Regions are leading in the green energy transition

There is a global race going on right now. The goal: bring back jobs in the manufacturing and energy sectors as the energy transition accelerates.

In 2022, America launched its mammoth Inflation Reduction Act and the CHIPS and Science Act. Japan followed suit the same year, while the EU launched its own efforts in 2023, as did Canada. China, of course, came first and dominates the market for most clean energy products, from solar panels to wind turbines and batteries.

Now it’s Australia’s turn. Last week, Prime Minister Anthony Albanese announced plans to… Future Made in Australia law, speaking of the need to “break with old orthodoxies and use new levers to advance the national interest.” The goal here is to relocate manufacturing, leverage our strengths in solar and wind energy and crucial minerals, and create new industries.

Direct government financing of industries was previously often considered a thing of the past. But it is exactly what China has done, with great success. Now the world’s other major economies want to follow suit.

For Australia, efforts to reduce manufacturing and stimulate new industries must focus on supporting and stimulating regions. Critical minerals and often the best renewable resources have the great advantage of being located outside of cities. If they become reality, these plans offer a rare opportunity to turn our regions into sustainable economic powerhouses.

Strengthening the regions

Imagine a regional community with strong renewable resources. If a sustainable developer builds a wind farm on a farmer’s land, bringing in workers from the cities and materials from the port, this may benefit the developer and the farm, but provide little benefit to the wider community. But it can also be done differently. The developer could employ local people, and – if efforts to reduce production pay off – use locally made components where possible. Many renewable energy developers are already doing this.

Hence the proposal Future Made In Australia Act is a very real opportunity to achieve energy justice for our regions and rural communities.

Energy justice? It means making sure the energy transition works for communities and individuals, not just manufacturers and companies.

If the green transition is imposed on communities, rather than dealt with, this could easily ignite local opposition, as the recent Dyer Review on community engagement makes clear.

Most of our transition to green energy will take place in regional and rural communities within the Renewable Energy Zones chosen for their good renewable resources and access to transmission.

To ensure these communities actually benefit, Australia must co-design clean energy projects with rural communities, just as projects often do in the European Union. By co-designing projects, communities gain a sense of, and sometimes even literal, ownership of projects and are more likely to benefit from them. It is an important way to ensure that a project has sustainable social capacity within communities.

Queensland could be a pioneer here by legally defining the social license and requiring renewable energy developers to engage with communities.

Could the Australian-made really work?

Some have described the government’s plans as a “new protectionism”, proposing a return to high tariffs and products of questionable quality, supported by subsidies.

It is unlikely that we will compete directly with green energy giants like China. But Australia has existing advantages that we can take greater advantage of.

For example, we are already one of the largest users of solar energy per capita in the world, and our food exports are highly regarded. So why not combine them?

The agricultural sector – which combines solar panels with farming – is expected to be a $14.4 billion market by 2031. America, the EU, Germany, France and Italy all have policies aimed at boosting their agricultural sectors, supported by research, subsidies and tariffs.

Australia has world-leading expertise in solar photovoltaics, which we can leverage to create custom agrivoltaic solutions co-designed with farmers. These future agricultural systems could create a new export industry, with investment opportunities and possibly tax benefits brought about by the new legislation.

Our life science experts are also highly regarded. We could find ways to create industries derived from organizations like the Center for Synthetic Biology, which have found new ways to store carbon safely, or to convert biological waste into biofuels.

Agricultural waste streams can be converted into biofuels. Source: Shutterstock/crbellette

The timing is good: earlier this year the World Economic Forum called for better financing and development of these types of technologies. Like the agricultural voltaics sector, these types of inventions offer double benefits: CO2 emissions are reduced and agricultural productivity is increased.

If the Made in Australia plans become law, we would likely see funding flow into other forward-looking industries, such as CSIRO’s goal of ultra-cheap solar energy, the potential for green hydrogen to replace fossil gas exports, to the recently announced Solar Sunshot program, aimed at localizing more solar production.

We must leverage our comparative advantages

Many of the details in the Future Made in Australia law remains to be seen. But what is clear is that it presents a real opportunity for our regional and rural communities to lead the energy transition.

We could combine our renewable energy and vital mineral resources with our top researchers in energy, biotechnology and agriculture. And we can do this while strengthening the regional and rural communities that will support this transition.

Madeline Taylor is a senior lecturer at Macquarie University.

This article is republished from The conversation under a Creative Commons license. Read the original article.