Australia’s slice of the green pie

Global competition will test Labor’s green energy goals

Now that the dust has settled it’s looking like the ALP’s “Future Made in Australia” Act and the federal budget released ten days ago to match that vision may be unique in the world as it tussles with the reality of the energy transition. We are having a bit of a “bet both ways” in that we want to build batteries, do clean hydrogen production and make green steel here but we also are not investing enough to capture the manufacture of these products from our own resources fully. This is not autarky but interdependence.

So, has the Government gone far enough in a global context?

The fact is that China has lapped us, the US and Europe in the race for the lead in the critical technologies of photovoltaics, batteries, wind turbines and electric vehicles, which has prompted the old world players to initiate industrial strategies that look downright protectionist. The Aussie response seems to be less extreme than the tariffs slapped by Biden on all things “Chinese green tech” this month as we are trying to find that middle path to maintaining relations with the world’s major producer. Of course, that makes sense since Chinese industry gets much of their raw material from us.

Australia may move to make silicon on the continent in conjunction with Chinese interests and or other elements of the photovoltaic supply chain in an example of seeking a middle ground in the cold war that is hotting up. Given our longstanding intellectual property relations with Chinese PV manufacturers, through the likes of Dr Martin Green and the wonderful photovoltaic industry folk at the university of NSW, this may be a strong suit for Australia to play in the great game of energy politics for the 21st century.

Questions remain however: is it big enough to keep us at the table for a start? $22 billion sounds like a lot although it pales in comparison to what we spent on so-called defence from submarines that don’t exist! When you think about the trillions of dollars of value being created in the energy systems of the world, which are being built in terms of productive capacity this decade, then Aussie $22B doesn’t really lay the cornerstone of a renewable superpower.

Half a billion is intended for battery production, for example, which will barely begin the process of building one of the multiple giga-factories that we would need to compete in making batteries on the continent. But make batteries we must or else condemn ourselves to another century of quarry Australia, wherein we dig and ship raw materials getting 1% as we have thus far for the lithium demand driven by the electric vehicle revolution. This despite the fact that we produce half of the world’s raw lithium.

The reality is that what we saw in the May budget is probably only a down payment on what is needed to achieve Prime Minister Albanese’s vision and ensure Australia gets what is ours. So, will Canberra work out how to up the ante? Watch this space.

Danny Kennedy is the CEO of New Energy Nexus.

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