The First Nations Clean Energy Strategy provides an endorsed national framework for equitable partnerships, economic benefits and better energy access. The Electricity Services Entry Mechanism (ESEM) should be designed as an instrument for delivering its goals.

The First Nations Clean Energy Strategy provides an endorsed national framework for equitable partnerships, economic benefits and better energy access. The Electricity Services Entry Mechanism (ESEM) should be designed as an instrument for delivering its goals. 

First Nations participation supports better projects 

First Nations are rights holders with continuing responsibilities for Country, whose rights and decision-making authority require recognition in their own terms. First Nations should also be able to shape projects and share in the long-term economic value created on Country. 

These commitments are also relevant to investment and delivery. The Network’s report Investor benefits of First Nations participation in clean energy projects, identifies potential benefits including faster development, lower project risk, improved access to capital and offtake, and workforce opportunities. The benefits depend on the quality of the partnership and project circumstances. 

A narrow focus on bid price can overlook these delivery benefits. Nationally consistent standards, published before procurement, can reduce compliance costs and uncertainty for developers and investors, improve project planning and limit the risk of unanticipated delays. Credible partnerships and clear requirements support affordable, reliable electricity over the project lifecycle. 

Our September 2025 submission sought competitive First Nations merit criteria, with national preconditions as the minimum fallback. Our July 2026 briefing focused on national expectations, credible gateways and enforceable delivery under the expected price-based model. Competitive merit assessment remains our preferred approach. Strong national requirements for rights and economic participation are essential if price-only auctions proceed. 

Our response to the consultation

Proposed National Electricity Law (NEL) section 118AAI defines the entry objective around reliability and emissions targets at the lowest cost to consumers. Section 118AAK sets related principles but contains no express First Nations requirement. This framework should be amended to require the Administrator to give effect to First Nations rights and participation requirements when designing and conducting procurements, and to authorise procurement arrangements that advance First Nations economic participation. 

The proposed statutory framework should make clear that cost minimisation operates subject to these requirements. Sections 118AAM and the proposed Schedule 1 rule-making powers, particularly items 14Z, 14ZB and 14ZC, should support the corresponding standards, procurement arrangements, reporting and enforcement. Core obligations belong in the Law and Rules; guidelines should explain how to meet them. 

The Future Made in Australia Act 2024 provides a legislative precedent. The Network’s July 2024 submission called for a distinct First Nations community benefit principle. Section 10(3)(a)(iiia) of the enacted Act now expressly recognises First Nations communities and Traditional Owners participating in and sharing the benefits of the transition to net zero. This precedent supports an equivalent express focus in the ESEM. 

In our subsequent proposals on implementing the community benefit principles, we distinguish the quality of engagement under Principle 3 from material economic outcomes under Principle 4. The ESEM should likewise recognise First Nations economic participation separately from general community engagement and benefits. 

Set national standards and reward stronger commitments 

The government's consultation paper recognises the desirability of ESEM-wide eligibility criteria. The Network proposes that this should be given clear effect in the Rules by requiring national minimum community, social and environmental standards alongside distinct First Nations requirements. 

The Network suggests that clauses 4AA.C.7, 4AA.C.9 and 4AA.C.36 should be amended to require early engagement with Traditional Owners and affected First Nations groups and communities to enable the exercise of self-determination and free, prior and informed consent (FPIC), heritage protection, and credible, locally agreed participation and benefits. Stage-appropriate requirements through development, operation, decommissioning and closure should be applied. 

The gateway must assess economic outcomes as well as engagement processes and should require measurable commitments to ownership or revenue participation, employment and training, procurement from First Nations businesses, and business development, reflecting community priorities. 

Projects should demonstrate credible delivery plans and the capacity and resources to implement them. General community funds or consultation activities should not be treated as satisfying distinct First Nations economic participation requirements. 

The Network suggests that national minimum and tiered economic participation requirements with First Nations organisations should be developed.

The Network’s FMIA proposals seek at a minimum a 5 per cent equity or an equivalent revenue-sharing interest, with stronger participation and governance rights recognised above that floor. These proposals should inform ESEM requirements, with transparent assessment of economic equivalence and community choice over arrangements. The minimum must operate as a floor, not a ceiling. 

Amend clause 4AA.C.7(b) to require capacity and commitment to meet national standards, making these mandatory rather than part of the criteria the Guidelines may include. Clause 4AA.C.36 should require standards, evidence and assessment processes to be published before procurement. 

Jurisdictions should be able to supplement or strengthen these standards. Amend clause 4AA.C.9(d) and the inconsistency exception in clause 4AA.C.7(a)(5) so national minimums cannot be weakened or displaced, including for cross-jurisdictional bids. Establish transparent procedures for resolving overlaps while maintaining each national minimum. 

Mandatory standards should be accompanied by competitive assessment of stronger First Nations commitments. Capacity Investment Scheme (CIS) Tender 9 assigns a distinct 12.5 per cent weighting to First Nations participation and benefits sharing, alongside a separate social outcomes criterion. This is a useful precedent for recognising First Nations interests distinctly from general community benefits. 

Retaining that incentive requires an amendment to clause 4AA.C.10, which expressly requires assessment of eligible bids on bid price only. Amend that clause and the assessment methodology under clause 4AA.C.36 to allow meaningful assessment of the quality, durability and deliverability of First Nations commitments alongside price. Stronger commitments should be verified with the relevant First Nations groups, rather than assessed solely from proponents’claims. 

If price-only auctions are retained, mandatory national standards covering substantive economic participation, a dedicated participation allocation and enforceable delivery obligations are essential safeguards. They should be designed to lift ambition over time. This fallback would still provide less incentive for continuous improvement than competitive merit assessment. 

Create an enduring pathway to ownership 

The ESEM should preserve and develop the CIS First Nations set-aside approach. CIS Tenders 9, 10 and 11 included a dedicated allocation for projects committing to qualifying First Nations sharing arrangements. A dedicated allocation should complement the national economic participation standards applying to all supported projects. 

The ESEM should establish an explicit power and requirement to provide a dedicated allocation for projects with meaningful First Nations ownership or community-chosen sharing arrangements. Develop the allocation, eligibility requirements and review process with First Nations organisations. Equity should provide real economic value and appropriate governance rights, while revenue sharing should be transparent, durable and reflect the community’s self-determine choice. 

Clause 4AA.C.42 currently concerns jurisdictional technology targets. It should not be assumed to authorise an ownership-based allocation. The Law and Rules need a clear additional pathway for that purpose. National First Nations minimum standards should apply to all relevant procurement pathways, including special-purpose procurement. 

Procurement incentives must be supported by access to independent advice and suitable capital. Governments should coordinate existing First Nations advice programs and public investment institutions to help communities assess opportunities and finance participation.

Communities must remain free to decline equity or a project, and should not need to surrender rights or accept excessive financial risk to receive benefits. 

Secure delivery through enforceable obligations 

Amend clause 4AA.C.18(b)(5) to extend the requirement to comply with project criteria to all relevant gateway requirements and commitments, including First Nations, community, social and environmental obligations. Clause 4AA.C.36 should require measurable contractual obligations and monitoring. Use ESEM related contracts, including development agreements, alongside standardised, tradeable derivatives. The Financial Management Entity’s enforcement function under proposed NEL section 118AAM should expressly encompass these obligations. 

Contracts should specify milestones, reporting, verification with affected First Nations groups, independent checks where appropriate, remedies and proportionate consequences for non-compliance. Commitments should survive changes in project ownership and continue through decommissioning and closure where relevant. Affected First Nations groups should have accessible ways to report failures and seek resolution. 

Project-level commitments and aggregate delivery results should be published with the agreement of participating First Nations groups, protecting cultural information and legitimate commercial confidentiality. Reporting must distinguish promised benefits from benefits actually delivered. Material changes to agreed arrangements should require the affected First Nations parties’informed agreement and appropriate scheme oversight. 

Renewable Electricity Guarantee of Origin (REGO) certificates administered by the Clean Energy Regulator can record First Nations attributes. The ESEM should align relevant definitions, facility identifiers and evidence requirements with the Guarantee of Origin framework. Verified information could support monitoring and inform buyers and investors, subject to First Nations authorisation, data sovereignty and confidentiality. 

Safeguard special purpose procurement 

Special-purpose procurement can address technology-specific barriers, but must remain consistent with reliable, affordable electricity and emissions reduction. Strengthen clause 4AA.C.42 to prevent technology-specific tenders for fossil fuel generation where the required firming services can be delivered through technology-neutral procurement. Any departure from technology-neutral procurement should require a clear, demonstrated public benefit. 

Before a special-purpose tender seeking fossil fuel generation proceeds, require the relevant jurisdiction to publish a justification for the Administrator’s assessment. It should compare clean alternatives capable of delivering the required services and account for lifecycle emissions, including upstream methane. It should also assess costs and risks to consumers, including fuel-price volatility, contract duration, construction delays and current evidence on turbine and equipment supply chains. 

The Administrator should publish its assessment and reasons before procurement. Existing prohibitions on modifying eligibility criteria should remain, and national First Nations, community, social and environmental minimums must apply. First Nations rights and participation requirements should be maintained across procurement pathways, with affected groups involved in decisions concerning Country. 

Resource participation and accessible procurement 

First Nations representation must help develop the ESEM guidelines, standards, ownership pathway and related contracts before procurement starts. First Nations representation should also inform ongoing governance and review.

Consultation with general industry stakeholders alone will not provide the knowledge or authority needed to design these requirements. 

First Nations communities and groups require sufficient time, information and access to independent legal, financial and technical advice to negotiate on fair terms. Tender schedules should allow for community decision-making. Financial capacity tests, minimum project sizes and delivery milestones should be proportionate and accommodate credible consortia and partnerships, so they do not unnecessarily exclude First Nations-led projects. Requirements must remain sufficient to protect consumers and secure delivery. 

Read our submission

There is an important dimension largely absent from NSW's current proposals for data centre electricity connection and cost recovery, being the rights, interests, cultural and Country responsibilities, and economic opportunities of First Nations people. 

On the proposed reforms, the Network broadly supports their direction.

However, there is an important dimension largely absent from the current proposals, being the rights, interests, cultural and Country responsibilities, and economic opportunities of First Nations people. 

Data centres should not be considered only as buildings connected to an electricity network. Their impacts extend across the infrastructure systems required to service them: renewable generation and storage, transmission and distribution infrastructure, water, land and associated infrastructure. 

This infrastructure will be developed on First Nations Country, including in areas where First Nations people hold legally recognised rights and interests, and much of the associated generation, storage and transmission infrastructure is likely to be located in regional NSW. 

The Network therefore recommends that NSW apply the same system-wide approach it is adopting to electricity infrastructure to First Nations rights, interests and economic participation. 

This should have two complementary objectives. 

First, data centre development must respect First Nations self-determination and ensure that Traditional Owners have genuine choice and agency over development affecting their Country, culture, heritage, water and environment, including through processes consistent with FPIC. 

Second, the extraordinary investment in new electricity supply driven by data centres should be deliberately used to create opportunities for First Nations ownership and economic participation, including by creating demand for First Nations-owned clean energy. 

Recommendations 

1. Recognise the whole infrastructure footprint of data centres, including generation, storage, transmission, distribution and water infrastructure, when considering First Nations rights, interests, impacts and opportunities. 
2. Embed First Nations self-determination, choice, agency and Free, Prior and Informed Consent (FPIC) into relevant data centre planning, network access and associated infrastructure processes, with engagement occurring while material decisions about location, scale, design and conditions remain open. 
3. Apply established First Nations best-practice principles and leading-practice guidance to data centre development and associated infrastructure, rather than developing a weaker or separate standard for data centres. 
4. Require and resource meaningful First Nations participation. data centre proponents should provide appropriate resources to affected First Nations communities and groups to participate throughout project development, assessment and implementation, including funding for independent legal, technical, commercial, cultural heritage and other advice where required. Engagement timeframes should accommodate First Nations governance and decision-making processes rather than being dictated solely by proponents' development schedules. 
5. Require responsible and transparent water use. data centre proponents should be required to disclose and minimise water consumption, identify the source and infrastructure required to supply water, and assess cumulative impacts on water systems and First Nations Country, rights and cultural values. Affected First Nations people should be engaged and appropriately resourced to participate in decisions about water use and associated infrastructure. 
6. Establish a First Nations clean-energy procurement requirement within requirements for data centres to procure additional renewable energy and firming, initially through an obligation to identify and genuinely test opportunities to procure from, contract with or invest in First Nations-owned and controlled projects. 
7. Develop measurable First Nations procurement and ownership targets for data centre energy procurement as the First Nations clean-energy project pipeline develops. 
8. Include First Nations outcomes as explicit merit criteria in any large load access scheme, including First Nations clean-energy procurement, ownership and equity, protection of Country and culture, First Nations business procurement, employment and training, and benefit sharing. 
9. Require transparent reporting of First Nations outcomes associated with major data centre developments and the energy infrastructure that services them. 
10. Engage and appropriately resource First Nations organisations to participate in developing the proposed large load access scheme and subsequent data centre regulatory reforms. 

Read our submission

The First Nations Clean Energy Network supports reform that can deliver a more planned, reliable, transparent and efficient Northern Territory electricity system.

But the architecture will not be fit for the Territory unless it is designed around the people and communities it serves, including First Nations communities, and around the technologies that will define the future system. 

Australia’s clean energy transition is accelerating but First Nations participation and benefit continues to lag behind the pace and scale of change.

Principles ensuring that First Nations participation and benefit is real, measurable and enduring should be embedded directly in the Ministerial rules and reflected in eligibility criteria, Future Made in Australia Plan requirements, monitoring frameworks and enforcement mechanisms, according to a new submission by the First Nations Clean Energy Network.

The legislative intent is very clear.

Support under the Future Made in Australia Act is conditional on delivering Community Benefit Principles, and decision-makers must be equipped with clear, enforceable rules to assess whether outcomes for First Nations communities and Traditional Owners are genuinely achieved.

Read our submission

The Network strongly supports the intent of the Community Benefit Principles as a core accountability mechanism to ensure that significant public investment under the Future Made in Australia framework delivers genuine, measurable and durable benefits to communities. 

However, intent alone is insufficient.

For the Community Benefit Principles to give effect to Parliament’s intent, they must be operationalised through clear, enforceable and outcome‑focused rules and requirements that shape project behaviour and capital allocation decisions. 

Framing First Nations participation as an investor and commercial benefit - evidence snapshot

Evidence compiled by EY and the First Nations Clean Energy Network demonstrates that projects with meaningful First Nations equity or revenue participation: 

• experience materially lower social and regulatory risk profiles 
• benefit from faster and more predictable development timelines 
• attract a broader pool of patient and values-aligned capital, and 
• show stronger long-term operational performance. 

From an investor perspective, First Nations participation is best understood as a value creation and risk mitigation mechanism, not a cost. 

The Community Benefit Principles are a critical lever to embed this value proposition into Australia’s industrial and clean energy policy architecture. 

Principles to anchor the rules

The Network strongly recommends that rules made under the FMIA Act be anchored in a clear set of principles that decision-makers must apply when assessing eligibility for, and compliance with Community Benefit Principles.

They include:

• Principle 1: Rights and Free, Prior and Informed Consent 
• Principle 2: First Nations priorities 
• Principle 3: Best-practice participation and benefit-sharing 
• Principle 4: Monitoring, reporting and influence 
• Principle 5: Enduring partnerships
• Principle 6: Cultural competency and organisational capability 

These principles reflect the intent of the FMIA Act, international best practice, and the Network’s prior advice to the Commonwealth on a range of matters.

They are essential to ensuring that First Nations participation and benefit is real, measurable and enduring, rather than procedural or symbolic.

These principles should be embedded directly in the Ministerial rules and reflected in eligibility criteria, FMIA Plan requirements, monitoring frameworks and enforcement mechanisms. 

Making Community Benefit Principles more effective going forward

Community Benefit Principle 4 - First Nations and Traditional Owner participation and benefit

Community Benefit Principle 4 is the primary mechanism through which the FMIA framework must give effect to the statutory requirement to support First Nations communities and Traditional Owners to participate in, and share in the benefits of, the transition to net zero.

The Network is concerned that the minimum requirements proposed for Community Benefit Principle 4 in Appendix A of the draft guidance are framed almost exclusively through a narrow employment lens. In particular, the sole minimum requirement for Community Benefit Principle 4 is a target for First Nations employment.

The Network strongly recommends that the minimum requirements for Community Benefit Principle 4 be expanded beyond employment to reflect its full economic scope.

Community Benefit Principle 4 is distinct from, but complementary to Community Benefit Principle 3

Community Benefit Principle 3 focuses on how proponents engage with communities, including the quality, timing and resourcing of engagement and benefit-sharing processes. Community Benefit Principle 4, by contrast, is concerned with what communities ultimately receive in economic terms.

In practical terms:

• Community Benefit Principle 3 should ensure that engagement is early, continuous, culturally informed and capable of influencing project design and commercial decisions, and
• Community Benefit Principle 4 should ensure that this engagement translates into material economic outcomes for First Nations communities and Traditional Owners.

Conflating Community Benefit Principle 4 with Community Benefit Principle 3 risks reducing First Nations outcomes to process measures rather than economic results. 

Material economic participation 

To give effect to Community Benefit Principle 4, FMIA rules must require proponents to demonstrate pathways for First Nations communities and Traditional Owners to participate economically in FMIA-supported projects, in forms determined by those communities and Traditional Owner groups.

This should include, where sought by communities:

• equity or ownership interests, providing long-term revenue streams, governance influence and intergenerational benefit
• revenue-sharing arrangements, including fixed or variable payments linked to project performance
• hybrid models that combine early revenue with longer-term equity pathways
• governance rights, including decision-making authority over defined aspects of the project, and
• local economic development opportunities, including procurement, business development and investment pathways.

These mechanisms are central to First Nations self-determination, enabling First Nations communities and Traditional Owners to set their own priorities and determine how economic benefits are used over time.

Minimum floors and tiered expectations under Community Benefit Principle 4

The Network emphasises that the proposed minimum and tiered participation levels are deliberately calibrated to be both credible and aspirational.

International experience demonstrates that significantly higher levels of First Nations equity participation — including minimum minority interests of 25 per cent or more — are achievable and financeable when supported by clear policy signals and appropriate financing mechanisms.

The tiered approach proposed here is intended as a foundation that can scale over time, not as a ceiling on ambition.

At a minimum, proponents should be required to demonstrate outcomes for affected First Nations communities and Traditional Owners, including:

• verified and demonstrable processes enabling Free, Prior and Informed Consent and self-determination
• compliance with cultural heritage, land rights and anti-discrimination laws (NB. additionally and as noted above, the Network considers that any evidence of prior non-compliance with cultural heritage, land rights, native title or anti-discrimination laws must render a proponent ineligible for any FMIA support)
• respect for First Nations data sovereignty, and
• a minimum 5% equity or equivalent revenue-sharing interest for Traditional Owners and/or relevant First Nations communities, structured in a way that reflects the preferences of the relevant Traditional Owner groups and communities (including gifted, financed, phased or hybrid models).

Proposals that deliver stronger outcomes should be explicitly recognised and preferred.

This includes:

• 5–10% equity or revenue participation, accompanied by defined governance rights over specified project elements; and
• greater than 10% equity or revenue participation, supported by co-governance arrangements such as board representation or equivalent mechanisms providing meaningful influence over project strategy and operations.

It is critical that the minimum participation requirement is framed as a floor rather than a ceiling.

FMIA rules and guidance should be designed to avoid market clustering at the minimum and to reward proponents that support deeper, community-led economic participation where this is sought by Traditional Owners and First Nations communities.

Where proponents propose alternatives to equity or revenue sharing, they should be required to demonstrate — with evidence — that the proposed arrangements deliver equivalent or superior long-term economic outcomes, consistent with community priorities and aspirations.

Read our submission

Australia’s clean energy transition is accelerating, but First Nations participation and benefit continues to lag behind the pace and scale of change.

Since the First Nations Clean Energy Network’s 2024–25 Pre‑Budget Submission, the Commonwealth has released the First Nations Clean Energy Strategy (2024–2030) and committed $70 million to its implementation.

While welcome, this funding is wholly inadequate when set against the Strategy’s intent and ambition, the scale of infrastructure being developed on First Nations land and waters, and the economic, social and energy security outcomes at stake. 

First Nations households continue to experience some of the highest energy costs, poorest housing quality and lowest levels of energy security in the country. First Nations organisations remain under‑resourced to be able to engage with, consent to, invest in and benefit from large‑scale clean energy infrastructure. Critically, there is still no adequately funded, national program to deliver solar, batteries and climate‑resilient retrofits at scale for First Nations housing. 

The gap between policy intent and delivery is widening. Without decisive fiscal intervention, the Strategy risks becoming aspirational rather than transformational. 

This 2026-27 Pre-Budget Submission updates and re‑states the Network’s core budget priorities which were clearly set out in our 2024-25 Pre-Budget Submission. They include:

1. Recommendation 1: Invest in First Nations housing energy efficiency, household electrification, and solar and battery systems to reduce costs of living and improve household wellbeing
2. Recommendation 2: Invest in First Nations-led community energy and diesel reduction initiatives for improved climate resilience, emissions reduction and energy reliability
3. Recommendation 3: Invest in First Nations people, organisations and ideas to improve capacity and capability, and provide access to capital for First Nations clean energy project leadership to de-risk and add value to Australia’s clean energy transition ambition.

Many of the Network’s previous recommendations remain unchanged because the underlying structural barriers remain unresolved.

The clean energy transition cannot proceed at the speed and scale required without properly resourcing First Nations communities, organisations and households as energy participants, owners and decision‑makers. 

Read our submission

The Network has responded to the Australian Energy Regulator's Retail Guidelines Review which directly affects every aspect of First Nations energy experience—from billing and concessions, to hardship pathways, to protections for prepayment customers, to conditions for meaningful participation in the energy transition.