Australia's clean energy transformation - engaging with First Nations
The world is currently undergoing a major transformation towards clean energy. Key technologies such as wind, solar and green hydrogen are being employed to decarbonise the environment and provide global energy security.
The Clean Energy Council has reported that Australia's renewable energy sector has nearly doubled in the past five years, from 16.9% in 2017 to 32.5% in 2021. The sector added 3.3 GW of new capacity in 2021, which was attributed to the completion of some of the country's largest wind and solar farms, and significant increases in small-scale solar.
Industry and climate advocates have every reason to be optimistic about Australia's clean energy future. The Albanese government has set ambitious plans for Australia to become a renewables superpower. Under the Paris Agreement, the Prime Minister has committed to cut greenhouse gas emissions by 43% below 2005 levels by 2030 and achieve net-zero emissions by 2050. It will be critical that the government follow through on these commitments with the right policy settings that give industry the confidence to make long-term investment decisions on the scale needed to achieve these ambitious targets.
At the same time, the government has also set an ambitious agenda for First Nations reform aimed at improving the lives of First Nations peoples. At the core of this reform agenda is the Uluru Statement from the Heart, which aims to establish a Voice to Parliament enshrined in the Constitution and a Makarrata Commission to oversee Treaty and truth telling. The Statement also acknowledges the sovereignty and enduring connection of First Nations peoples with the land and sea.
Given this context, it is more important than ever for businesses planning to undertake projects on land subject to First Nations property rights or interests (as is often the case with large scale renewable energy projects), to engage with First Nations communities in a way that is genuine, transparent, and fair.
Culturally appropriate engagement and negotiations based on trust and mutually beneficial outcomes are critical success factors. Negotiations with community can take years to reach agreement, as seen in the mining industry, and should be factored into the project planning horizon.
First Nations property rights and interests
Australia's mineral and energy boom of the 1970s and 1980s provides valuable lessons for large-scale renewable energy investments, particularly in relation to engaging with First Nations communities when conducting business on land subject to First Nations property rights.
While much of the large-scale development on First Nations land has been resource extraction, large-scale renewable energy projects also require vast amounts of land and have a significant footprint. Renewable energy resources are abundant in regional, rural and remote parts of Australia, where the environment is delicate, and land may be subject to First Nations property rights. With over 50% of land in Australia subject to Indigenous land rights and interests, negotiations with Traditional Owners are critical for many clean energy projects. These negotiations typically involve conditions around cultural heritage protection, employment and training, compensation and payment, and access to infrastructure such as telecommunications, energy and water.
First Nations Land rights and interests
Over 50% of land in Australia is subject to First Nations land rights and interests.
Businesses that recognise the importance of sustainability and social responsibility are finding that activities that have negative social or environmental impacts can cause irreparable reputational and financial damage. First Nations peoples and organisations are also becoming more experienced and sophisticated in their commercial dealings and negotiations, and are demanding a fairer deal for the use of their lands.
Well-executed corporate social responsibility programs by businesses are critical. Companies that engage First Nations businesses into their supply chains can get a bigger bang for their corporate social buck.
First Nations businesses are 100% more likely to employ other First Nations people, contributing to economic development and social outcomes for First Nations communities.
Source: Supply Nation
How Gudjala Management Consultancy can help
We help clients working on country to develop local content strategies, engage community in a culturally appropriate manner, and meet their workforce and supply chain requirements.
Skills shortages
Technological advancements in clean energy technologies have surpassed expectations with the price of wind and solar coming down much faster than anticipated. One of the biggest challenges to rapid expansion of the clean energy industry in Australia, is ensuring we have an appropriately skilled workforce to carry out the works. With around $66 billion of investments in large-scale renewables and a further $27 billion in rooftop solar expected over the coming decade (2020 Integrated System Plan, Australian Energy Market Operator), industry estimates tens of thousands of additional workers will be required to build wind and solar farms, transmission lines, batteries, and pumped hydro storage. These jobs are expected to be in regional, rural and remote areas.
The Australian labor market is already stretched, with the lowest rates of unemployment in decades and skills shortages across the board including in the construction sector. Skilling up and scaling up the construction workforce in regional, rural and remote areas will be critical to growth of the clean energy sector.
Indigenous talent
Clean energy projects are complex and require long lead times, and early engagement with capable businesses is essential to ensure security of supply. Leveraging and building First Nations talent in regional areas presents a significant opportunity for the clean energy sector. While a fly-in-fly-out workforce may be suitable for the construction phase, it is less practical during the operation and maintenance phase, and a locally based workforce would have more advantages.
First Nations businesses are well-positioned to provide services to the clean energy sector. According to research by the University of Melbourne (Indigenous Business Sector Snapshot 1.1, 2021), 58% of First Nations businesses are located outside major cities, with 32% in regional areas and 26% in remote locations. This is in contrast to the non-Indigenous sector, where most businesses are located in major cities (74%). The report also found that Indigenous businesses were represented in a diverse range of sectors, with construction (17%) and professional, scientific, and technical services (14%) being the top two sectors, respectively.