The city with the world’s largest coal export terminal may seem an unlikely place to start a renewable energy revolution.
But Newcastle’s historical dependence on coal, and the uncertain future it faces with the inevitable global transition to a low-carbon economy, is precisely why our search for new, future-proof models of industrial leadership must begin here.
Famous for its coal, Newcastle knows the power of mining and heavy industry to support good livelihoods and thriving communities. But it also knows the debilitating impacts of industrial decline and economic downturns, which the city has weathered since the 1900s.
The next downturn could come from a global shift away from coal – spurred by a rapid fall in the cost of wind and solar energy, as well as a growing awareness that phasing out fossil fuels is crucial to stopping dangerous climate change. It’s an inevitable transition, and we need to start preparing for a world without fossil fuels.
One promising alternative is to swap outdated fossil fuel-powered industrial processes with low-cost renewable electricity technologies.
As we have found in our Electrifying Industry report, being launched in Newcastle this week, using renewable energy and electrical technologies in manufacturing, instead of coal and gas, can make manufacturing cheaper and more efficient. The strategies outlined in the report could establish Australia as a global leader in the industries of the future, and make Newcastle a modern, successful, industrial hub once again.
From cooking a can of beans to melting 100 tonnes of steel, virtually every industrial manufacturing process needs heat.
Because Australia has traditionally had access to cheap coal and gas, these industrial processes have typically been powered by fossil fuels.
With gas prices marching irreversibly upwards, and even the traditionally conservative International Energy Agency confirming that coal is losing ground to wind and solar as the best energy source for the future, it’s never been a better time to look for alternatives to coal and gas boilers to power industrial heat processes.
Enter electricity. It’s a versatile form of energy that can be generated by renewable sources rather than fossil fuels, and, because there is no practical temperature limit to electrical heat, there’s virtually no industrial heat process it can’t handle.
Making this switch has many benefits. It can drastically reduce costs. Many Australian businesses are already paying 20 to 50 per cent less for electricity by switching to renewables.
With the price of gas continuing to rise, the electricity and renewables combination is also a surer bet cost-wise for business in the decade ahead.
Switching to electrical heating can also halve the energy required to produce many goods, while reducing costs and increasing production speed.
With almost one in five manufacturing jobs disappearing in the past 10 years, enhancing the sector’s efficiency and productivity would not only help halt the sector’s decline, it could boost job growth and position hubs like Newcastle as leaders as the move towards a zero carbon economy gains momentum.
Instead of fading away, local businesses could become global pioneers in new industries such as emissions-free steel, renewable hydrogen or zero-carbon energy intensive materials such as carbon fibre.
Electrifying all industrial processes will cut 6 to 8 per cent of national greenhouse gas emissions. Not only will this guard businesses against the increasing economic and legal risks of being a major polluter in a decarbonising economy, it is a crucial contribution to the fight against climate change.
As the bushfires that recently ravaged much of the Hunter and the drought that has plagued much of NSW attest, climate change is one the biggest threats to the health and well-being of Australians, and we need urgent solutions to the problem.
Another benefit of electrifying industry is that it can be done rapidly using commercialised technologies such as heat pumps, induction and microwaves. The transition is happening now, and, for Newcastle, the opportunities are ripe for the taking.
When it comes to renewable energy, the NSW government has already recognised the region’s potential, and in July launched a transmission strategy to connect three proposed renewable energy zones to the state’s electricity grid, with the Central West Energy Zone, around Dubbo, set to provide clean energy to Hunter.
The Electrifying Industry report shows how to make zero-carbon frozen meals, milk powder, bricks, plastic, glass and beer – as well as a vibrant industry in recycling some of these materials.
All it takes is strong leadership from key decision-makers in industry and government for these promised benefits to become a reality.
Just as it did in the World War II, Newcastle could again return to an industrial hub – this time, as part of an innovative, clean, green economy.
Now that’s a hot idea.
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