Supply chain delays
from China and the soaring cost of steel and other
materials are combining to slow the advance of renewable energy in Australia
and elsewhere, a leading insurer and industry groups say.
The cost of steel
for wind turbine blades had risen by 50% or more since the Covid pandemic’s
start, even before Russia’s invasion of Ukraine prompted a scramble to
accelerate the switch away from coal, oil and gas to clean energy alternatives,
according to GCube, a global insurer of renewables that has recently opened its
first Australian office in Sydney.
“You’ve almost got
the perfect storm right now,” Fraser McLachlan, GCube’s chief executive said.
“We’re seeing delays of six months at a minimum to get replacement parts and
things like that coming out of China, sometimes more.”
To order a blade for a
multi-megawatt sized turbine can now take as much as a year or longer, adding
to windfarm operators’ costs. Supply chain disruptions caused by the extended
lockdowns in China are also stalling supplies of solar panels, and may take
months to be resolved, McLachlan said.
Delays to new
projects or repairs to existing ones will not be welcome news for a power
sector that has already seen a more than doubling in wholesale prices in the year to March, with further
steep climbs since.
Wholesale
power prices in the National Electricity Market have continued to rise. pic.twitter.com/DjH0GGPdHX
— Peter Hannam (@p_hannam) May 23, 2022
The spike in power
prices – which is already pushing retail electricity bills higher – has been
triggered mostly by more costly gas, which often sets the market’s generation
price. Outages by coal-fired power plants also haven’t helped.
Renewables are
already supplying close to 30% of the electricity for eastern states, with the
incoming Albanese Labor government targeting as much as 80% by 2030. However,
delays in new projects or curbs to existing ones could hamper progress.
“Supply chains
have really broken down globally,” John Grimes, head of the Smart Energy Council,
said. Solar panels, inverters and batteries are among the products caught up,
and facing rising costs.