Renewable Energy Roadmap AMWU Submission, September
2015
Introduction
The Australian Manufacturing Workers’ Union welcomes the opportunity to make a
submission to the Victorian Renewable Energy Roadmap.
The Australian Manufacturing Workers’ Union (AMWU) represents approximately 30,000
members working across major sectors of the Victorian economy. AMWU members are
primarily based in manufacturing industries, in particular; metal, vehicle, and food
manufacturing, but also in the industries of mining, building and construction, printing
and graphic arts, repair and service and laboratory and technical services.
The AMWU has members working in industries on both perceived sides of the climate
change debate, such as coal mining, steel and aluminium production, on the one hand,
and the installation and commissioning of wind turbines and other clean energy on the
other. We also have members in research and development generally and in some
government agencies with a particular interest in climate change, such as the Antarctic
Division and the Bureau of Meteorology.
In our view, policy responses to climate change need to satisfy several criteria.
They need to be fundamentally equitable, they need to be efficient and lowest cost,
they need to include transitional assistance for the most vulnerable (both businesses
and individuals), they need to be grounded in the best scientific advice possible and
they need to be incorporated or at least able to be incorporated within broader policy
mechanisms to solve to climate change.
In addition, the AMWU sees climate change as an opportunity to re-invest in Australian
industry and technology as well as low carbon energy, which serve to diversify and
grow the economy and the manufacturing sector.
In the AMWU’s view, a broad based economy is crucial to the generation of wealth and
high living standards for all Australians, now and into the future. It enables the
economy to better withstand external shocks, it enables individuals to attain their full
potential by offering the largest possible variety of career options and crucially, it
maximises the growth potential of the economy by allowing the development, take up
and commercialisation of the largest possible set of new sources of growth.
A broad based economy includes a strong manufacturing sector by definition.
Manufacturing’s role is especially important in the maximisation of new growth and
productivity enhancing technologies and processes. Manufacturing contributes almost
25 per cent of all business investment in research and development in the economy,
even though it represents just over 7 per cent of all economic output.
However, the manufacturing industry has been under considerable pressure in recent
years and faces several challenges. The solutions to these challenges require the sector
to better innovate and better deploy the results of innovation and crucially increase
investment, particularly in efficient capital.
The climate change challenge, specifically the need to lower CO2 emission intensity
and thus improve energy efficiency in manufacturing, is closely related to the need to
increase productivity improving investment. For this reason, the AMWU sees the climate
change challenge as an opportunity rather than a barrier to a stronger manufacturing
sector.
The AMWU believes that a real policy solution to climate change is not only in the
country’s long-term interests, it is in the interests of AMWU members, the
manufacturing industry and the economy more broadly.
Renewable energy technology needs to be a part of a broad-based response to climate
change, along with policies that help the transition, especially of workers in fossil fuels
energy generation.
We call upon the Victorian Government to support the continuation and expansion of
the renewable energy technology industry, as part of a comprehensive whole-ofgovernment response to climate change. In addition, the AMWU submits that solar,
wind and wave energy should be one part of a suite of measures promoted to ensure a
comprehensive response to the needs of a carbon-constrained economy.
The Renewable Energy Roadmap
The Australian Manufacturing Workers Union welcomed the release of the Andrews
Government’s Renewable Energy Roadmap.
The AMWU is supportive of strong policies that are aimed at promoting renewable
energy technology, but they need to be accompanied by policies to help the transition
to renewables, especially of regions and workers in fossil fuels energy generation.
It is the view of the AMWU that the Renewable Energy Roadmap provides a starting
point for the transition to renewables. But to prevent the Victorian economy becoming
stunted or febrile, there needs to be specific policy devoted to transitioning affected
workers, industries and regions to renewables, and diversifying the Victorian economy
with the expansion of local renewable energy technology manufacturing through
mandated local content minimums.
What follows are the AMWU’s recommendations to the Victorian Government.
Mandated local content minimums and employment
requirements for the manufacturing of renewable energy
technologies
This is a huge opportunity for Victoria to build a strong renewable energy technology
industry that diversifies our economy and takes advantage of our resources,
manufacturing industry, and leadership in technology to create an industry that grows
jobs in services, manufacturing, design, construction and energy generation.
The people most vulnerable to the transition to renewables are blue-collar
metalworkers, who are also being affected by transitions of other industries such as
automotive manufacturing. Victoria has been particularly hard hit by the collapse of the
automotive industry and the demise of Alcoa. The steel manufacturing industry is in
jeopardy of collapse, and we risk losing the ability to supply locally manufactured steel.
We have two steel plants in Victoria, along with plants in New South Wales and South
Australia. The steel industry supports about 43,800 direct jobs and 100,000 indirect.
By mandating local content minimums for the manufacturing of renewables, we will see
enormous flow-on benefits to the Victorian steel industry and others.
Research by Sinclair Knight Merz shows a typical 50-megawatt wind farm creates 48
direct construction jobs and five on-going jobs for the life of the project (generally
around 30 years).
Keppel Prince Engineering in Portland has been a manufacturer of wind turbines since
2001. Until the Federal Government’s uncertainty around and reduction of the national
Renewable Energy Target, Keppel Prince employed 265 workers, of which 90 were in
employed in manufacturing wind turbine towers. With a pipeline of projects, there
would be an opportunity for domestic components manufacturing to increased and
expanded (e.g. fabricating turbine blades).
The fabrication of an average wind tower uses approximately 150 tonnes of steel. With
mandated local content minimums for steel and other resources, the jobs of hundreds
of workers at Keppel Prince in Portland would be salvaged, and hundreds of jobs
created that could transition metalworkers from the auto industry to the renewable
manufacturing industry.
It is essential that workers be transitioned into new jobs that make use of their skills,
are relevant to their industry or skills, and are in geographic locations that will transition
affected local economies and communities.
Mandatory local content minimums secure the future of workers at local manufacturers
such as Olex Cables in Tottenham and Lilydale, Wilsons Transformers in Glen Waverley
and Wodonga, and IXL Manufacturing in Geelong, and provides security and certainty
to investors in local renewable energy technology manufacturing.
The procurement of locally manufactured renewable
energy technology and supply
The AMWU welcomes the Andrews Government’s initiative to use Government energy
purchasing to support renewables (section 3.3). However we think this program can be
further expanded to ensure larger scale jobs growth throughout the state and assist with
the transition of blue-collar metalworkers and other manufacturing workers.
The AMWU recommend that the Government expand this initiative to procure
renewable energy that is supplied only through 50 per cent locally manufactured
technology. Mandating local content for the Government’s power supply will encourage
renewable energy technology manufacturers to acquire significant portions of their
resources from local manufacturers, which will lead to direct jobs growth and industry
security.
Additionally, given that Metro Trains was found to be the state’s second largest carbon
emitter, and the City of Melbourne claims that trams make up 10 per cent of the city’s
transport emissions, there is an enormous opportunity for large-scale renewable energy
projects to supply the Melbourne public transport system1. The AMWU recommends
that the Government require public transport contractors to use large-scale renewable
energy suppliers with minimum local content requirements and employment outcomes.
A specific plan to deliver employment to workers and
regions affected by the closure or restructuring of brown
1
http://www.theage.com.au/victoria/ageing-train-system-leads-to-soaring-power-costs-2014011230oov.html; http://www.theage.com.au/victoria/renewable-energy-group-bids-to-turn-melbournestrams-solar-20150517-gh3ime.html
coal energy generation
State Government intervention will be required to ensure that we have manufacturing,
construction, maintenance, and design jobs located in the regions most heavily affected
by the transition to renewable energy, especially the La Trobe Valley, Western Victoria
and the Geelong region.
Renewable energy jobs that are created through this Roadmap are not necessarily in
the regions most affected by the transition, or relevant to those workers’ skills. The
AMWU recommends that the Government create a specific plan to address these
shortcomings, to prevent these regions from suffering enormous economic hardship
and high unemployment.
Within this plan, there will need to be substantial intervention by the State Government
into regional economies to stimulate growth and diversify the local economies. The plan
will also require not only retraining opportunities, but also the direct translation of the
brown coal energy generation workforce into new industries. It will require the
implementation of state owned enterprises conducting economic activity or significant
economic interventions by the state through the private sector.
The development of state-owned enterprise to manufacture
renewable energy technology
The massive hollowing-out of the Victorian manufacturing base and energy challenges
we are facing provides an unprecedented opportunity and argument to create a stateowned enterprise to build renewable energy technology.
Large-scale renewable energy projects are more cost effective than small-scale
renewables, such as household solar.
We need renewable energy, but we also need renewables to be cost effective. The
AMWU recommends that the best way for the Victorian Government to expand
renewables is through large-scale projects, and a state-owned enterprise would provide
not only the Government with its own power (through technology that has been locally
manufactured), but could also provide the second biggest emitter (Metro Trains) with
its power, all while providing local manufacturing, design, service, and maintenance
jobs for Victorians.
An environmental plan for the rehabilitation of the open cut
mines
The eventual closure of the Hazelwood mine in the La Trobe Valley will present
enormous challenges to the region – economically, socially, and environmentally. The
AMWU recommends the Government create an environmental plan for the rehabilitation
of the open cut mines to ensure that the local regions are not left with hazardous and
wasted land. A substantial environmental plan should grow local jobs and stimulate the
local economy, whilst ensuring the long-term viability of the space.
Conclusion
The Australian Manufacturing Workers Union welcomes action by the Victorian
Government to combat climate change and our carbon emissions. It is encouraging to
see action being taken to undo the damage wrought by the previous State Liberal
Government and the Federal Liberal Government to climate policies and the renewable
energy sector. The AMWU most recently welcomed the Andrews Government’s reforms
to the wind farm planning laws that Matthew Guy had implemented, a policy that
directly influenced the loss of jobs at Keppel Prince in Portland.
However, the Victorian economy has hit a febrile state and will shortly worsen with the
impending closure of auto manufacturing around the country. A single renewable
energy plan will in no way bring about significant enough change to counter the
negative economic and social impact the closures will have. However it is a huge
opportunity for the Victorian economy to diversify, and for the Victorian Government to
institute policies that mandate local content minimums to secure Victorian jobs, and to
implement specific plans that minimise the impact of auto closures and the transition to
renewable energy.
The climate change challenge is an opportunity, rather than a barrier to a strong
manufacturing sector. We need the leadership and strong policy commitments from a
Victorian Labor Government to spur investment in the sector, to promote innovation
and deploy new technologies, and do so at negligible cost to the economy.