Govt blamed for wind turbine plant closure

www.abc.net.au/news
Friday, August 25, 2006

Vestas has blamed uncertainty over wind power in Australia for its decision to close its Wynyard turbine assembly plant in northern Tasmania. The Danish-owned company will leave the state at the end of the year but hopes a majority of its work force will stay in the wind power industry.

The Wynyard factory is designed to make two megawatt turbines but Vestas says the market is changing towards larger ones. Senior vice-president Johnny Hoy Henriksen says the company has failed to sell a single turbine in 2006, and there are no orders for next year. He says it is too costly to upgrade the factory for larger turbines.

Mr Henriksen says the Federal Government's decision not to raise renewable energy targets has left the future of wind power in Australia uncertain. The closure will almost certainly result in the shutdown of a component manufacturer in Burnie.

Oztec Composites, run by Rob and Jackie Gee, employs 25 people manufacturing the housing for rotor blades. "Rob and I have put a lot of years in getting the facility up and running to manufacture for Vestas," Ms Gee said. "On a personal front, it's quite cutting - I just can't even put words to it."

The Greens have used the closure to step up pressure on the Federal Government to review its renewable energy policies. Greens Senator Christine Milne says Vestas' future in Tasmania and the viability of Australia's renewable energy sector are in the Prime Minister's hands.

"If the Prime Minister agreed today that he was going to put a price on carbon, that he was going to introduce a cap-and-trade emissions scheme for the country or he was going to extend the mandatory renewable energy scheme, there would be great celebration in the renewable energy sector," she said. "And I've no doubt that Vestas would reconsider their position."

Australia's wind energy group is also lamenting the plant's closure. Australian Wind Energy Association chief executive Dominique La Fontaine says while the rest of the world expands its renewable energy capacity, Australia is contracting.

"The very disappointing thing is that Australia has got the best wind resources in the world and with the right policy framework, can have part of the expanding industry that's happening globally," she said.

"The fact is the market is very strong in China, in India, in the States, in Europe - unfortunately, everywhere else but Australia." She says it is all down to the Federal Government not maintaining its incentive scheme for renewable energy.

"The market for renewable energy is contracting in Australia because the policy mechanisms of the Federal Government implemented some time ago haven't kept pace with what's needed to grow the industry," she said.

The decision to close the plant has brought calls for a Beaconsfield-style compensation package from the Federal Government. Local Labor MP Steve Kons says the Commonwealth's refusal to maintain the Mandatory Renewable Energy Scheme, which provided incentives for the wind sector, is to blame.

He says Mr Howard should now step in. "I feel very concerned about the jobs of the 65 people and the Prime Minister certainly has to make a decision," he said. "In my belief, he has to put $10 million on the table to make sure that any economic loss the coast does suffer is certainly provided for by the Commonwealth."

But Mr Howard says economic factors, not the Government's renewable energy policy, are responsible for the closure of the operation. Speaking in Devonport, he has said it had nothing to do with the Government's decision not to increase incentives for renewable energy. He says Vestas is also closing a plant on the other side of the world.

"Simultaneously with the decision taken in relation to the operation here in northern Tasmania, another decision has been taken to close one of the company's other plants in Scotland, so it's hard to argue that this decision is one related to the Government's policies," he said.

"Companies expand or companies contract. No Government can guarantee the maintenance of the commercial operations of every single company in this country." Mr Howard says the Federal Government has been working with the wind turbine plant on what assistance it can provide to ensure future employment opportunities for its 65 employees. He says the Government will do all it can to ensure future employment for the factory's workers.

Federal Industry Minister Ian Macfarlane also says the Federal Government has given a lot of support to the company over the years. "Our Government has provided through the MRET Scheme some $5.5 billion to $6 billion in terms of assistance to the renewable energy sector," he said.

"And in particular with Vestas, have provided them with tax relief over the last two years of around $10 million to ensure they are able to be competitive with the turbines they do produce."

Meanwhile, Vestas local managing director Lee Whiteley says the cost of importing components from Europe has also been damaging. He hopes to start a new company using the existing work force and factory, and is negotiating with the State and Federal Governments for support.

Mr Whiteley says the business would be service-based. "We see a great opportunity to generate a new business, a more diverse business," he said. "We form key strategic alliances right across the globe and we think there's a an amazing opportunity for our employees to stay employed in this business."

He says the business would use some of the existing 65 workers. "The economic climate is such that we believe there are opportunities for companies with skilled employees," he said.

"Given the work skills shortage we have right across the country, we believe the building is an asset in attracting a variety of work and let's not forget there are some big projects on the horizon."