In a food processor, pulse 1/2 cup of sugar and 1 & 1/2 ounces of macadamias until finely ground. Add the flour and baking powder, then pulse until well mixed.
Press the dough firmly into the prepared pan. Lightly sprinkle the top of the dough with water, then sprinkle the finely chopped macadamias and remaining 1/3 cup sugar on top.
While the shortbread is still warm, lift it from the pan using the overhanging lining and transfer to a cutting board. Cut into squares using a sharp knife.
Allow the cookies to cool completely before serving. If they aren’t crisp after cooling, return them to the pan and bake for an additional 10-15 minutes at 300°F.