Can Australia make its own wind turbine parts? Global giant suggests it might be at the whim of federal LNP

Australia must lock in bipartisan policy support for wind energy at the federal parliamentary level to have any hope of successfully establishing a local supply chain for manufacturing turbine parts, the CEO of global giant Vestas has warned.

In an interview with Renew Economy as part of the Danish royal visit to Australia, Vestas Group CEO Henrik Andersen said that any country wishing to set up local wind energy manufacturing needed to guarantee local demand “year in, year out” for at least 10 years. 

“We have factories in more than 15 countries and we have a very [well] developed supply chain, globally, which we can also source from. But it will always be better if the country has … that [sort of stable] demand every year.

“So how do we … agree to get two or three gigawatts on every year, and at that point in time [they] will facilitate that there’ll be further factories coming here, rather than it’s being manufactured around the world.”

Australia has not been renowned for its policy stability on renewables, with the level of support for the energy market’s transition to solar, wind and storage changing – sometimes dramatically – with each change of government.

Wind energy has been particularly vulnerable to political whims, both at a state and federal level.

And while there has been stable support for renewables at the federal level for nearly four years now, there are few signs that this would be carried over by a future Coalition government whose current leadership is, in fact, notable for its anti-wind leanings.

Federal Labor, meanwhile, just last month invited fresh input from businesses across the country interesting in establishing local wind tower manufacturing – something Australia has tried and failed to do in the past.

Last year, the nation’s last remaining domestic tower manufacturer, Keppel Prince, mothballed its remaining wind operations after finally losing a 15-year battle to compete with cheaper Chinese imports.

Andersen says Vestas, which is currently negotiating the possibility of establishing a wind turbine nacelle assembly plant in Japan, is “very keen” to support the Albanese government’s current renewables build-out, backed by the Capacity Investment Scheme and improvements to permitting.

But the history of Australian clean energy politics suggests these policies could just as easily evaporate with a change in government, leaving efforts to build supply chains stranded with sudden falling-off of demand.

“[It] is very important that it’s not a government anchor. It actually [needs to be] a parliament anchor,” he tells Renew Economy.

“Just like when [there are]… national [bipartisan] compromises on defence, I think if you want to build out home-grown energy, then do a national compromise so the whole Parliament agrees to it, and that will then also localise the manufacturing footprint.”

Vestas was all set to established a nacelle manufacturing plant in Australia nearly two decades ago, but dumped its plans when the then Howard Coalition government backflipped on its promise to expand the then tiny renewable energy target.

All of that said, Andersen is quick to note that Australia is “far from the worst country” in terms of unpredictable policy landscapes.

“You have many building blocks that are far better than rest of the world,” he says – not least of all, abundant renewable energy resources at a time when the value of energy independence is being cast in sharp relief.

“I think Australia has so many positive things in terms of resources, opportunities to handle your own [energy supply] situation,” Andersen says.

“[Renewables] can build energy that is competitive to the current market price everywhere in the world.  …And when the sources are homegrown, they are available.

“In [the case of] wind, if you decided today, you can have electricity generation in 18 months. And I know that very well, because … [of] Golden Plains [in Victoria], where we are building the largest onshore wind farm in the Southern Hemisphere.”

On offshore wind, Andersen says the case is less straightforward for Australia, where huge giga-scale projects can be accommodated onshore and the solar resource is so good.

“Clearly, when you sail something out 30-40 kilometers into the sea and you build cables back to the shore … part of that means it will be more expensive than solar and onshore wind,” he tells Renew Economy.

“But as an independent energy source, when we look 10, 20 and 30 years out into the future, I think we need it … I think [in] … every society, because it’s cheaper than building new gas, it’s cheaper than building nuclear; cheaper, definitely, than to … renew or reconstruct coal.

“Here, offshore wind is just a different asset type with a slightly higher levelised cost of energy. But it is still very optimal in comparing when you build new. …And as we all know, for those who live close to the water, the wind almost always has a even a very slight breeze… in coastal areas.

“So you have spaces where onshore is really, really optimal, but offshore you can … almost bank on it that it will be a constant 24/7 production from the offshore wind parks.

“So [it’s] another energy source that you’ve got to consider as optimal in combination – not [on its own] but in combination. That’s where we are becoming better and better in combining the different energy sources.”

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