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The heat is on: why economic stimulus is needed to drive industry innovation

16 Dec 2020

Keywords
  • recycling
  • finance
  • cleantech innovation
  • climate change
  • emission trading scheme
  • energy
  • footprint
  • innovation

Originally produced content by Guardian Labs Australia to a brief agreed with and paid for by WWF.

 

Yes, we can stop burning fossil fuels, reduce carbon emissions and increase our energy productivity at the same time. Here’s how

 

The need to manufacture products locally to ensure Australian’s supply of essential goods has been reinforced by Covid-19.

 

Gil Scott-Heron said the revolution would not be televised. But Australia’s clean energy revolution is already underway. If you’ve missed it, it’s because it has only made the local news. They rarely lead national bulletins, but innovative corners of Australian industry have been rolling out low-carbon energy solutions for a decade. In Kojonup, Western Australia, Australia’s first biogas-powered piggery can process an Olympic-sized swimming pool’s worth of pig poo each month. In Dandenong, Victoria, a local tech company has been converting garbage trucks to 100% electric power for eight years. In southern New South Wales, thanks to on-site solar, a 60-year-old family orcharding company can process 48 tonnes of zero-emissions orange juice a day.

 

Boosting manufacturing through renewables

 

The next stage, experts say, is turbocharging Australian manufacturing through cheap, renewable heat energy – a cornerstone requirement of industry – on a macro scale.

 

Australian industry is the most energy inefficient in the developed world, which means our businesses are paying much more than they should for their energy needs, according to WWF’s public policy paper, Delivering economic stimulus through renewables.

 

The need to manufacture products locally to ensure Australia’s supply of essential goods has been reinforced by Covid-19. Yet only 7% of the Australian workforce is currently involved in manufacturing – about 729,000 people.

 

Manufacturing’s decline isn’t inevitable. Manufacturing industries make up 16% of the workforce in similar developed nations, such as Japan, Germany, and Switzerland, while other small-population countries, such as Sweden and Israel, are emerging powerhouses of advanced manufacturing.

 

Government cooperation is crucial to the success of domestic manufacturing in those countries. Astute policy that leverages Australia’s potential as the world’s clean energy superpower could do the same job here – slashing emissions and growing jobs.

 

“The fantastic thing is we have the technology and the expertise: there are already many solutions out there across all sectors – transport, agriculture, etc – and they are making a difference today,” says Jarrod Leak, CEO of the Australian Alliance for Energy Productivity.

 

“It doesn’t matter if you are drying fruit or pasteurising milk, clean energy solutions are available right now, which means we can stop burning fossil fuels, reduce carbon emissions and increase our energy productivity at the same time.”

 

Stimulus drives innovationSetting clear and ambitious policies will create the right context for change, which will raise the bar across industries and drive action, says Emma Peacock, Director of Sustainable Business and Communications at Unilever Australia.

 

“We need to work in collaboration with the government to stimulate the renewable sector,” she says. “If Australia doesn’t step up quickly, we’ll be left behind other countries who actually have far fewer renewable resources.”

 

While Unilever is headquartered in London, the British-Dutch multinational operates four factories in Australia - at Minto and North Rocks in NSW, Tatura in Victoria, and Toowoomba in Queensland.

 

“We switched to 100% renewable electricity to power all our Australian operations in January. This switch is not only good for the environment, but it also makes good business sense by reducing our energy costs and delivering certainty on future costs. It also gives our consumers reassurance that they are purchasing sustainably produced products.” says Peacock.

 

The next step for the Company will be looking at renewable alternatives for gas-driven manufacturing processes. “One of the core energy processes in our factories is a gas-fired steam boiler to create heat, says Peacock. “Which is important in manufacturing.”

 

Manufacturers like Unilever are looking for ways to meet their process heating needs without burning fossil fuels. Heat pumps – which draw heat energy from the ambient environment and can be powered by solar – or solar thermal water heaters are possible alternatives. However, they generally reach lower temperatures than a gas-fired boiler (about 120C for a solar-thermal water heater versus up to 160C for gas).

 

“But we took a step back and said, well, would that 120 degrees limit us? And actually, we found that with a few small exceptions, we could run our factory on that lower temperature.”

 

Innovation costs recovered

 

Similar results have been demonstrated in phase 1 of of heat processing feasibility case studies, across a wide range of local food and beverage manufacturers. At De Bortoli Wines, in Griffith, NSW, it is estimated that a $950,000 investment in heat pump technology would pay for itself in less than five years. In Adelaide, it’s estimated that a $3.4m investment at Lion’s West End Brewery would break even slightly faster. In Devonport, Tasmania, replacing an ageing gas boiler with heat pump technology and a biogas boiler at vegetable processor Simplot would cost an extra $400,000, but add $300,000 a year to profits.

 

“We have been able to look at government support in the past, and it’s really when that support moves from a 25% grant to a matched 50-50 that the business case can change in a really significant way,” Peacock says.

 

A $520m clean energy stimulus for modernising manufacturing – as outlined in WWF’s public policy paper – would unlock these opportunities and more, while creating 22,000 direct jobs, and delivering more than $1.4bn in wider industry benefits.

 

Leak says: “The next wave of tech development will reduce costs for business and industry, create jobs, stabilise the energy system and help the environment. How good is that?”

 

The clean energy revolution deserves its spot in prime time. This time around, nobody needs to fight the power – we just need to fight for it.

 

Find out more on how we can secure Australia’s future through a renewables led recovery to Covid-19.

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