Renewable energy and the promise of jobs, regional regeneration and first nations opportunities

ABSTRACT

Carbon-exposed regions tied to the fossil-fuel industry have uncertain futures. The promise of regional regeneration and job stimulus through a transition to renewable energy has been presented by governments, environmental organisations and some unions as a viable solution to their dilemmas. In this paper, we critically evaluate the job generation and local development possibilities from two high profile renewable energy initiatives – offshore wind farms and hydrogen hubs. Our starting point is that the debate to date has tended to be very narrowly focused on ‘employment estimates for renewable versus fossil fuel industries’ without consideration of where these jobs will be located and the nature of these jobs. Adopting a case study method, we consider the development of offshore wind farms and hydrogen hubs in Australia and their location within global value chains (GVCs) and the temporal and spatial dimensions of work required for developing, operating and maintaining these emerging industries. We demonstrate how the low labour intensity of ongoing work in offshore wind and hydrogen hubs means that new jobs created are mostly in short bursts of temporary labour in project construction.

KEYWORDS:

• Renewable energy
• regional regeneration
• global value chains
• First Nations Peoples
• employment

Introduction

The world’s energy production systems are at a critical turning point with the need to take urgent action to reduce greenhouse gas emissions if climate catastrophe is to be avoided. The implications of this situation for regional economies and the livelihoods of workers connected to fossil-fuel industries are significant. In countries where fossil fuels are major sources of revenue and job creation, the transition away from fossil fuels has been particularly fraught with social and political tension and division often resulting in significant delays in climate action. Firms in the fossil fuel industry seek to delay becoming owners of ‘stranded assets’ while workers and communities look to hold onto these industries until new opportunities emerge. In Australia, where fossil-fuel resources are vast and lucrative and have long provided the source of the country’s electricity generation, the legacy of divisive ‘climate wars’ looms large over Australia’s political landscape (Crowley 2022). In recent years, however, a new narrative has emerged suggesting environmental improvements can also deliver substantial economic, employment and social benefits including to those regions historically dependent on fossil-fuels. The suggestion is that the ‘climate wars’ are now over and the transition to RE will deliver a more lasting and ecological and socially sustainable future for regions. In this paper, we begin by critically evaluate this emerging narrative and the assumptions underpinning it. We then consider the job generation and local development possibilities from two high profile RE initiatives – offshore wind farms and hydrogen hubs. We draw upon a political economy framework that includes global value chain (GVC) analysis to scrutinise the design, development and operation of these RE initiatives and the prospects of delivering jobs for regional areas and opportunities for First Nation Peoples. We argue that while RE projects do open up the prospect for new regional development opportunities, there is no significant reason to expect them to deliver the jobs bonanza or a more sustainable and inclusive regional development model beyond what has occurred in the past as neo-liberal market fundamental models continue to underpin RE developments. Government expectations that multinational corporations will drive the development and operation of these projects are likely to stimulate job growth overseas with limited ongoing jobs locally and a continuation of the unfortunate realities of boom and bust so common in these regions.

The promise of renewable energy

The economic and social consequences of necessary carbon-emissions reduction policies for carbon-exposed regions have been a focal point of considerable political concern and research over many years (ETUC 2016; Gibson 2022; Wright et al. 2022). Unions, environmental organisations and local communities have called for ‘justice transition’ policies to accompany energy transition so workers and communities could be better supported during the transition period and resistance to necessary environmental policy change minimised (Stevis et al. 2020). To further alleviate fears of job loss and community devastation, a number of reports emerged proclaiming that the ‘green’ economy would generate far more jobs than would be lost from the current carbon-emitting economy (ILO 2018; UNEP 2018). In some cases, unions commissioned the research making the case for ‘green’ job growth and actively promoted this narrative (ACTU 2022; ITUC 2017). For carbon-exposed regions, the ‘green economy’ jobs growth narrative was not particularly convincing with questions being raised about where these new jobs would be located, the level of jobs and skills transferability for workers in the fossil-fuel industry, and the quality of these new jobs in relation to their current jobs (e.g. remuneration, health and safety, job security) (Snell 2018). What is now emerging is a narrative about the RE transition which speaks more directly to regions and tackles some of these ‘local’ concerns. This new narrative has become particularly strong in Australia among some researchers and political leaders.

Australian economist, Ross Garnaut, who has been influential in shaping energy and carbon-emissions policy making over many years, has been one of the most prominent voices in Australia to espouse this new and growing conventional wisdom about RE’s opportunities for ‘transitioning’ regions. In Garnaut’s The Superpower Transformation (Garnaut 2022) he argues that new RE industries would disproportionately be in provincial and rural Australia, providing early growth of new forms of employment on a ‘transformative scale’.

‘Development of Australia’s [RE] Superpower opportunity will have its greatest positive impact on employment and incomes in rural and provincial Australia. Old industrial areas will have new leases of life. New industrial precincts will emerge in rural areas’. (xiv)

Susannah Powell, a contributor to Garnaut’s The Superpower Transformation, extends this argument by claiming advancements in Australia’s RE industry and critical minerals needed by this industry will lead to a ‘renaissance of rural and regional Australia’ (272). She argues:

‘The opportunities for competitive production of zero-emissions industrial products are disproportionately located in country Australia … Seizing these opportunities will lead to the renaissance of rural and regional Australia and to an expansion of employment, incomes and population far greater than in the days when Australia rode on the sheep’s back’. (272)

The narrative can also been found among ‘transition proposals’ being advocated by various think tanks and environmental organisations. Beyond Zero Emissions (BZE), a self-proclaimed ‘internationally recognised climate change think tank’ (2019, 1), for example, has produced several ‘transition plans’ for carbon-exposed communities as part of its Repowering Our Regions program that proclaims vast RE job opportunities for regions. In addition to ‘revitalising’ regions and creating new job opportunities, there are other promises being made to ‘transitioning’ regions and its community members. There is an assurance to workers in carbon-exposed regions that they will still be needed because many of the skills they have acquired are transferable to RE industries. Regions who have struggled for years to attract new investment will no longer have to worry as their competitive advantage (i.e. geographical location and assets (e.g. wind, sun, water, port facilities, energy transmission infrastructure and skilled workforce) will capture investor interests. For First Nations People who have been disadvantaged, overlooked or excluded from economic opportunities to be gained from the ‘fossil fuel’ economy there is also the promise that this time will be different. As Garnaut notes, ‘Indigenous Australians will have an enhanced role in Australia’s new economic geography’ (88) as many of these RE projects will occur on or near Indigenous custodial lands with significant socioeconomic, environmental and cultural implications for these communities. Associated with the energy ‘transition’ and regional renaissance narrative is a call that ‘First Nations people and communities must be involved in the decision-making, including about siting, design, and implementation, to ensure that projects proceed in ways that best reflect their priorities’ (Jotzo 2022, 218). In summary, the narrative surrounding the RE transition imagines the opportunity for realising a new eco-sustainable development model in which First Nations People and local communities will receive significant benefits. Before scruntinising the evidence for such a future for regional Australia, we present our theoretical approach to the investigation.

Theoretical considerations

Prior to presenting the theoretical lens we employ for our inquiry into this emerging narrative, we begin by outlining the dominant theoretical underpinnings associated with the narrative itself which is best described as an ecological modernisation position. Ecological modernisation emerged in the 1980s and maintains that environmental crisis can be resolved through technological and institutional innovations in which the state and market perform a facilitating role (Glynn et al. 2017). Environmental crisis is best dealt with by normalising the ‘crisis’ into existing frameworks of socio-economic institutions rather than contesting those institutions (Boland 1994; Christoff 1996). Ecological modernisation comes from a reformist position in the sense that it acknowledged that industrialisation and capitalism’s quest for accumulation and material growth have contributed to significant environmental problems but such problems are not considered intrinsic byproducts of either industrialisation or capitalism (Buttel 2000). It maintains that capitalism can be ‘greened’ through a combination of market-signals provided by market-oriented environmental policies, technological advances in RE, recycling, sustainable materials, design and products and enhanced consumer preferences for these products. Global private investment, both in terms of finance and productive capital, are considered critical to drive ‘innovation’ towards solving environmental crisis. These are the fundamental positions underpinning the RE regional revitalisation thesis. In an earlier work (Dean and Rainnie 2021), commenting on a number of employment focussed organisational responses to COVID, economic crisis and climate change, which argued that they all fell broadly in the ecological modernisation camp:

… plans from a range of actors – the ACTU, Beyond Zero Emissions, AlphaBeta and the Climate Council and Sydney Policy Lab – are built from a base of Ecological Modernisation that accepts the compatibility of economic growth with ecologically oriented industrial and social transformation. (Dean and Rainnie 2021, 18–19)

The merits and limitations of the ecological modernisation position have been debated extensively for the past three decades from many different disciplines and policy positions for which there is no space to review (see Buttel 2000). However, it is important to make the point that the ‘Jobs and Growth’ being promised to regional Australia out of the transition to RE relies principally on the private sector and market fundamentalism to deliver these outcomes. It is on the basis of these assumptions that we consider these proposals and claims.

Our starting point, however, for critically evaluating the notion that RE transitions present opportunities for a regional renaissance which is more ecologically sustainable and oriented to delivering job growth and opportunities for First Nations Peoples is through value theory. Value theory reveals that distributive and sustainable outcomes of RE are a product of how labour is likely to be organised in the energy transition. The propositions being put forward suggest no major alterations in the relations between capital and labour are required to deliver these environmental and social outcomes for regional Australia as it has the competitive advantages that investors in the ‘clean’ economy are searching for. Multinational capital in particular will be important to these outcomes. What is not questioned in this analysis is the relationship between capitalism and nature in the value process. As Somerville (2021) notes:

Nature, as constituted of matter and energy, comes to have an exchange value insofar as it enters into a capitalist production process – that is, a process in which labour is set to work with or on the constituents of nature to produce commodities whose value is realised through exchange (61)

Or as John Bellamy Foster (2022, 28) explains, fundamental to classical historical materialism:

… .is the notion that economic and environmental crises are two sides of a single coin associated with capitalism’s exploitation of labour, on the one side, and its expropriation of people and earth, on the other. Capitalism is not only an alienated economic regime, but also, as a precondition of this, an alienated ecological regime.

We draw upon these perspectives to develop an approach that can best be described as historical geographical materialism (Herod et al 2014), drawing specifically on David Harvey’s notion of the spatial fix. Pearse and Bryant (2021) are particularly insightful in their observations that:

Transition to renewable energy is a spatial reorganisation of capital and therefore of labour and other eco-social relations … … .Company strategies to secure surplus value shape how RE is spatially organized as value oscillates between moments of spatial fixity and motion. … .Understanding electricity capital’s dynamics of investment and devaluation provides important insights into debates over RE job numbers and working conditions in different regions and sectors. These can be conceptualised as struggles within the wage relation over the creation and distribution of value produced by RE labour. (3–5)

Further, RE transition and the value creation associated with it involve a spatial reorganisation of capital and labour, where already segmented workforces are faced with significant changes that may intensify inequalities and provide terrain for contestation. Attending to value relations allows us to interpret the structuring relations of exploitation and appropriation that drive disruptive outcomes for labour and a broader set of eco-social phenomena across households, landscapes and ecological and geochemical systems (Pearse and Bryant 2021, 7). Our approach to operationalising this theoretical lens begins with a critical engagement with recent advances in Labour Control Regimes (LCR) literature where labour control regimes, the environment and regional development are more fully integrated (Baglioni et al. 2022; Campling and Havice 2020). For Baglioni et al (2022), LCR analysis aims to theorise the intersections between workplaces and wider social institutions. It is put forward as a mediating category between the day-to-day labour process and general forms of domination under capitalism. There are three levels – macro LCR, local LCR and control within the labour process (Baglioni et al. 2022, 3) This represents a shift from a focus on work place to work place (Baglioni et al 2022, 10). Therefore, labour regimes are seen as a set of social relations and institutions that make workers and shape and construct exploitation at multiple scales and through different spheres across the global economy. Labour regimes are the invisible infrastructures that mobilise workers for factories, farms and offices and extend and intensify work. There are four interlinked moments in making of workers – reproduction, mobilisation, motivation and utilisation of workers. However, and crucially for our argument, it is vitally necessary to include ecology. Unfortunately, the relevance of social reproduction and ecology in the constitution of labour regimes has been largely overlooked. For Baglioni et al (2022), the environment has to be seen as integral to and constitutive of the relationships that make up contemporary capitalism. According to Marian Werner (2021), at a general level:

The organizational arrangements of networked firms, labour and the state come together (or not) to metabolize nature as capitalist value in the face of seminatural limits and opportunities.

These are critical points when thinking about the GVCs that make up the manufacturing, construction and operation of complex RE projects and where labour and nature is located along this GVC and appropriated. So, Baglioni et al (2022: 8) suggest, production networks form and re-form through institutional and spatial combinations of intensive and extensive appropriations of nature’s value. Specifically, the authors argue that there are four terrains of exploitation

• Production – exploitation takes many forms

• Circulation – distribution of means of production – but borders between production and circulation not easily defined

• Social reproduction – workers made before and beyond point of production – capitalism genders, racialises, and spatialises this disjuncture

• Ecology – the metabolism between human and extra-human nature – capitalism is a historically specific relation with the natural world that is no longer based on the reproduction of human and non-human life but instead on the valorisation of both.

Developing the idea of the spatial fix, the authors suggest that specific forms of labour regimes emerge, evolve, wane and re-emerge at different times and places, often in response to social struggle, and this evokes the need to consider how the four spheres considered above are mediated historically and socially in any given empirical reality. With specific reference to ecology, it is argued that labour regimes reflect, shape and emerge via the conditions patterns and speeds through which capitalism appropriates nature (i.e. the ways in which it transforms nature into value and/or uses nature to engender exploitation). In a more detailed argument, Campling and Havice (2020) reviewed the relevant literature in four thematic areas in GVC analysis- Environmental upgrading, Waste and post consumption, Materiality, and Culture and ecology. They argued that the thematic areas were rarely in conversation with each other. Developing their analysis, Campling & Havice suggest that GVCs not only describe the concrete processes and distributional outcomes of individual value chains but also the central logics and tendencies of capitalism more broadly – conceptualising a dialectical relationship between social processed and environmental impacts in which chains are part of the larger socio-ecological dynamics of capitalism. Our value approach, in other words, forces us to broaden our focus and ask additional questions. In addition to questioning the number of jobs that are likely to be created out of RE transitions, this approach asks us to consider where these jobs might be located, the quality of these jobs and who might acquire them. Furthermore, it poses the question to what degree is this transition reorganising relations between capital, labour and nature with more sustainable socio-ecological outcomes and how is organised labour positioned as political force to shape how these transitions unfold (Pearse and Bryant 2021).

We examine these questions by considering two major components of Australia’s Superpower Transformation of regional Australia: Hydrogen and Offshore Wind.

The case studies

Case studies provide the opportunity to conduct a more in-depth exploration of what RE projects might mean within specific regional contexts (Rashid et al. 2019). Hydrogen and offshore wind farm projects have been selected as the case studies for this research as they figure prominently in the regional regeneration narratives. Up to the present time, no offshore wind farms have been built in Australia, and only a couple of hydrogen pilot projects have been successfully completed. The case studies, therefore, rely on a range of empirical materials from multiple sources for the purposes of ensuring rigour, breadth, and depth to each study (Yin 2009). Research reports produced by the RE companies, government agencies, environmental organisations, unions and other non-governmental organisations were examined for purposes of triangulation and assessment of employment and regional development claims. Furthermore, research reports from other national contexts (i.e. the UK, Europe and the US) where hydrogen and offshore wind farm developments are more further advanced were also included as part of our case study analysis. These additional research reports assisted the researchers in better understanding the employment and regional development impacts of hydrogen and offshore wind projects elsewhere and how GVCs in these industries are emerging and likely to operate in relation to Australian RE projects and the types of labour control regimes we are likely to witness in this industry context into the future.

The promise of hydrogen: renewable energy industrial precincts (REIP)

The promise of hydrogen for revitalising regional Australia is built around the re-emergence of the concept of specialised industry ‘clusters’ and the theoretical assumptions underpinning this concept. Green hydrogen, it is suggested for example, represents the latest iteration of regional transition initiatives scripted by a diverse coalition of actors – state agencies, politicians, corporate executives, consultants, technical experts – promising investment, jobs and revitalisation of regional economies (Briggs et al. 2021). A report for the Australian Industry Energy Transitions Initiative (Climateworks Centre and Climate-KIC Australia 2022) argued that

The development of clustered industrial precincts presents an opportunity to leverage multi-user infrastructure and existing workforce skills. The deployment of a range of efforts at a precinct level, such as demand side response, sector coupling and integrated hydrogen systems to balance energy loads from renewables, can allow for more effective use of transmission, distribution and storage infrastructure as part of decarbonisation transformation … … Renewable Energy Zones (REZ) (or equivalent in WA) in proximity to industrial regions at the required scale for industrial decarbonisation are needed today to develop the energy systems of tomorrow.

Below Zero Emissions (nd) claim to have a plan to ‘make Australia a strong manufacturing nation again through the establishment of Renewable Energy Industry Precincts (REIPs) in our regions’. REIPs are clusters of manufacturers powered by 100% RE. They connect industrial centres with the abundant and competitive RE provided by Australia’s Hydrogen Hubs and Renewable Energy Zones (BZE nd). Initial studies of community responses to REZs in New South Wales were not overwhelmingly positive (Cass et al. 2022). While residents in the two REIPs investigated were generally supportive, many people had little understanding of what the REIP would mean for their community. Benefits for some could mean adversity for others. If the unevenness of economic benefits and harms are not distributed equally across communities, this can become a cause of dissatisfaction and conflict. Indigenous communities participated only at the level of consultation over Environmental Impact Statements (EIS). Clearly, there is a need for stronger processes of culturally appropriate consultation and inclusion if REIPs are to live up to the promises made to First Nations Peoples.

As Gibson (2022) has argued, green hydrogen is a chemical element, an industrial process, and a policy catchphrase ‘woven into and enacted through social, cultural, political, technoscientific, ecological and economic practices’. As the green hydrogen discourse gained pace throughout 2020, place-based strategies linked to ‘hub’, ’zone’ and ‘precinct’ metaphors further proliferated as an avenue for discursive transformation ahead of the material. A key element of Australia’s approach, according to COAG Energy Council (2019), will be to create hydrogen hubs:

These may be at ports, in cities, or in regional or remote areas, and will provide the industry with its springboard to scale. Hubs will make the development of infrastructure more cost-effective, promote efficiencies from economies of scale, foster innovation, and promote synergies from sector coupling. These will be complemented and enhanced by other early steps to use hydrogen in transport, industry and gas distribution networks, and integrate hydrogen technologies into our electricity systems in a way that enhances reliability.

It is claimed that an Australian hydrogen industry could generate thousands of jobs, many of them in regional areas. According to Ross Garnaut (2022), the physical prerequisites for cost-effective large-scale hydrogen production are straightforward; large-scale supply of low-cost RE; available land to build large arrays of electrolysers and energy supply to run them; and access to industrial ports or a geography that allows the building of large-scale ports. Areas of Australia that meet these conditions include the Pilbara, and coastal South West Australia, central Queensland and South Australia. Scale is key to becoming a globally competitive supplier. In its most optimistic (Hydrogen Superpower) scenario, RACE 2023 2022a argued that a peak of 237,000 workers would be needed in the 2040s, with the scenario requiring extra 31,000 workers in 2025 compared to 2023. The scenario assumes a strong growth in the hydrogen export industry.

State governments have become enthusiastic supporters of the new hydrogen economy and its job creating potential. The Queensland Hydrogen Industry Workforce Development Roadmap 2022–2032 claimed a new stream of opportunities for regional businesses, communities and workers. The Queensland Construction Skills Council estimated that an increase of up to 26,700 construction jobs would be needed in the state by 2050 (How 2022b). The Hunter Hydrogen Roadmap 2021–2040 envisaged a thriving hydrogen economy for the Hunter region in 2040 providing jobs for thousands of skilled workers. When in Opposition, the South Australian Labor Party’s Hydrogen Jobs Plan claimed it would secure up to 300 jobs in construction, at least 10,000 jobs in RE projects and more than 900 jobs in the hydrogen export industry. In Government, Labor claimed that its $593 million Hydrogen Jobs Plan would catalyse the creation of jobs in the supply chain industries (How 2022a). A report from the John Curtin Centre on the Victorian Hydrogen Industry claimed that a large skilled workforce would be required.

At the local level, it has been suggested that in regions like Gladstone in Qld, transition from the older industrial sectors to the new hydrogen electrolyser production facility may not be too problematic, in theory, as roles and skills required were very similar to many heavy industry production facilities in the region. The Queensland Hydrogen Industry Workforce Development Roadmap 2022–32 (p14) outlined the following skill demands:

• Core skills will appear consistently across the different stages and types of hydrogen projects, including plumbing, electrical work, process operations, and engineering.

• The engineers, technicians and specialists that have supported the growth of Queensland’s LNG industry have important skills that will be applicable to many hydrogen production and transport facilities, including skills in instrumentation and pipeline construction.

• Key skills for the hydrogen industry will also include project management, design and workplace safety. Many other roles in corporate and operational functions will also be needed by the industry, including financial analysis, human resources, and Environmental, Social and Governance (ESG) management and compliance.

• A strong foundational knowledge of safety requirements will be essential. Workers with existing skills will need to be upskilled to become familiar with the properties of hydrogen, handling processes, and the pressures at which it needs to be stored.

• Trainers, assessors, teachers, and academic staff will need to be familiar with hydrogen technologies and retain industry currency as the sector develops.

• Renewable hydrogen will require further ramping up of Queensland’s RE generation capacity, with an increase in demand for new and traditional energy skills and significant demand for construction workers.

It would appear that the Green Hydrogen hub, decarbonisation and massive power-grid upgrade will require a recognisable mix of trade, technical, engineering and support staff (Loftus 2022, see also RACE 2030 2022b). But how many, for how long, where and who will get them remain open questions.

Three major factors have currently emerged making it increasingly difficult to answer these questions. First, is the question of the sizeable investment needed for advancing these projects beyond the pilot stage. Australia’s Renewable Energy Agency boasts it has invested $55 million in 28 hydrogen projects, from early-stage research and development to early-stage trials and deployments (ARENA 2020) but it widely acknowledged billions of dollars will be needed to see successful Hydrogen Hubs that generate the jobs and regional benefits that have been touted. One of the most ambitious hydrogen projects is being led by Australia iron ore billionaire Andrew Forrest and his Fortescue Future Industries. Among various initiatives, Fortescue has joined a joint venture with the US-based Plug Power and is building an electrolyser factory in Gladstone that aims to deliver 2,000 MW of electrolysers a year, double the world’s current capacity. In early 2022, Fortescue also announced a potential $50 billion green hydrogen agreement with German energy giant E.ON to produce up to five million tonnes of green hydrogen by 2030 (Parkinson 2022). Whether this ‘potential’ investment materialises has yet to be seen but the German interest in the project is for exporting of hydrogen into Europe. In this scenario, the ‘spinoff’ benefits for revitalising domestic manufacturing in Australia around a ‘hydrogen hub’ will be severely constrained as Australia’s hydrogen becomes integrated into value chains located offshore. Whether hydrogen will be used locally or exported is the second major factor shaping the employment and regional revitalisation benefits to emerge from these hydrogen initiatives. If hydrogen becomes an export replacement for Australia’s LPG, the regional benefits are likely to mirror the LPG industry with limited local industry ‘clustering’. It is likely that international pricing of hydrogen will drive whether hydrogen value chain developments emerge locally in the forms of ‘hubs’ or become part of globally value chains where Australia continues its extractivist trajectory and simply provides the raw material (i.e. hydrogen). The third major factor that has emerged casting doubts on some of the more optimistic employment benefits of hydrogen developments has to do with developments in the US where the Biden Administration has been actively pursuing their own hydrogen agenda. One of the most significant developments has been the US passage of the Inflation Reduction Act which provides significant green hydrogen tax credits for companies developing hydrogen projects in the US. Investors in Australia’s hydrogen projects have raised significant concerns about this policy for the viability of proposed Australian hydrogen projects. For example, David Scaysbrook, co-founder of Quinbrook and one of Australia’s biggest RE investors, claims investor interest in Australian hydrogen projects changed overnight with the passage of the US Inflation Reduction Act:

‘the degree to which the hydrogen supply chain will be subsidised in the United States which will make it very, very difficult for Australia to compete with US exports … . At every step of the supply chain from the renewable power to the onshore manufacture of electrolysers through to the manufacturing of the actual hydrogen product and the degree to which that is subsidised – something north of $5 a kilo is just the end product subsidy – it will be devastating from a competitive perspective’. (cited in Peacock 2022)

We now turn to the promises and challenges for realising them in relation to offshore wind farm developments.

The promise of offshore wind for regional revitalisation

Offshore wind energy is emerging as a major component to Australia’s decarbonisation efforts. With exception of land-locked ACT, every state and territory is actively pursuing offshore wind RE options. The opportunity for Australia to develop offshore wind had been spoken about for years. With vast shorelines, ample offshore wind and the vast majority of the population living near the coast, it was presented as a ‘no brainer’ in clean energy transitions. Not only would it provide the opportunity to decarbonise but it would provide badly needed investment and job opportunities for regional areas. Up until very recently, however, these projects were hampered by a lack of institutional support including Federal Government legislation to regulate the development and licencing of such electricity infrastructure. The regulatory requirements were finally secured with the passage of the Offshore Electricity Infrastructure Act in 2021 and the Offshore Electricity Infrastructure Regulations in 2022. This provided the ability of the Federal Government to issue exploratory permits and licences for offshore wind developments in identified areas around Australia. These areas include:

• The Bass Strait region off Gippsland in Victoria

• The Pacific Ocean region off the Hunter in NSW

• The Pacific Ocean region off the Illawarra in NSW

• The Southern Ocean region off Portland in Victoria

• The Bass Strait region off Northern Tasmania

• The Indian Ocean region off Perth/Bunbury, WA

As of December 2022, only the Bass Strait region off the Gippsland Coast has been declared suitable for offshore wind development and where developers can apply for licences to construct and operate wind farms (Australian Government 2022).

Since the passage of the offshore wind farm legislation investor interest in offshore wind farm opportunities and efforts by Federal and State governments to woo them with public funding support have grown exponentially. Not dissimilar from the oil and gas industry, offshore wind is dominated by a handful of a major multinational corporations many of whom are actively considering opportunities in Australia. One of those companies is the Danish-based energy company Ørsted who announced in October 2022 that they had initiated development discussions with both the Commonwealth and Victoria Government on offshore wind development. In its media release, it presented the opportunities offshore wind would bring to regional communities:

Ørsted recognises Australia’s strong offshore wind potential. Backed by supportive policies and momentum for clean energy, we believe Australia has all the ingredients for a thriving offshore wind market. Local economic and regional development is at the heart of all Ørsted’s projects. We plan to engage closely with government, local communities and traditional owners to explore opportunities to deliver renewable energy solutions which supports local jobs and supply chains. (Orsted 2022)

Offshore wind projects are complex and typically involve multi-contracting led by a handful of multinational firms, mostly based in Europe, who specialise in offshore farm development (Afewerki and Steen 2022). Some of the key developers include E.On, Equinor, Orsted, RWE Renewables, ScottishPower, and Vattenfall. These developers have well-established supply chains and typically divide the work required into nine major contracts covering the key elements of offshore wind farm construction, operations and servicing. During the construction stage (where the majority of employment occurs) different contracts are awarded for supply and instal of foundations, supply and instal of towers, supply and instal and turbines, supply and instal of substations, array cable supply and instal, and export cable supply and instal. Consistent with the practices in the construction industry more generally, contractors who successfully secure a work package associated with a key task (e.g. turbine installation) engage in further sub-contracting of the work package. It is likely that large multinational firms specialising in offshore wind farms will capture the major work packages with the local regional firms provided opportunities through sub-contracting arrangements (e.g. painting of wind towers, onshore crane operations, etc.).

Currently, there are a number of Australian offshore wind projects being considered by potential investors. The approach of these investors is to hold ‘community consultations’ and talk up the opportunities for jobs and local business expansion. It is important to distinguish how the investors engage with regional communities versus the firms that will build and operate the offshore windfarms as they have distinctly different agendas as highlighted by Sweeney (2021). Witfield (2023) notes these investors range from ‘private investment funds, venture capital funds, private equity funds and subsidiaries of fossil fuel companies’ (1). Investors work to secure government approvals, conduct geological surveys and environmental assessments and obtain local community support and the ‘social license’ needed to advance these projects. There is no guarantee that the promises and good will made by investors to local communities concerning jobs and local business opportunities will be delivered by the offshore wind farm developers. As Sweeney explains in the case of the UK, for example, the job growth promised by governments and investors from offshore wind farm developments have not been delivered during the actual construction stage:

The United Kingdom’s offshore wind capacity has grown dramatically in recent years, but employment in the sector has actually declined. The 1,700 jobs in offshore wind today fall far short of the 28,000 jobs that were promised a decade ago … .Renewable companies have outsourced turbine manufacture to an Italian company and most of the 54 steel foundations are expected to be built in low-wage Indonesia and shipped to Scotland … Wages on foreign and U.K. registered ships carrying out survey work for offshore wind sites, cable laying, and activities are as low as $2.44 (roughly $4) per hour. (Sweeney 2021)

Offshore wind development projects off the coast of Gippsland, in eastern Victoria, are some of the country’s most advanced but have yet to advance to the construction stage. These include Star of the South (an $8.7 billion project that is expected to produce 2.2 GW), Seadragon (a $6 billion project that is expected to deliver 1.5 GW) and the Great Southern Offshore Wind Farm (a $4 billion project that is anticipated to deliver 1 GW). Star of the South is the most advanced among the three. Star of the South is currently being led by Copenhagen Infrastructure Partners Fund with the Australian construction industry superannuation fund CBUS owning a 10% stake. With the Victorian Government’s ambitious carbon emission reduction goal of reducing the state’s emission by 45–50% by 2030 it has been a strong supporter of Star of the South and has committed $19.5 million in funding towards pre-construction activities alone (Victoria Government 2021). The company has drawn praise from the local community for its level of engagement with high expectations for jobs and local business opportunities. The investors leading these consultations have setup a 21 member Community Advisory Group that includes representatives from local government, unions, environmental groups and individual community members. Traditional Land Owner representatives have also been included on a Technical Reference Group to advise on the project’s environmental assessments including Aboriginal Heritage Assessment and Cultural Heritage Management Plan. According to the Star of the South, Traditional Land Owners have also been consulted as part of the Procurement and Workforce Strategy (see starofthesouth.com.au). The investors of the Star of the South are also promoting the project to the local community as opening up ‘just transition’ opportunities for workers in neighbouring oil and gas fields and Victoria’s coal-fired power generation industry. Local unions are hoping this will be the case (VTHC 2020). What will happen in terms of jobs and local community benefits, including those for First Nations Peoples, will ultimately be determined in the development stage and the multinational firms which secure the contracts to build Australia’s emerging offshore wind farm industry. Without greater industrial planning on the part of government and local businesses, these leading firms are more likely to rely upon their existing supply chains than work to develop the capabilities locally. In this scenario, the job benefits are likely to be greater overseas, particularly in relation to the manufacturing of wind turbines, towers and other components, than in the region in which these energy assets are to be built and operated.

About eight times more jobs are created in manufacturing components for offshore wind than are created in the construction of projects (Briggs et al. 2021). Australia is not well positioned to capture these manufacturing opportunities. There are few firms in Australia manufacturing the key components which include wind towers, turbines, blades and tower foundations. For those few Australian firms that are manufacturing wind farm components, they are struggling to win contracts with the developers of wind farms. As noted by the ACTU, there are only two companies that produce wind towers in Australia (Keppel Prince Engineering in Portland, Victoria and Crisp Brothers & Hayward in Tasmania). These companies are comparatively small and not currently positioned to produce the wind towers to the size required for offshore wind projects. They have also struggled to compete with international providers of wind towers for onshore wind farms. When Danish-based MHI Vestas was awarded, the contract to develop the Ryan Corner Wind Farm in western Victoria it decided to import wind towers from a Taiwanese factory it had worked with in the past rather than purchase them from Keppel Prince which was located just 65 km from the location of the wind farm. According to an MHI Vestas spokesperson, the Portland-manufactured tower plates cost about 40% more than alternatives’ (Sakkal 2021). This was a controversial decision which angered the local community and unions and went against the promise of the Victorian Government’s statement a few years earlier that Keppel Prince ‘will create the next wave of jobs in the manufacturing, engineering and the operation of solar and wind farms’ (Sakkal 2021).

Ship building opportunities are the other areas where manufacturing opportunities emerge from offshore wind development projects. A range of specialist vessels are required for offshore wind projects including ocean foundation installation vessels, turbine installation and heavy lifting vessels, cable-laying vessels, service-operation vessels as well as general crew transfer vessels. The specialist vessels are not currently available in Australia, and it is unclear where they will come from. There is considerable speculation as to whether there are enough vessels globally to service the multitude of offshore wind projects that are planned across the globe. Australian unions are hoping this situation will contribute to a revitalisation of Australian shipbuilding to fill this gap (CFMMEU and ETU 2022). However, there is currently little evidence of forward planning by either government or shipbuilding firms to meet this future demand for ships.

Discussion & conclusion

At the beginning of this paper, we drew on Hines et al (2022) argument regarding Australian governments response to the ‘decarbonising imperative’. This involved state-capitalist, large-scale transformations in regional Australia promising lots of jobs. The hydrogen-driven REIZs and offshore wind farms fit precisely into this picture. These proposals represent the latest iteration of regional transition initiatives scripted by diverse coalitions of actors – state agencies, politicians, corporate executives, consultants, technical experts – promising investment, jobs and revitalisation of regional economies (Briggs 2022). Mazzucato’s (2013) mantra of the ‘entrepreneurial state’, is being seized upon as an alternative to the dominant neoliberal paradigm, but also embellished to become the ‘environmental state’ where regions can be revitalised and ‘transitioned’ in ways new ‘green’ jobs and new economic growth is generated. The opportunities for regions to secure significant jobs and business activity benefits from RE projects are predicted across a growing number of studies (e.g. ACTU 2022; AEMO 2022; Below Zero Emissions 2020; International Renewable Energy Agency 2022; RepuTex Energy 2021; World Wildlife Fund 2020).

However, the picture is complicated by the demands of a move to decarbonise the economy, and increasing reliance on RE. The Just Transition literature has been mostly predicated on the assumption that we are dealing with what have become known as ‘troubled regions’. These are geographically isolated regions and communities usually reliant on what are taken to be declining industries, particularly coal. Workers and their communities are seen to be in terminal decline, and a Just Transition is concerned with how this can be managed. This is no longer a universal truth. Even with relatively limited strategic goals for confronting climate change proposed by the Australian Labor Government, ‘Rewiring the Nation’ and associated developments in the REIZs enormous amounts of labour will be required. In many cases, the run down of coal-fired power stations and other heavy industries ‘releases’ precisely the people whose skills and expertise are in such demand in these emerging sectors. For areas like Gladstone, the problem is not trying to manage industrial decline but managing the implications of the next resources driven boom. Implications for housing, services and local community are dire and have been experienced in previous booms (e.g. LNG) but there was a failure to manage and control the boom and aftermath.

Drawing upon value theory, we can find little evidence that that relations between capital and labour or capital and nature will be significantly altered in these new ‘clean energy’ projects. Carbon-emissions may be reduced but the renewable energy facilities will continue to be driven by profit-motives and indeed the success of these projects in moving from planning and development to construction and operations stages depends on financial investors being satisfied with the ‘business-case’. A significant aspect of the business case will be evidence of strong future demand for energy consumption and pro-growth policies which ensure this demand. Return on investment and the opportunity to generate surplus value through these facilities will be non-negotiable requirements and governments who are under pressure to meet carbon-emissions reduction targets will need to create the policy environment to meet these investor expectations. In this regard, what is proposed is consistent with ecological modernisation agendas and supporting the GVCs which have become a feature of major renewable energy projects and decarbonisation efforts more generally.

How many jobs will actually emerge for local regions and local workers is dependent on a range of factors but are unlikely to be on the scale being predicted. Job projections are often based upon capturing jobs along the broad RE supply chain including the manufacturing of components (e.g. wind turbines and towers) which Australia is not currently well positioned to capture. The commitment of global renewable energy firms, who are likely to lead these projects, to local content and local training and job creation ambitions is not likely to be strong given their strategic use of GVCs for maximising surplus value. It is more likely that the job benefits will merge during construction and assembly of mostly imported components. Who will perform this work and how much of it will be located ‘in region’ is an open question. These are new industries and local businesses may struggle to meet the demands of the project developers. Likewise, if the requisite skills are not being developed ahead of these projects local workers may struggle to secure employment opportunities on these projects. Regional higher education and vocational education providers are notoriously not well funded and badly run down. Establishing a local eco-skills system fit for purpose to capture new RE opportunities will be crucial if project developer’s reliance on workers from outside the region (e.g. Fly-in-Fly out workers) is to be discouraged.

It is clear that the construction phase of most of these projects will firstly be of limited duration but will also require a far greater quantum of labour than the operational/maintenance phase. There will be huge demand for labour that will be geographically specific, often at the same time but in places quite separate from each other. In this situation, workers with in-demand specialist skills are likely to be well remunerated and will be able to secure ongoing work if prepared to relocate or become part of a Fly-in-Fly out workforce. The post-construction operational stage, particularly for offshore wind, is going to provide limited ongoing employment. Technological developments have produced modular systems that require (relatively) very few permanent skilled workers to maintain operations. The operations stage of hydrogen projects will certainly deliver a greater number of ongoing jobs but much will depend on whether hydrogen is oriented towards export or the development of local ‘hydrogen hubs’ that support heavy industry. Much of the investor interest appears to be for export rather than local industrial developments. In this regard, Australia’s hydrogen projects will have limited local economic and employment benefits much like other export- oriented resource industries.

The narratives of RE’s regional revitalisation potential also fail to appreciate the potential disruption these industries may generate for local communities and their possible opposition to them. While we have not explored this issue in this paper, it must be noted that the local community support for these projects cannot be guaranteed. Much has been made of potential community benefits in terms of jobs, investment, improved infrastructure and business activity not everyone is likely to be impressed by the disruptions and other challenges emerging from these projects (e.g. rising rental costs associated with an influx of construction workers into small towns, transmission lines built on regional properties, potential environmental impacts, altered landscapes and sea views, etc.). In what ways, First Nation Peoples will receive greater benefits from these developments than has occurred in relation to other developments that have occurred on their traditional lands remains to be seen. However, there are growing reasons for optimism with renewable energy investors joining in business agreements with Traditional Owners and Indigenous businesses across a number of major projects. Renewable energy developer Octopus Australia, for example, has worked to develop a co-ownership and revenue sharing arrangement with First Nations Groups in the Northern Territory as part of a large solar and battery storage project. The Larrakia and Jawoyn Indigenous communities involved in this partnership are located on land near the Darwin port which widely seen as critical to hydrogen exports which they are also seeking to become involved (Parkinson 2023b). In WA, a $3 billion solar-hydro green hydrogen project involving investment group Pollination and Traditional Land Owners is also seen as a ‘world -first’ renewable energy development involving First Nations Peoples. The project is to planned, created and managed by the Aboriginal Clean Energy partnership which according to one report will ‘allow for an integrated development process for heritage, native title, and environmental and engineering approvals’ (Parkinson 2023a). In WA’s Pilbara region, an agreement between Acer Australia and Yindjibarndi Aboriginal Corporation has been drawn up for a large wind, solar and battery project to provide ‘clean’ power for major users in the region. The agreement includes equity participation and preferred contracting arrangements for Yindjibarndi-owned businesses in addition to training employment opportunities. One media report heralded that ‘this ain’t a royalty payment’ arrangement like other resource-based projects involving Traditional Land Owners but one in which First Nations Peoples would have a significant stake in renewable energy projects (Vorrath 2023). These are positive signs. However, the true test of whether we are witnessing the beginning of new employment and business opportunities for First Nations Peoples in the renewable energy sector is likely to emerge in the construction and operational stages of these projects (in Gippland, Victoria see ABC 2021). While investors are doing their best to secure a ‘social license’ in the planning and development stage what is being promised to communities is likely to look very different in the construction and operation stages for reasons we have outlined. If economic benefits and harms are not distributed equally across communities, this can become a cause of dissatisfaction and conflict and may reinforce existing inequities. Indigenous communities, in particular, must be involved in genuine consultations over cultural heritage and Environmental Impact Statements (EIS) but also in emerging employment, workforce development and business opportunities and EIS review and monitoring processes.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Al Rainnie

Al Rainnie is an Adjunct professor at UniSA Business and Department of management Curtin University.

Darryn Snell

Darryn Snell is an Associate Professor in the School of Management and coordinator of the Work in Transition Research Group and co-coordinator the Skills, Training and Industry Research Network at RMIT University, Melbourne.