Government Consultation on Domestic Wind Turbine Production
The Australian federal government is seeking feedback on the opportunities and challenges for domestic manufacturing of wind transmission towers. Currently, almost all of Australia's wind turbine infrastructure, including towers, rotors, and nacelles, is imported. The initiative supports Australia's goal of achieving 82 percent renewable electricity generation by 2030, with a significant impact expected on Victoria, a leading state in wind energy production.
Industry Pushes for Local Production Quotas
Industry representatives express a desire for policy changes that encourage local production. Steve Garner, CEO of Prince Engineering, a steel fabricator in Portland, has advocated for a domestic tower manufacturing industry for two decades. His company last produced a wind tower in 2020 and experienced layoffs in 2021 due to an inability to compete with cheaper, often subsidized, imported products, primarily from China.
Mr. Garner proposed that the federal government mandate a domestic quota, starting at 20 percent, for Australian-made wind farm infrastructure to provide certainty for manufacturers.
Geoff Crittenden, chief executive of Weld Australia, described the government consultation as a significant opportunity for the manufacturing sector. He stated that Australia will require approximately 10,000 kilometers of new transmission lines by 2050, as estimated by the Australian Energy Market Operator.
Crittenden highlighted that wind towers, composed of up to 90 percent steel by weight, are suitable for local manufacturing and warned against the loss of jobs, skills, and economic value if production is not localized.
Expert Warns of Economic Impact from Quotas
Bruce Mountain, director of the Victoria Energy Policy Centre, advised the federal government to proceed cautiously with domestic quotas. He explained that implementing quotas would either shift the financial burden to consumers or require taxpayer subsidies, likely a combination of both.
Mr. Mountain noted that developers have an incentive to source the most cost-effective production globally. He also suggested that Australia's labor markets contribute to higher installation costs for distribution and transmission networks compared to international standards.
Government Acknowledges Barriers and Opportunities
Federal Industry Minister Tim Ayres recognized several barriers to domestic wind farm infrastructure production, including global over-capacity in some markets, supply chain constraints, and a lack of certainty within the wind development and fabrication sector. Despite these challenges, Mr. Ayres characterized the consultation as an "enormous opportunity" to develop efficient, purpose-built Australian fabrication facilities. He indicated that the government would address barriers, including high labor costs, through a "disciplined and careful way" and expressed confidence in the competitiveness of Australian industry.
Federal Minister for Climate Change and Energy Chris Bowen did not specify whether the government was considering quotas for domestic production, stating that the consultation focuses on ensuring industry capacity.
Consultation Period Nearing End
The consultation period for feedback on domestic wind infrastructure production is scheduled to conclude in early March.