If clean energy is to drive Australia's economic recovery, let's keep it local
If we still rely on international supply chains for wind, solar and other projects, Australian jobs will be foregone.
From the World Bank and the International Energy Agency to Australia’s own Reserve Bank and a host of national industry bodies the message is clear: our path out of the great economic collapse triggered by Covid 19-must put renewable energy and a decarbonised society at its centre.
However, a business-as-usual approach to renewable energy development means Australia will still miss out on the full benefits of the decarbonisation of our economy. If we still rely on extended supply chains from international markets for the components needed for wind, solar and other projects, skilled and enduring Australian jobs will be foregone.
From components such as steel towers, nacelles and blades for wind turbines, transformers for electricity substations and the turbines and steel pipes for hydro-electric plants, so much of the material needed for the clean energy transition is still imported into Australia.
Steel towers and blades for wind turbines routinely arrive in Australian ports from Vietnam, China, India or Europe. Electrical transformers come in from Japan, and the hydrogen electrolysers needed to make this key export fuel of the future will arrive on our shores from the UK, Germany or the US.
It’s not as though the Australian economy is incapable of manufacturing many of these components. Australia’s single domestic wind tower fabrication business, Keppel Prince in Portland, Victoria, is oversubscribed with orders for Australian-made towers for projects in Victoria and elsewhere. In Wodonga, Wilson Transformer Company has scaled up its apprentice workforce to meet demand for electrical transformers for new solar farms and is now integrating them with solar power inverters in partnership with the major German company SMA to allow for more efficient deployment in new solar farm developments.
The Australian technology company Vast Solar develops concentrated solar thermal power plants capable of delivering dispatchable energy stored in a giant “thermal battery” to the grid. It is now exploring how the thousands of mirrors, steel towers and thermal storage required for its first commercial project can be manufactured or assembled locally.
The key to making this happen is to require local content as part of the renewables led recovery. Simply hoping for the trickle-down benefits of short-term construction jobs, while valuable, is not good enough. Instead we must also focus on deliberate mechanisms that require Australian made as a major part of a clean energy-led economic recovery.
This means requiring local content for the clean energy technology manufacture and assembly. Governments that are purchasing electricity supply from renewable energy generation should be specifying ambitious, proactive local content provisions as a qualifying requirement for their procurement. This could involve mandating Australian-made content in the manufacture of wind towers or in the steel racking for solar panel installations as well as locally made transformers, batteries or transmission cables.
This approach has been successfully adopted for the reverse auction programs conducted by the Victorian and ACT governments, which helped spur the expansion of traineeships and apprenticeships in component manufacturing businesses, and has seen the old Ford auto factory in Geelong recommissioned as a wind turbine nacelle assembly facility. Any future government-led renewable energy procurement should routinely require strong local component supply or assembly specifications for the clean energy projects they contract with.
Equally there is a growing role for the private sector. Through initiatives such as RE100 and the Business Renewables Centre, many large corporates are now purchasing 100% clean energy as part of their broader decarbonisation efforts. In doing so they too should mandate strong local manufacturing requirements as well as reward commitments for shared community benefits such as skills training, apprenticeships, landscape and biodiversity restoration investments. The evaluation processes for both private and public-sector clean energy procurements can do this through methodologies in their assessments that make enduring local jobs and local content a priority.
Across Australia the abundance of undeveloped solar and wind resources in the Renewable Energy Zones identified by the energy market operator gives us the potential for tens, if not hundreds, of gigawatts of new clean energy development. That is a pipeline for thousands of steel wind-turbine towers alone. If clean energy is to be the driver of our economic recovery, we must move away from overseas supply chains and ensure the decarbonisation of our economy creates enduring, skilled Australian jobs and ongoing benefits for communities.