Australia's two wind tower producers have called for supply mandates to ensure Australian businesses do not lose out to cheaper overseas alternatives during procurement rounds for energy developments.
Key points:
- Australia's two wind tower builders want local supply agreements
- One business says its purpose-built factory is idle, despite the 19 onshore wind projects underway across Australia
- The Victorian government says requirements will be made
Keppel Prince is the only construction and fabrication company on the mainland with the capability to create onshore wind towers.
Its purpose-built production facility in the Victorian coastal town of Portland has been dormant since October 2020, when work from procurement rounds ran out.
General manager Dan McKinna said the company was kept busy with contracts for other industrial structures including infrastructure for metropolitan Melbourne.
But none of the orders are for wind towers which means the specialist facility that once required 150 staff to run is empty.
"My factory is currently idle," Mr McKinna said.
"All of those wind towers going up around Western Victoria, New South Wales and Queensland are coming in from Vietnam and China."
Mr McKinna said it was cheaper to source towers from Asia, where labour and supplies cost less.
No wind tower orders for Tassie company
According to Clean Energy Council data, there were 14 onshore wind projects with more than 1,200 turbines planned or under construction in early 2023.
Queensland and New South Wales both had six projects underway, and South Australia and Adelaide both had one.
Aside from Keppel Prince, the other Australian company that made onshore wind towers was Crisp Bros and Hayward in Tasmania, which had previously supplied local projects in the state.
Crisp Bros and Hayward managing director Steve Edmunds said his company also had no wind tower work on the books.
Mr Edmunds said he believed that was because it was cheaper for developers to buy towers from overseas than to ship the towers from Tasmania to projects underway in faraway parts of Australia, such as Queensland.
He also wanted to see local content provisions in place for wind farms, as well as all other types of work.
"We're talking to politicians all the time across a number of projects," he said.
Offshore wind 'huge' opportunity
Keppel Prince's factory was located close to the Southern Ocean offshore wind zone, where the federal government proposed to create a 5,100-square-kilometre wind energy area that stretched from Warrnambool in Victoria to Port MacDonnell in South Australia.
Mr McKinna said his company could only make land-based wind towers and no Australian company had the ability to build offshore towers.
If Australian companies like Keppel Prince were to invest in offshore wind tower production facilities, Mr McKinna said a guarantee of demand over an extended period of time was required to justify the investment, which could cost upwards of hundreds of millions of dollars.
"These projects need to be planned and executed with a long-term vision — not boom and bust," he said.
"This is a huge opportunity for the country, the question is what we are going to do to maximise this."
Union says certainty good for workers too
Australian Manufacturing Workers' Union state organiser Tony Hynds said local supply guarantees would be good for workers.
The union has previously lobbied state and federal governments about putting local procurement requirements in place, for both labour and materials.
Mr Hynds said the requirements would create certainty for businesses looking to invest, which would then lead to employment as a lack of certainty and the wrap-up of other work had impacts on workers.
"People leave and go to other employment, or they're made redundant because there is no work," he said.
A Victorian government spokesperson said in a statement it had set local content requirements for state-funded renewable energy projects through the Local Jobs First Policy.
Local Jobs First Policy gave small and medium-sized businesses in Victoria the opportunity to compete for government contracts and created more local jobs, according to the Local Jobs First government website.
The spokesperson said Keppel Prince had received work through the program.
"Keppel Prince have been contracted for some of these projects, and not others, as would be expected in a competitive process," they said.
The state government spokesperson said 59,000 local jobs would be created across the supply chain as it worked toward its target of 95 per cent renewable energy by 2035.
This included offshore wind zones and local content requirements for these projects would be set in the near future.
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