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Weld Australia demands answers: will the Australian Government manufacture wind and transmission towers locally or outsource to China?

Weld Australia calls upon the Australian Government to provide a clear and immediate public response regarding the manufacture of wind and transmission towers. Will wind and transmission towers be manufactured locally in Australia, or offshored to China? 

Comment from Geoff Crittenden    CEO, Weld Australia

The transition to renewable energy is paramount for Australia’s future, yet the foundational infrastructure for this transition-wind and transmission towers-remains neglected. Despite extensive lobbying and clear communication from industry leaders, the Australian Government has no concrete action or investment plan.”

For well over two years, industry leaders have been asking the Australian Government for a decisive plan to build these essential structures domestically. Instead, what we have received are vague promises and unspecified funding allocations. It’s time for the Australian Government to make a commitment: will these towers be built in Australia, or are we outsourcing this vital work to China?

Weld Australia commends the programs outlined in the 2024 Federal Budget, including an expansion of the Capacity Investment Scheme that will unlock over $65 billion worth of investment in renewables by 2030; and the much-anticipated Future Made in Australia Innovation Fund that will deliver $1.7 billion to power new ‘green’ industries.

The problem is: the federal government’s planned investments are earmarked for solar power, batteries and hydrogen projects. All these renewable energy technologies are long-term solutions that will come to fruition in 10 to 20 years’ time. We need a much more immediate solution. We need wind towers erected now. The Australian Government must stop prevaricating.

The Australian Government’s recent $1 billion investment in the Solar Sunshot program must be replicated in wind tower manufacturing. The domestic demand for wind towers over coming decades is huge-we need at least 6,000 wind towers nation-wide. Based on Australian Energy Market Operator (AEMO) scenarios, the market could range from $20 billion anywhere up to $80 billion.

The sheer scale of wind and transmission tower manufacturing in Australia will require significant investment in plant and equipment. This investment is not only about building infrastructure but also about creating jobs and ensuring the long-term sustainability of our manufacturing sector.

Timing and urgency

At least half of the remaining 14 coal generators on the eastern seaboard are set to close within the next decade. State governments are increasingly nervous that not enough new renewable energy generators, storage projects, and transmission lines are being built to keep power supplies and prices stable.

In mid-May, the New South Wales Government announced that it will pay Origin Energy up to $450 million over the next two years to extend the life of Australia’s largest coal-fired power station, Eraring, into 2027. This decision follows a 10-year forecast by AEMO that highlighted an increased risk of blackouts in NSW due to the slow rollout of renewable projects. The Victorian Government has already intervened to ensure two of its biggest coal generators do not shut prematurely.

Australia’s great energy transition – from fossil fuels to renewables – is not going well.

For example, Project EnergyConnect, a new 900km transmission line to allow for future connections from renewable energy sources is currently 12 months behind schedule. Similarly, commissioning of the Central West Orana Renewable Energy Zone Link in New South Wales has also been pushed out by 12 months-to August 2028.

Having met with the Australian coal fired power industry, all their engineers have contingency plans in place to extend the life of their plants. It is almost a foregone conclusion that the coal fired power plants will have to be maintained to ensure the delivery of consistent, reliable power to the Australian public-Australia’s renewables transition is nowhere near ready.

Weld Australia demands transparency from the Australian Government:

  • Will wind and transmission tower manufacturing be undertaken in Australia?
  • What are the concrete steps and timelines?
  • Who will be responsible for making these decisions?

This is not a state issue-states should not bear the responsibility for funding these large-scale industrial projects. It’s a national priority that should have been addressed well over two years ago. The Australian Government must take immediate action to start these projects and provide the necessary funding or-at the very least-the confidence for local manufacturers to invest in their facilities.

The rhetoric of green energy and renewable investments is meaningless without the real work and real jobs that come with building the necessary infrastructure. Industry needs tangible answers, a definitive delivery plan and real investment for wind towers-and we need them now.

The opportunity for manufacturers and fabricators

With the right policy levers, it’s conceivable to imagine significant investment in new world-class steel manufacturing businesses supplying both components and complete solutions to support Australia’s energy transition.

Within five years, at least one large-scale brand-new state-of-the-art window tower fabrication facility could easily be making 100 towers a year, and supplying them into projects across renewable energy zones. While there might still be a need to import towers during peak demand periods, our reliance on overseas manufacturing to achieve our targets would be greatly reduced.

In Eastern Australia alone, four facilities would be capable of manufacturing sufficient towers for 500 MW of power generation per annum – a total of 2GW. Each facility would occupy around 20 hectares of land, cost about $170 million, employ 180 full-time workers, consume 40kt of locally-made steel plate per annum, and require access to road and rail for incoming materials and outgoing completed towers.

Given the infrastructure and land required, and the social license issues relating to movement from heavily-populated port precincts particularly in NSW, all facilities could be located in regional areas, greatly boosting economic growth and employment in these areas. Due to the substantial cost of transporting tower sections by road, spreading facilities across the three Eastern states would be the most economical way to meet the needs of the market, while maximising and distributing the economic benefits.

The sovereign manufacturing capability would extend to other sectors, with new and existing fabricators potentially investing in capability to supply monopole transmission towers and componentry or complete system solutions for solar tracking. All of these investments would result in thousands of direct and indirect jobs.

For major steel manufacturers, the underpinning of a long-term sustainable market will enable them to continue realising their modernisation plans. This will mean multi-million dollar investments in sales and marketing to promote and sell Australian steel into the industry, ensuring a fit-for-purpose product suite. It could also stimulate further investment in product development and innovation to meet market needs, such as new chemistries, coatings or technologies.

At the same time, fabricators are hoping to not only see an increase in anchor cages, but a general boost to their day-to-day work. For example, a new Renewable Manufacturing Hub is in development in Western Sydney, with the opening target date of early 2027. Government spending could transform this facility into a powerhouse of capacity, with two of the fastest-cutting lasers in the world, Kinetic 5000 drilling machines with Oxy-cutting and drilling capabilities – all manned for 24 hours a day.

Towards a global renewable superpower

Beyond the benefits to the manufacturing sector, signals within the Future Made in Australia Act could accelerate our decarbonisation plans and support the shift to a circular economy that recycles end-of-life products. For example, it’s possible to imagine using renewable energy to mine Pilbara iron ore, which is then used in locally-milled steel, powered by wind and solar that is also made with recycled, locally-made steel.

A policy lever like this would almost certainly open the door to partnerships and investments that cannot be imagined in our current climate. But most significantly, it means Australians will benefit from cheaper, cleaner energy sooner.

The precedent has already been set in the United States, where there Biden Government signed into law a similar piece of legislation, The Inflation Reduction Act of 2022 (IRA). A key feature of the IRA is a domestic content bonus tax credit if a certain threshold percentage of iron and steel is originated and manufactured in the United States – encouraging domestic supply chains.

The IRA has already unleashed a green energy boom, driving more than $360 billion in private sector clean energy manufacturing and helping cut household electricity rates by as much as 9% by 2030.  Together with the CHIPS and Science Act, it is responsible for the creation of over 113,000 new jobs.

As in the US, there is a real opportunity to transform Australia into a renewable energy superpower. However, the latest government initiatives must be backed by measurable and enforceable local content procurement requirements, stipulating that 60% of all fabricated steel used in renewable energy projects is manufactured in Australia by local welders.

This will provide local manufacturers with the long-term security they need to invest in skills and equipment – and help realise Australia’s comparative advantage on the global stage as a producer of abundant renewable energy.

The renewable energy revolution is Australia’s chance to undo some of the damage done over the past 60 years – both to the environment and to the Australian manufacturing industry. But for government funding to achieve its full potential, it is imperative that local content procurement requirements are attached to both the Capacity Investment Scheme and the Future Made in Australia program.

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