Scaling Australia’s clean energy supply chain – what needs to happen?

As Australia makes headway with its clean energy transition, pressure is mounting for the country to expand its own manufacturing capabilities. Geopolitical tensions, allegations of modern slavery, and a shift in global energy dynamics have added further pressure, sparking concern that we rely too heavily on overseas supply chains.

Simon Currie, Co-Founder of Energy Estate, says all the indicators point to the need to scale-up our domestic clean energy supply chain, rapidly. He believes this will be a major challenge, but one that should be fought for at all costs.

Before it can be achieved, five things must happen, he says.

#1 – Understand the scale of the market

“First and foremost, we need to understand the scale of the challenge and opportunity we are dealing with,” Simon told Informa Connect ahead of the Australian Clean Energy Supply Chain Conference.

“In order to become competitive in the global clean energy market, we will need a huge investment in skills, materials, facilities and infrastructure. The current manufacturing footprint will need to expanded many times over. Only when we realise the magnitude of what’s required can we collectively get into gear and make it happen.”

#2 – Believe it is possible

While this realisation could make many balk, Simon believes we should have faith.

“We need to feel the fear and do it anyway. We need to seize the opportunity that the post-covid era and commitment to rapidly achieving Net Zero has brought us.

“We must also learn from what our global peers are doing. If some countries can supply the whole world from a small number of sites and facilities, why can’t we as a whole nation?”

Simon says there are many reasons to believe that our efforts to build a viable clean energy supply chain will be successful.

“Firstly, we can offer an ethical supply chain. People are starting to care much more about this nowadays. No-one wants to buy blood diamonds or blood cement. We actually care and worry about the safety of people in all of our industries in Australia.

“Secondly, Australia has what it takes to attract talent from around the world – you can live in fabulous places like Newcastle with its beaches, the wineries of the Hunter Valley and help accelerate the manufacturing of world leading clean energy technology. People will want to move here with their families and be part of building the clean energy supply chain. We need to have confidence as to what we can offer to local and global talent.”

“Thirdly, we have a growing and really significant market which needs the product. Not only do we have coal-fired power stations to replace, we have the opportunity to export clean energy and onshore energy intensive industries.But to do all this we need solar panels and tracking systems, blades, towers and nacelles for wind turbines, inverters, transformers, all sorts of storage equipment and thousands and thousands of kilometres of cables.”

#3 – Learn from our mistakes

Despite this, we shouldn’t get complacent and forget lessons learned from previous manufacturing endeavours, he warned.

“The ups and downs of Australian manufacturing have shown us the very best and worst of what we are capable of. We have seen some wonderful ideas in wonderful locations that have failed due to poor execution. Some companies have failed to establish partnerships with the right global players or have not scaled quickly enough to be competitive.

“Until recently Governments and local corporates haven’t been using their buying power to drive local manufacturing outcomes and there still isn’t a strong enough local content mandate.

“Let’s all take a look at what has worked well in the past and what hasn’t and commit to sharing and learning from those lessons.”

#4 – Know who your friends are

Simon believes that the world is changing fast and that what used to be the standard approach to procurement is no longer acceptable.

“Buyers are looking for transparent and verifiable supply chains, and this applies to clean energy. Just because we are green doesn’t make us good!”
With this in mind, he is particularly excited about friend-shoring.

“The idea that we partner with major trading partners from around the world to build globally significant manufacturing capability here in Australia to service not just the domestic market but regional and global markets.

However, he cautions about slipping into a ‘State versus State’ approach.

“If each State wants to have its own plant manufacturing the same widgets then we won’t be competitive or sustainable.It will be much better if we focus on building scaled-up manufacturing sites so, say, your friends in Victoria supply the l-ion batteries for the nation and your friends in NSW supply the wind towers for the nation rather than each State trying to have its own “mega” facility.”

#5 – Bring the whole of the investment community with us

All of the promise of a clean manufacturing future won’t come to much without a rethink of how we invest, Simon said.

“The clean energy supply chain needs to engage with the broader investment community, like Scale Facilitation has done.

“We also need to be realistic about what a clean energy supply chain investment strategy looks like. Will every manufacturing opportunity you invest in be successful? Probably not. So I think you need to take a diversified approach across different technologies which will support different parts of the energy market.

“The clean energy thematic is so large – in my opinion no one is getting the maths right. People can’t fathom how much we need to manufacture to replace fossil fuels with clean energy we will make every day.”

Simon Currie is the Co-Founder and Chief Projects Officer of Energy Estate. Energy Estate’s mission is to accelerate the transformation of the energy sector and the decarbonisation of industry. We believe in the revitalisation of industrial communities with low-carbon solutions.

Hear more from Simon Currie at this year’s Australian Clean Energy Supply Chain Conference, hosted by Informa Connect. This year’s event will be held 15-16 June at the Radisson Blu Plaza Sydney.

Learn more and register here.