First Nations turn to wind for independence

CANADA: Canada's aboriginal groups are taking an increasing degree of control and ownership of wind projects built on their ancestral lands. This local enthusiasm for a resource the community can own and operate could boost wind-energy development across the country.

Milestone: The M’Chigeeng Mother Earth project is the first 100% First Nation-owned wind farm in Canada (pic:3G Energy)

When Ireland-based Vortex Wind Power approached Ontario's Batchewana First Nation in 2007 about building a large-scale project on its traditional territory, the chief and council made it clear they wanted to be more than merely consulted. The Batchewana had developed their own permitting processes for projects on their reserve and on a larger swathe of public land skirting the north-eastern shore of Lake Superior used by their Ojibway ancestors. The aboriginal group also wanted to see tangible benefits from the development of that land.

"We expect to be partners with the companies that are extracting any type of natural resources, including wind," says chief Dean Sayers. "We want to empower ourselves and be a part of these projects and create a good economic foundation for our people."

Vortex was receptive, says Sayers, and when Alberta-based independent renewable-power producer BluEarth Renewables acquired the project in 2011, it continued the discussions.

Last year, the parties concluded an agreement that gives the Batchewana a 50% ownership interest in the 58MW Bow Lake project. The wind farm, located about 80 kilometres north-west of Sault Ste Marie, is scheduled to start construction this year. Sayers expects revenues to start flowing into his community of 2,500 in the next 18 months. "It is a pretty exciting time," he says.

The Batchewana First Nation is one of a growing number of aboriginal groups taking a commercial stake in Canada's wind-energy sector. Underpinning their ability to do so is a constitutionally recognised responsibility on the part of governments in Canada to ensure First Nations have a say when it comes to development within their traditional territories, says aboriginal affairs consultant John Kim Bell.

Constitutional rights

"Since 1996 there have been about five Supreme Court of Canada cases that have established a new threshold of rights for First Nations. Those rulings taken together have created a law called the duty to consult and accommodate," says Bell, a Mohawk born on the Kahnawake reserve in Quebec. "I think that is the big driver, myself."

Although the duty to consult technically lies with government, in practice it has been transferred to developers. What exactly it requires has long been a grey area, but Bell says that, over time, it has evolved from compensating First Nations for any environmental impacts to negotiating benefits packages, and then to providing opportunities for direct participation in projects. "The old impact benefit agreement is still alive and well, but it really is giving way to the predominant desire among First Nations to own and operate," Bell says. "They want an equity position. They want to build assets."

Bell believes the legal framework for First Nation involvement sets Canada apart. He consults internationally, mainly in the mining sector, and sees a very different relationship between resource companies and aboriginal groups in Central and South America, and Africa. "I think Canada, in terms of indigenous populations and government policy and resource development in general, is sort of at the top," he says.

"I could name the top dozen wind producers and everybody understands that First Nations have to be accommodated. There is no resistance to it."

Model for the future

Bluearth Renewables actually prefers the type of commercial partnership it has worked out with Batchewana, says Marlo Raynolds, the company's vice-president of market development.

"We have seen it as a strategic advantage to genuinely partner with aboriginal bands," he says. "When we look at any energy development in Canada and the role of aboriginal communities, whether it be pipelines, oil sands, transmission lines or renewable energy, it is a very different space than it was a decade or two ago. I think developers who ignore that changing landscape are not going to be successful."

The fact that wind projects are typically in rural areas, and that the industry is pushing more into untapped markets such as British Columbia, where the lack of treaties with First Nations has left much of the land base subject to aboriginal claims, and into northern regions, where First Nations have a much stronger presence, are also factors in the growth of aboriginal involvement in wind.

"Wherever you put a wind turbine, it is going to be in the traditional territory of at least one First Nation," says Raynolds. "I think to the extent that, as wind power grows in Canada, there is going to be an equally paced involvement with aboriginal communities, and I think it should be that way. I think that as their experience grows commercially and technically, they are going to become increasingly professional in this space."

First Nation initiatives

In fact, some First Nations are taking steps to develop that experience by initiating their own projects rather than waiting for developers to approach them. When Ontario's M'Chigeeng First Nation brought its 4MW Mother Earth wind project online in 2012 under the province's feed-in tariff (FIT) programme, it was the first wind farm in Canada to be 100% owned by an aboriginal community.

"The idea of a 20-year contract guaranteeing revenues was something community members liked, and they didn't want us to be sharing a project with an investor who would want anywhere from a 20-35% return on investment. It meant we would keep the revenues for our First Nation," says Grant Taibossgai, the project manager.

The commissioning of the wind farm in June 2012 was celebrated by the community with a grand opening ceremony, attended by Ontario energy minister Chris Bentley and keynote speaker David Suzuki, a Canadian science broadcaster and environmental activist.

Aboriginal affairs consultant John Kim Bell has worked with six of the nine Cree communities in the James Bay area of Quebec to set up a renewable-energy company, then connected it with an experienced industry partner. Through a series of agreements beginning in 1975, the Cree receive tens of millions of dollars a year in revenue from large hydro and mining developments in the region.

"They have money in the bank and they decided at some point that, instead of just receiving royalties from the province of Quebec, they want to have more control over resource development in their respective territories, and they want to be more self-determining by owning and operating wind projects," says Bell. "They are now negotiating with the Quebec government, and it looks like they are going to receive a dedicated tranche of wind power to develop."

The role of government

Provincial governments have been an important driver in the rise of First Nations involvement in wind.

Quebec targeted projects with at least 50% aboriginal ownership in a 2009 request for proposals (RFP). In its latest plan to buy another 800MW of wind, it awarded a power purchase contract to a 150MW wind farm planned by the Mi'gmawei Mawiomi, a group of three Mi'gmaq communities located in the Gaspe peninsula.

Ontario offered price incentives to FIT projects with aboriginal participation and created a loan guarantee programme to help them access financing, something both the Batchewana and M'Chigeeng took advantage of to help fund their equity investments.

In British Columbia, government-owned utility BC Hydro served notice of its intention to put "greater emphasis on First Nations participation" in clean energy projects in future RFPs.

Saskatchewan's state-owned utility, SaskPower, signed an agreement last year with the non-profit First Nations Power Authority that will guide discussions on how they will work together to establish a portfolio of aboriginal-led power generation projects.

"Governments are keen to find economic opportunities for First Nations," says Robert Hornung, president of the Canadian Wind Energy Association. As policymakers look at the role wind energy will play in Canada's future supply mix, that interest could help steer their policy choices. While there are a lot of factors governments will consider when it comes to evaluating future supply mix options, Hornung says, the fact that a growing number of First Nations are seeing the sector as a path to economic growth could help bolster the argument for expanded wind energy development.

Raynolds agrees. "I think there is a real potential sweet spot in there," he says.