The Australian government is facing calls to mandate local content in the construction of offshore wind farms as the country prepares for a potential offshore wind energy boom.
Welding industry body Weld Australia called for the local content mandate following the introduction of last week’s federal Offshore Electricity Infrastructure Bill 2021, which will establish a framework for the construction, operation, maintenance and decommissioning of offshore electricity projects.
The bill could help clear the way for the construction of the 2.2-gigawatt Star of the South wind farm off the Gippsland coast in Victoria, which has been one of Australia's leading oil and gas producing regions for more than 50 years.
It also clears the way for the Marinus Link interconnector between Victoria and Tasmania, as well as several other offshore wind projects that have been waiting for the legislation to progress.
Call for local content
“The only way to ensure that these massive wind turbines meet Australian Standards for reliability, quality and safety is to award the fabrication contracts to local Australian companies,” Weld Australia chief executive Geoff Crittenden said.
“Local fabricators comply with internationally recognised Australian Standards and are certified by the relevant Australian authority.”
Crittenden noted the Star of the South and Marinus Link interconnector projects alone were worth A$10 billion (US$7.44 billion) combined and are expected to create roughly 10,000 jobs.
“A procurement policy that mandates local content would see that A$10 billion reinvested back into our economy. It would create thousands of jobs in regional areas like Gippsland, Gladstone and Newcastle — jobs that are absolutely essential to Australia’s post-Covid-19 recovery,” he added.
“The importance of our local manufacturing industry cannot be underestimated when it comes to Australia’s post-Covid recovery. Australia’s jobs-driven Covid-19 recovery must be manufacturing-led.
“Mandating local content in national infrastructure projects is the only way to ensure product quality and public safety, create new jobs and strengthen Australia’s economy.”
The Australian Manufacturing Workers' Union (AMWU) also backs the call for a local content mandate.
"Investment in offshore wind farms should come with a guarantee on local manufacturing jobs coupled with procurement policies that support Australian made," an AMWU spokesperson told Upstream, adding that the union had been informed local content mandates could add as little as 2% to the total cost of projects.
The spokesperson also highlighted that government failure to ensure local content mandates in the past on renewables projects had cost jobs.
"Dozens of workers at Keppel Prince, mainland Australia’s only wind turbine manufacturer, lost their jobs earlier this year, with many more put on the line, when the Morrison government failed to ensure Australian steel and local towers were part of a deal to build the wind farm that will supply Snowy Hydro 2.0," she said.
"Compare this to the Mortlake South Wind Farm, supported by the Victorian Renewable Energy Target, which has strong local content requirements, where all the steel towers were made using Australian steel and manufactured locally."
Unions back offshore renewables
The offshore energy legislation has also been welcomed by the Maritime Union of Australia (MUA) and Electrical Trades Union of Australia (ETU), which have advocated for the exploration of offshore renewables potential in Australian waters for more than two years.
“Our members have got the skills to build these projects, and we can’t wait to get started. We are pleased that the government has listened to some of our concerns and will ensure the harmonised WHS (Work Health & Safety) Act will apply to offshore renewables projects, and that maritime safety legislation will also apply to vessels working on offshore renewables projects at all times — unlike in the offshore oil and gas industry,” MUA national secretary Paddy Crumlin said.
“We will need to take a close look at this legislation to ensure that it includes a clear trigger and timeline for the assessment of Offshore Electricity Areas.
"The legislation must also allow for jobs and regional development to be included in licencing requirements and that renewable energy developments won’t face unfair decommissioning taxes that aren’t currently applied to oil and gas projects.”
Transitioning the workforce
ETU assistant national secretary Michael Wright added the new industry could help in transitioning workers and communities who are currently being impacted by the energy transition as the world moves away from fossil fuels.
He called on the government to maximise local jobs and economic benefits by ensuring a pipeline of projects is created through an offshore wind industry package, that he said should include investment in offshore wind port terminals and manufacturing hubs.
“An offshore wind research and development programme is needed, alongside measures for a just transition to support skilled workers in getting the additional qualifications they may need to transition to this new industry,” Wright stated.
“This government is pouring hundreds of millions into coal seam gas and fracking projects, gas pipelines and gas power plants even though their own regulator AEMO (Australian Energy Market Operator) continues to say that gas and coal use in Australia is in structural decline.
“Offshore wind can provide thousands of jobs in an industry that could be developed quickly, would reduce emissions and will be needed for decades to come.
"The government should instead be funding the development of offshore wind and the thousands of jobs this will create in around Newcastle, Gippsland, and regional ports around the country, including through expanded public ownership of new renewable energy projects.”
The MUA and ETU have also been working alongside the AMWU to fund research into the viability of offshore wind.
"We have established the Hunter Jobs Alliance to consider ways to lead the energy transition that will ultimately create opportunity," the AMWU spokesperson told Upstream.
"The federal government needs to commit that any approval for offshore energy will be dependent upon local content, local build and local jobs so that Australia can establish a foothold into these new and emerging industries and technologies."
Offshore wind superpower
Australian non-profit the Climate Council said last week Australia had the potential to become "an offshore wind superpower", with wind capacity that has been likened to the North Sea.
"There is enough wind potential, just off our shores, to power Australia’s electricity grid several times over," Climate Council spokesperson Madeline Taylor said.
“For the first time ever, AEMO’s latest Electricity Statement of Opportunities recently modelled Australia’s hydrogen superpower potential, and now it is time we did the same and modelled our potential as an Offshore Energy Superpower.
“This is our ticket to a reliable, affordable and clean energy future. Offshore wind coupled with other offshore renewable energy sources and storage can fill any reliability gaps and at the same time, lower our greenhouse gas emissions."
Climate Council economist Nicki Hutley added the new legislation was a first step in helping Australia make the most of its abundant wind and solar resources.
However, she added it needed to be accompanied by the right investment and policy support for renewable projects as well as an immediate end to fossil fuel expansion.