Australia enjoys a large landmass with an abundance of renewable energy resources and a low population relative to that landmass. We are the only developed nation to have access to such a large quantity of solar and wind power; we could generate many of our energy needs renewably by using just a very small proportion of our landmass. This means that we enjoy a considerable competitive advantage in the production of renewable energy.
Not only are we able to power an expanded manufacturing sector using renewables, but it is cheaper to do so than to continue down the path of an energy grid that favours and subsidises coal and gas. These economic advantages in turn can expedite a broader economic rebalancing, away from extraction towards production, in which value-added manufactures increasingly supplant the export of raw materials in our economic mix. This will be good for Australia’s economy—and for the world’s emissions.
This paper compiles evidence to demonstrate that Australia can achieve the continuation and resurgence of a vibrant, competitive manufacturing sector based on the even faster development of renewable power. To do this, the paper:
- reviews the strategic importance of, and opportunities presented by, manufacturing
- discusses Australia’s competitive advantage in renewable energy
- shows that, based on the government’s own figures, renewables are already cheaper than coal—and quickly getting cheaper
- debunks claims about the unreliability of renewables relative to more traditional energy sources
- identifies examples where renewable power is already in use, or could be put to use, in manufacturing and industrial processes, and instances where we can use our natural and manufactured inputs to add further value to these renewables
- examines international evidence showing that there is no connection between reliance on fossil fuels and success in global manufacturing trade
- presents a range of recommendations for government action to capitalise on the opportunity of renewable energy for revitalising Australian manufacturing.