With the expansion of the Capacity Investment Scheme, Weld Australia is calling on the federal and state governments to legislate local content procurement policies. These policies must state that stipulate that 60% of all fabricated steel used in renewable energy projects is manufactured in Australia by local welders.
The Federal Government’s Capacity Investment Scheme presents a critical opportunity to bolster local economic participation in the renewable energy transition.
When it was first announced in December 2022, the Federal Government estimated that the Scheme would drive approximately $10 billion worth of investment in renewables. The Scheme was expanded in November 2023, with the aim of unlocking $40 billion in private investment, which would add another 32 GW of capacity to the National Electricity Market.
According to Geoff Crittenden (CEO, Weld Australia), “While the expansion of the Capacity Investment Scheme and billions in private investment are obviously welcome, it is essential that local and First Nations content requirements are incorporated into the Scheme’s tenders.”
“The Federal Government must commit to building sovereign manufacturing capability for renewable energy projects by legislating local content policy. Local content legislation must specify that 60% of all fabricated steel used in our renewable energy projects is manufactured in Australia by local welders. This local content legislation must be drafted in conjunction with industry to eliminate the loopholes that so often arise in these types of policies. The Federal Government must also mandate that all wind towers are constructed, erected and inspected according to Australian Standards.”
“This will fortify domestic clean energy supply chains, boost investor confidence, and cultivate a skilled workforce for the energy transition, positioning Australia as a global renewable energy leader. This will create a capacity mechanism that generates a clear, long-term signal for investment by private equity and local manufacturers.”
“Australian businesses have long advocated for specific, measurable local content requirements in government contracts. However, tangible examples of local content procurement policies are yet to materialise in Australia,” said Crittenden.
Local welding and manufacturing companies will then be assured of the security of sufficient orders to enable them to invest in the necessary workforce, plant and equipment to deliver high quality, cost effective renewable energy assets. With long-term demand a reality, local manufacturers—like Oxycut, Keppel Prince Engineering and Crisp Bros. & Hayward —will have the confidence to improve production efficiencies and global competitiveness.
Unless industry and governments come together now to formulate a plan of attack, when the time comes to manufacture the assets needed for our clean energy transition, there will be no fabrication facilities, no skilled workforce, and no regulatory frameworks in place. There will be no sovereign manufacturing capability. Specifying local welding companies in the Federal Government’s Capacity Investment Scheme tenders is imperative.