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The renewable energy sector – A big deal for quarrying

Last month, federal politicians came to a bipartisan agreement to lower the Renewable Energy Target (RET).

The RET is designed to change Australia’s reliance on fossil fuel-powered electricity by embracing renewable, diverse energy sources, eg solar energy, wind power, bioenergy, hydropower, ocean energy and geothermal energy. Originally the RET was set at 41,000 gigawatt hours (GWh) of annual renewable energy production, ie 20 per cent of electricity would be derived from renewable sources by 2020.

However, the Federal Government last year reviewed the target due to falling electricity demand. After months of games, our pollies agreed to lower the target to 33,000GWh by 2020 to fully exempt trade-exposed industries and provide greater certainty for the renewable energy sector.

You may be asking what this news has to do with quarrying. On one hand, it’s a “win” because it means that Australian quarry products could be competitive against cement and aggregate imports. As CCAA CEO Ken Slattery told Quarry when the proposal to lower the RET was announced, no other country that imports or “has the potential to import cement into Australia [pays] this sort of cost around renewable energy. This creates a competitive problem where Australian cement products have a financial burden that imports don’t. If this legislation is passed, it will provide a more level playing field while also helping to avoid future increases in cost imports on domestically produced products”.

It’s uncertain if the revised RET will level the field, not just for construction materials but trade-exposed industries. I think not – it’s not solely the RET which makes us less competitive against cheaper imports, it’s labour and production costs. For example, it’s ludicrous that some bluestone products for pavings and gardens still lay idle in the ground because it’s more expensive to extract them than to import from the likes of China. The Chinese equivalent is not even necessarily good quality bluestone, as some stonemasons will attest, but when it’s cheaper than the local product, it’s no wonder they’re opting for it.

Which begs the question: Can the extractive industry be more competitive against cheaper, imported quarry products? Australia has a mature aggregates industry that produces most of its construction materials, while imported products are tiny – and may that long continue. But one day the pendulum may swing to the centre and the industry may have to prepare for a flood of imports. How will the industry maintain its domestic market share?

The answer lies in lowering costs so that domestic quarry products are as competitive as imports – and this means thinking about driving down production costs. That’s where the renewable energy sector comes in. It is predicted to grow to 2020, with 6500 new jobs to be created in up to 50 large scale wind and solar projects alone. Why shouldn’t the aggregates industry think about getting into bed with a new, growing industry?

The extractive industry’s traditional customers have been the mining, construction and primary industries. But with the boom winding down, quarrying needs to look elsewhere to increase business. The renewable energy sector could be the ticket. Just as quarries in the boom provided construction materials for roads and mine infrastructure, why can’t the same be done for renewable energy projects? Indeed, this issue, we report on how the wind-powered sector is proving to be a lucrative customer for a Swedish quarry operation. Further, Quarry has published many examples of quarries worldwide that have embraced renewable energy sources to power their operations and lower production costs.

It is not beyond us here – to assist the renewables sector and even participate in it.

So you may ask again, what has the RET to do with the aggregates industry? It represents an opportunity to diversify. It’s unlikely renewable energy will replace the mining and construction sectors as a major customer but it is unwise to dismiss it.


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