Those of us who grew up in the 1960s will recognise the unmistakable sound of the TARDIS taking off. Right now, it feels like we’re caught in a time warp, hurtling backwards at full speed. WELD COMMENT – Geoff Crittenden, CEO, Weld Australia.
We don’t need to look too far into the past for evidence of our regression.
In 2019, the Federal Government released Australia’s National Hydrogen Strategy. This put forth a vision of Australia as a hydrogen economy superpower. And yet major hydrogen projects have been cancelled. The Queensland government withdrew support for the $12.5 billion Central Queensland Hydrogen Project (CQ-H2) project, which aimed to produce more than 1 million tonnes of green hydrogen annually. BP shelved its Kwinana Green Fuels Project in Western Australia, citing high costs and technical challenges. Woodside Energy cancelled the H2Tas Project—a Tasmanian green hydrogen project, citing unfavourable market conditions.
The Western Plains Wind Farm in Tasmania, the Wooroora Station and Moonligh Range Wind Farms in Queensland, Corack East Wind Farm in Victoria, Barneys Reef Wind Farm in New South Wales, the Seadragon offshore wind project off the Gippsland coast, and an as-yet-unnamed offshore wind farm in the Illawarra have all been abandoned. Why? Repeated delays in planning and approval processes, opposition from local communities and fluctuating government policy.
In 2023, the UN Climate Change Conference in Glasgow (COP26) brought together 120 world leaders. Countries reaffirmed the Paris Agreement goal of limiting the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit it to 1.5°C. Countries agreed to a provision calling for a phase-down of coal power and a phase-out of “inefficient” fossil fuel subsidies.
As a result, the world was amazed at the number of fuel companies committing to sustainable green energy; BHP, Shell, Woodside and BP among them. However, global fuel companies are reducing their commitment to sustainable green energy.
Similarly, it’s a case of history repeating itself for the almost 22,000 people who call Whyalla home with administrators recently appointed at its steelworks for the second time. The Whyalla steelworks was losing $1.5 million a day before the South Australian government forced it into administration, with liabilities estimated to be $1.34 billion.
The steelworks reportedly only had 4,000 tonnes of coking coal available when the administrators took over on February 19, equivalent to three days of use of the blast furnace. Minimal repairs, maintenance, and capital expenditure have been performed over the last 18 months, creating safety concerns at the steelworks. Not even the traffic lights on the front gate are operating.
The last time that happened was in 2016 when the steelworks — at the time owned by Arrium — was placed into voluntary administration with debts of more than $4 billion.
Once again, the steelworks have been saved by the government and, once again, there is a discussion about which lucky investor might take the opportunity.
The next six months
As the TARDIS keeps whirring, pulling us further back in time, one thing is certain, the next six months could accelerate a backwards trajectory or propel us forward.
Prime minister Anthony Albanese recently announced a new initiative to strengthen Australia’s renewable energy manufacturing sector. This initiative includes ambitious local content requirements and a commitment of $500 million from the $1.7 billion Future Made in Australia Innovation Fund to focus on domestic manufacturing of wind turbines, which are being imported from China.
The announcement by Albanese is a win for our industry. While it lacks specific details, it lays a foundation for securing Australian jobs and ensuring that renewable energy projects are built with Australian steel by Australian welders – not unsafe, imported alternatives. It may help us turn back time and rebuild our once flourishing manufacturing industry.
Australia’s renewable energy transition will require somewhere between 6,000 and 10,000 wind towers, 78,000 transmission towers, and more than 25,000km of transmission lines. The opportunities presented by the sheer scale of work are huge, particularly for regional Australia. Enforceable local content policies will help create countless jobs in regional Australia. These policies will help the regional communities most likely to be impacted by a transition to renewable energy where coal-fired power stations and mines are currently the largest employers.
However, there is still a huge amount of legislation and various regulations that will need to be drafted to bring these policies to fruition.
The impossible tasks for Australia’s energy industry
With a Federal Election on the horizon, a change in government could see the energy industry tasked with the impossible.
The first impossible task: keep Australia’s ageing fleet of coal-fired power stations operating efficiently for the foreseeable future. According to the Climate Council, Under Peter Dutton’s plan, the first nuclear reactor is unlikely to be ready for at least 20 years, requiring 15 years for construction alone. This means that the first nuclear reactor would not be operational until at least 2045.
Many of Australia’s coal-fired power plants have already exceeded their design life two or three times over. It will be a magnificent feat of Australian engineering if these power stations reach their scheduled retirement dates, let alone operate beyond them until 2045 – even with extraordinary investment.
Weld Australia – through its Power Generation Industry Group (the members of which include all the major power generators) – is currently undertaking a project to develop technical guidelines for maintaining aging plants to extend design life as much as possible.
The idea that you can simply replace ageing components – boilers, generators, turbines – and keep these plants running indefinitely is a myth. Rebuilding and refurbishing takes years, comes at an enormous cost, and requires prolonged shutdowns. The reality is, Australia does not have the capacity, workforce, or infrastructure to make this happen.
The second impossible task: deliver seven nuclear reactors by 2035 (a full 10 years earlier than what experts like the Climate Council and CSIRO believe is feasible). The issues associated with nuclear power have been well publicised and are extraordinary. Just to name a few:
1. Australia is the driest continent in the world. Nuclear power plants require an infinite source of fresh water. Therefore, the only likely solution will be to build these nuclear reactors near the coast and start by building a desalination plant, powered off the nuclear reactor, thereby sucking a significant percentage of its output, adding to the cost of construction and power.
2. Nuclear reactors discharge water at a temperature of around 24 degrees. The thought of that warm outflow spilling into our local beaches isn’t exactly appealing to most Australians (particularly central coast Queenslanders who will see even more Great Barrier Reef bleaching).
3. The engineering complexity and lack of trained staff makes the task almost unthinkable.
4. We have to come up with a nuclear waste storage and reprocessing facility. I can’t see the states and Indigenous land councils queuing up for that honour.
5. Last but not least, the legislation in every state in Australia will need to be changed – getting the state, territory and federal governments to agree is likely to pose the largest challenge of all.
If securing community support for wind towers is a challenge, imagine the battle to convince locals to accept a nuclear reactor in their backyard.
For decades, affordable and reliable energy has been the backbone of Australia’s manufacturing industry, driving our aluminium production, steel mills, and heavy industry. Since World War II, cheap electricity has been a key factor in our economic growth. But as successive governments have offshored manufacturing, industrial demand for power has plummeted (offset by our growing population and increased residential power demand).
Australia’s manufacturing sector has been in decline for 40 years, with the sector’s share of GDP declining by nearly two-thirds since the late 1970s. As a result, Australia now has the lowest manufacturing share in the OECD. In the Harvard economic complexity rankings, Australia comes in at number 102 in the world, behind Bangladesh, Honduras and Uganda.
Despite this decline, manufacturing remains critical to our nation’s future – for multiple reasons. It significantly contributes to the nation’s GDP and exports, driving innovation and productivity growth across the economy. The sector provides more than 850,000 high-quality jobs and supports extensive supply chains, enhancing economic resilience and sovereign capabilities.
Manufacturing plays a crucial role in technological advancement, research, and development, positioning Australia as an innovation leader. It also contributes to environmental sustainability through local production standards and circular economy initiatives.
With its far-reaching economic linkages and strategic importance, a robust manufacturing sector is essential for Australia’s economic diversity, long-term prosperity, and ability to withstand global challenges.
The reality is, Australia now stands at a crossroads. We can invest in a future powered by sustainable, low-cost energy that rebuilds our manufacturing base and positions Australia as a global leader in advanced industry. Or we can continue the trend of outsourcing jobs, offshoring critical projects, and dragging our economy backwards.
We’ve already witnessed the devastation caused by the destruction of Australia’s car industry, a move that sent shockwaves through the manufacturing sector. At the same time, state governments continue to send infrastructure projects overseas, stripping Australian workers of opportunities.
The choice is clear: either Australia breaks away from the global chaos and moves forward with a dynamic, advanced manufacturing industry founded on low-cost sustainable energy – or we continue in reverse, heading back to 1925 in the TARDIS.