US, Andrew Forrest warn on China energy threat
The US and Australia are vulnerable to China dominating the $US23 trillion global market for clean energy, the latest flashpoint amid deteriorating political and economic relations.
US Energy Secretary Jennifer Granholm has lashed China, warning it has “big footed” green technology and mineral supply chains that may imperil global energy security with billionaire Andrew ‘Twiggy’ Forrest backing a call to diversify away from Beijing.
Both the US and Australia were vulnerable to China dominating the $US23 trillion ($A34 trillion) global market for clean energy, the latest flashpoint amid deteriorating political and economic relations between Washington and Beijing.
“I worry that China has big footed a lot of the technology and supply chains that could end up making us vulnerable if we don’t develop our own supply chains,” Ms Granholm said on the sidelines of the Sydney Energy Forum.
“From an energy security point of view, it is imperative that nations that share the same values develop our own supply chains not just for the climate – which is very important – but for our own energy security.”
Anthony Albanese this week said Australia will not accept a set of new demands from Beijing framed as preconditions for the restoration of good bilateral relations with Canberra after the Chinese Foreign Ministry said there were four requirements for Australia to improve the relationship.
China accounts for 80 per cent of the solar supply chain globally which will grow to a 95 per cent share by 2025, according to the International Energy Agency.
Joe Biden invoked the Defense Production Act to lift production of lithium and other critical minerals for electric vehicles and Ms Granholm urged countries to diversify their supply chains away from China and Russia.
“We’ve seen what happens when you rely too much on one entity for a source of fuel and we don’t want that to happen here. We need to diversify those energy sources and link up with partners as part of our energy security.”
Energy Minister Chris Bowen backed Ms Granholm’s rhetoric.
“I agree with the secretary. It’s good for our own economies and it’s good for our national security. To have supply chains among ourselves, but also amongst friends and allies.”
One of Australia’s biggest exporters to China, Fortescue Metals Group, also called for the nation to diversify away from Beijing as it seeks to grab a foothold developing a major green economy.
Mr Forrest, chairman of the iron ore giant, said Australia should not be reliant on any one country for its manufacturing and green energy needs.
“China was able to revolutionise the manufacturing of solar panels and we all sat on our laurels and said okay we‘ll just get them from there,” Mr Forrest said on the sidelines of the Sydney Energy Forum.
“However, as the demand for green energy has literally multiplied 100 fold, it’s not practical to get these essential items like solar panels from only one nation. Australia really must step up and manufacture its own batteries, wind towers and panels and electrolysers. We can do that as Aussies and we’ve got to do it.”
China’s multi-decade demand for Australian iron ore has propelled Fortescue into a $52bn company, but Mr Forrest said when Australia needed to make its own products.
“I don’t think any country can hold Australia hostage because we’re the customer, the customer is gold and the customer is always right. We’re the country that can build huge power stations all from green molecules, all from the sun and the wind, and we’ll get our parts from whoever we please.”
“I’m grateful to have other nations there, but I don’t need government policy, I need Australians to embrace it.”
Australian solar energy pioneer, Martin Green, said there was merit in developing sovereign manufacturing capability but cautioned it would not be a straight forward exercise.
“Diversifying the manufacturing of solar is very important but it’s very challenging because the Chinese have dominated the market because they’re very good at doing what they’re doing,” Professor Green told the Forum. “They’re producing extremely high quality product very cheaply. So it’s very difficult for any manufacturer in another country to compete on either of those two terms.”
Australia on Tuesday joined an international partnership to develop and secure global supply chains for critical minerals for the global transition to clean energy.
The federal government said Australia had joined the Minerals Security Partnership, along with the US, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the UK and the European Commission.
Australia and the US also struck a formal partnership to develop and deploy zero emissions technology, with climate change to be a “centrepiece” of the alliance. Mr Bowen and Ms Granholm signed the United States Net Zero Acceleration Partnership at the Sydney Energy Forum on Tuesday.
Earlier, the IEA cautioned the global energy crisis will get worse with the upcoming European winter to be “very, very difficult” following Russia’s invasion of Ukraine.
“We are in the middle of the first global energy crisis,” IEA executive director Fatih Birol told the Forum.
“The world has never witnessed a major energy crisis in terms of its depth and its complexity. It is interwoven by many factors including geopolitics and I believe we may not have seen the worst of it yet.”
“This is affecting the entire world. This winter in Europe will be very, very difficult. Energy security, gas security, oil security will be immensely important for the world. We are feeling the impacts of the global energy crisis and the very high energy price around the world.”
“This is a major concern and it has serious implications for the global economy.”
The IEA chief repeated a message reported by The Australian that nations must accelerate a move to renewables and keep climate change commitments.
“I see many countries are seeing clean energy technologies as a response to the current crisis.”
