Australia

Australia

Manufacturers suffer pain of market slump

AUSTRALIA: Local manufacturers have fallen on lean times as wind projects stall across Australia due to a lack of demand.

In March, Australia's largest wind-turbine tower manufacturer, Keppel Prince, announced it was seeking up to 100 voluntary redundancies from the 450 staff at its Victoria plant.

RPG Australia, which has supplied more than 600 turbine towers since 2002, confirmed times were tough for tower manufacturers, but that jobs were secure at its Queensland and South Australia plants.

"It's been a bumpy ride," said Michael Dawson, renewable-energy business-development manager at RPG. "Manufacturers provide the bulk of jobs in Australia and we've got a hiatus in wind projects. After next month we have no tower orders at all."

The Clean Energy Council (CEC) remains optimistic about long-term employment prospects in the industry and knows of no other imminent job losses, although it says many companies are moving staff internally.

Waiting game

"The question is how long can they keep waiting," said CEC policy manager Russell Marsh. "There is currently no pipeline of projects."

Activity began to stall in mid 2009 due to an oversupply of renewable energy certificates under the national renewable energy target (RET) of 20% renewables by 2020. A government review of the target is due to start in the second half of 2012.

"We expect these RECs to wash out in the next 12-18 months, said Marsh. "The future is very bright with the carbon price and the RET. It's just about getting over the bumps in the road."

Carbon pricing begins nationally from July, and requires Australia's top 500 polluters to pay a fixed price of AUD23 ($24) a tonne for the first three years. Although carbon pricing does not directly aid wind, it is generally expected to level the playing field and benefit clean energy over time.

As part of the same package of reform, a $10 billion Clean Energy Finance Corporation worth AUD10 billion will provide financial backing to improve the risk profile of renewable projects, which may include wind.

The Climate Institute, which researches employment in the renewable-energy industry, stands by its predictions of 14,200 wind jobs by 2030, but warns this depends on support from all levels of government.

"Frankly, this is an intensely frustrating time," said CEO John Connor. "Governments in New South Wales and Victoria, in particular, are being extraordinary with the extra hurdles they're putting up for the wind industry, which have the potential to affect jobs, investment and profits."

Last year, the Victoria state government introduced the country's most restrictive planning laws for wind, giving residents the power of veto over turbines within two kilometres of their home. Victoria also has 'no go' zones for wind, affecting large tracts of the state. The New South Wales state government has drafted planning guidelines for wind farms that propose a two-kilometre trigger, but without the automatic right of veto for residents.

Keppel Prince hopes to re-instate lost positions next year, if the market improves to meet expected demand.

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