New renewables pilot seeks to generate power, and financial returns, for First Nations communities

A new federal grant will provide $10 million to First Nations clean energy projects, in a pilot designed to bridge the funding gap for mid-size community renewables initiatives.

The First Nations Clean Energy Projects grant will help up to two projects sized at 1 megawatt (MW) or higher to move beyond feasibility and towards financial close.

“That was a recommendation of the [First Nations Clean Energy and Climate Change Advisory Committee], and it’s great to see that put into place,” Matt Brine, deputy secretary of the Department of Climate Change, Energy, the Environment and Water (DCCEEW) said on Thursday. 

“Hopefully, we see more coming down the track soon. 

“The pilot grants aim to support projects with First Nations leadership, decision-making participation, and the potential to generate long-term financial returns for First Nations people.”

The pilot, which energy minister Chris Bowen heralded at the First Nations Clean Energy Symposium in Geelong this week, gives organisations until the end of September to get their applications in. 

Funding for mid-sized community projects, but particularly for those in remote First Nations locations, is challenging, partly because each one is bespoke. 

There are standardised network tests, for example, that can be done to verify how a system will behave on the network. But these don’t make financial sense for small, 5-10 MW projects, says Josiah Fajardo, an engineer with consultancy Ekistica.

“That problem is then magnified for community-based projects,” he said at the symposium. 

“While developers may be willing to upfront front up the capital and take on the risk to clear some of these hurdles so that they can get to an investable project, every barrier that’s in place for community projects is another grant, another source of funding, another capital provider to get the money to do those studies.

“If new things arise while those studies are being done, new problems that emerge that utilities want solved before the project can progress, it’s another barrier, another roadblock, another source of funding that needs to be achieved.”

Original Power’s 100 kilowatt (kW) solar system and 136 kilowatt-hour (kWh) battery Marlinja microgrid in the Northern Territory – an award-winning First Nations community project – has experienced all of these issues.

Original Power’s Lauren Mellor told the Solar Insiders podcast earlier this year the time it takes to assess these projects is too long for commercial investors to stay the course, and evaluations too ill-defined for more to be party to. 

“That’s where we’re seeing there is a big risk unless utilities and governments start to address that and have more established processes for grid connection,” she said in April. 

“Capped timelines and capped assessment costs that recognize the true benefit of these community energy projects as opposed to a commercial project.”

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