (reliable, secure and affordable), whilst also aiming to improve energy supply, efficiency, quality, performance and productivity, and reduce emissions. 

Read the paper here

This week, First Nations communities got involved in a community roundtable about energy transition in Alice Springs.

It is an exciting time in the energy sector with new technologies, ways to decarbonise, and innovations to make the day-to-day lives of many Australians easier – with abundant reliable, clean energy on the horizon.