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Towards Net Zero: Empowering Regional Communities

Regional Spotlight - Upper Spencer Gulf, SA

The transition to net zero is expected to result in a significant economic transformation of the Upper Spencer Gulf, with $20 billion in renewable energy projects in the pipeline for the local area, creating more than 20,000 jobs. 

Fast facts: 

  • Known as Australia’s ‘Iron Triangle’, due to the prominence of the iron ore industry locally
  • Provides a gateway to South Australia’s vast outback 
  • Hosts a number of significant port, rail and road networks, helping to connect Sydney, Perth, Adelaide and Darwin

Strategic initiatives for net zero transition

The Upper Spencer Gulf is in an excellent position to take full advantage of the renewable energy transition, having several natural and man-made advantages, including the legacy infrastructure from coal-fired power stations, ports, rail and road networks, and favourable geography for renewable energy production – particularly solar and wind.

Investment in renewable energy projects is currently underway in the Upper Spencer Gulf, including a $70 million partnership with the South Australian Government and the private sector for the Port Bonython Hydrogen Hub. Port Bonython was selected as it has an existing deep-water liquid hydrocarbon export terminal and over 2,000 hectares of developable land. The Office of Hydrogen Power South Australia is undertaking a master planning process working closely with local councils, TAFE SA, Traditional Owners, the wider community and other state government departments to establish a multi-user clean hydrogen industrial precinct, the supporting workforce and associated local housing and social services.

Separate to the Port Bonython Hydrogen Hub, the South Australian Government has committed more than $500 million to its Hydrogen Jobs Plan to build a world leading renewable hydrogen power plant, electrolyser and storage facility near Whyalla by early 2026.

A good transition

When asked ‘what makes a good transition’, participants unanimously responded with enhanced liveability and quality of life, through improvements in infrastructure and service accessibility. Participants noted that a necessary component of this process is fostering transparency, honesty and openness between stakeholders. This requires candid conversations about project parameters, acknowledging both knowns and unknowns and being realistic about associated costs, timelines, impacts and trade-offs. Participants hoped that such improvements would reverse population decline and lead to improved conditions for local businesses, creating further opportunities for locals. There is a widely held belief that the transition cannot be facilitated without government support; subsequently, there is a desire for a proactive and capable local government that is adequately resourced to meet the needs of the community for current and future generations.

Context

The Upper Spencer Gulf has experienced a boom-and-bust economic cycle for decades with the industries of shipbuilding, steel manufacturing and mining experiencing significant ups and downs in the region. Many sub-regions in the area have experienced population decline, business closures and cyclical mining activities that provide incentives too strong for local businesses to match. In Port Augusta, participants expressed a strong sense of community loss and pain associated with the closure of the power station and its ongoing economic and social impact. As a multi-generational employer and a major contributor to regional identity, the participants interviewed felt that the importance of the power station to the community was not respected nor appreciated by the government. Following the closure, the Port Augusta City Council experienced a reduction in income from rates, impacting its budget for local infrastructure and services. 

In recent years, numerous projects for the region have been publicised, leading to announcement fatigue and scepticism about state and federal government claims regarding the region’s economic transition. Many research participants felt neglected by the state, citing a lack of government presence in the regions (in terms of shopfronts and satellite offices) and collaboration that is non-genuine.

Drivers

State and federal government investment, often in conjunction with large (multi-national) companies, is a key driver of net zero activities in the region. International corporations are attracted to the region’s favourable attributes, including abundant wind and solar resources, a robust industrial base and strategic infrastructure. 

While it was noted that there was eagerness amongst the broader community to embrace the net zero transition, participants believed that much of the eagerness was primarily based on financial considerations, such as the significant pipeline of renewable energy projects. 

There was a strong desire to ‘grow your own workforce’ throughout the region to capitalise on the opportunities brought about by largely external investment in the region. There are different stages of transition evident throughout the sub-regions, but all aspire to cultivate local talent and have a strong focus on liveability improvements. 

Participants noted that ‘development was being done to them, rather than with them’, citing a lack of community involvement and superficial consultation from industry proponents and state and federal governments.

Development

Like most regions, entrepreneurship in the Upper Spencer Gulf is facilitated by a mixture of internal and external actors, with the state and external investors the primary drivers of the large-scale projects. There are many successful local entrepreneurial ventures in the region, including Sundrop Farms and the Hallet Group’s Green Hydrogen project. 

Despite the region’s strong industry base and transferable skills, there is concern about the sheer volume of renewable energy projects in the pipeline. It was noted that a collaborative region-wide approach to planning the sequencing of projects would improve both project outcomes, in terms of workforce and materials availability, as well as housing constraints and liveability concerns for the communities. 

Industry groups within the Upper Spencer Gulf are calling upon the government, particularly state government, to provide the necessary infrastructure to enable private businesses to capitalise on net zero opportunities – typically the construction of roads and power transmission infrastructure.

Partnerships

The Upper Spencer Gulf has witnessed significant changes in regional collaboration over time, including the emergence of broader, more inclusive initiatives as well as long-standing, more focused structures. The Upper Spencer Gulf Workforce Summit in August 2023, which brought together stakeholders to map regional opportunities, is an example of the current trend of broad, inclusive collaboration. This marked the first large-scale mapping of opportunities and recognised that a focal point for coordination is needed. The event emphasised to participants the need for cross-sector collaboration, the development of shared objectives and a coordinated regional response. 

While regional collaboration groups are developing, challenges remain in aligning governance structures and securing meaningful engagement from state government. Participants noted the proliferation of committees and plans by the state which are often ‘disconnected from the realities on the ground’ and lack substantive local engagement. There was strong criticism of the absence of key government agencies in the region, noting that a lack of physical presence further compounds these challenges, with critical policy and decision-making processes centralised in Adelaide. 

Increasingly, participants in the Upper Spencer Gulf region recognised that state technical expertise complements local knowledge, indicating a slow but evolving partnership. An increasing number of small collaboration groups are focusing on various topics, leading to calls for coordinating regional efforts into one, larger, more inclusive group.

Success factors

It was observed that formal mechanisms for learning and sharing insights across regions and collaboration groups are nascent. This lack of robust monitoring and evaluation frameworks is making it difficult for the region to track progress and learn from past experiences, and it also hinders evidence-based decision making. 

Throughout the Upper Spencer Gulf, there is a strong desire for collaboration, with meaningful action occurring on several fronts. Initiatives such as Spencer Gulf Cities, recent workforce summits, RDAs, and TACTIC (a member-driven organisation that connects local supplier capability in the Upper Spencer Gulf to major project proponents) play important roles in regional planning and bringing voices together – noting however, they all face resource constraints. It was noted by participants that there is a large number and variety of regional collaboration groups that may have overlapping interests, which may lead to efforts being duplicated. Attempts to address these challenges have often resulted in the creation of additional taskforces, in contrast to some stakeholders’ preference for more collaborative and transparent methods.

Capabilities

Local governments are facing a variety of constraints which hamper efforts to effectively transition to net zero, including financial resources, and personnel and technical expertise, particularly regarding net zero. In some instances, historical events still weigh heavily on the contemporary landscape. For example, the closure of a coal-fired power station resulted in a financial shortfall for the city council which continues today. 

Spencer Gulf Cities was noted as being an effective mechanism for promoting regional collaboration and providing a conduit for the region to consult with the state government. The mayors and CEOs of Upper Spencer Gulf local councils including Whyalla, Port Pirie and Port Augusta meet every quarter with the Minister for Local Government, the Chief Executive of Premier and Cabinet, other key ministers and senior government officials. However, the Spencer Gulf Cities group was criticised by some participants for being too ‘closed door’, particularly with its membership composition. 

The TACTIC organisation was also commended by interview participants, particularly for its business-oriented approach to connecting buyers with suppliers and improving local capacity. Despite recent downturns, the business sector in the Upper Spencer Gulf region retains strong potential, with a broad industry base and access to skilled workers, particularly in manufacturing.

Future steps

In the Upper Spencer Gulf region, most of the net zero-focused projects remain in the planning and feasibility stages, with only a few projects having broken ground. As expected, being in the early phases of project development makes forecasting challenging and consequently few downstream implications appear to have been mapped out. 

Recent community planning processes undertaken by Whyalla City Council provide an excellent example of cultivating an environment of engagement and accountability by promoting open dialogue and transparency. Momentum is building from community-driven planning exercises marked by high engagement rates across all demographics and sectors of the community. 

A possible similar transition is underway in Port Pirie, with plans contingent on forthcoming council discussions regarding its role and strategies to attract investment and create sustainable jobs. It was noted that there is a low level of collaboration with a major employer, an important part of the city’s identity. Given the magnitude and far-reaching impacts of this business’ operations, participants noted that greater transparency and meaningful collaboration with the community would benefit efforts to improve regional liveability. 

The local government representatives interviewed stated they are currently considering what their exact role needs to be in the net zero transition. Council representatives stated that local governments are facing capacity constraints, and individual contributions may be limited. Given the resources and access to decision makers, initiatives such as Spencer Gulf Cities was seen as the most appropriate mechanism to consider coordination efforts and complex planning for net zero.

Population and liveability

Liveability and population decreases were amongst the highest concerns for participants in the Upper Spencer Gulf. Significant concerns were expressed around childcare shortages, housing shortages, and infrastructure deficiencies. Participants noted the loss of a political seat in state parliament due to population decline and the impacts that may have on the region’s ability to access services. 

Whyalla City Council is making well-received improvements to liveability by focusing on tourism and heritage initiatives. The Port Pirie and Port Augusta councils face steeper challenges, particularly with overcoming negative stereotypes and public perceptions. All three regions are concentrating on liveability (including local infrastructure, social services, amenity improvements) to permanently retain a portion of the temporary workforce from net zero associated projects. Participants noted that shortages in housing, childcare and services will also need to be overcome to improve liveability in the region – noting that these issues predominately fall under the control of the state government.

Landowner concerns

While the RAI encountered no outright opposition to achieving net zero emission, there was concern from landowners regarding land usage and electricity infrastructure. These concerns included the safety of transmission lines near residential areas, fair compensation for land use and aesthetic concerns. 

Inequality was also a large concern, with participants feeling the region is bearing the cost of hosting the infrastructure required to meet energy transition goals. Inequalities were also expressed in terms of windfarm revenue distribution amongst landowners which may be exacerbating a fear of change and loss of control over land.

Small and medium enterprises

There are a variety of challenges impacting small and medium sized enterprises (SMEs). Participants noted the ability of large mining operators to pay high wages and recruit local workers into FIFO positions outside of the region. 

Participants from SMEs also noted difficulties in accessing large project opportunities, due to complex administrative processes requiring the forming of consortia to participate. Interview participants stated that larger providers tend to not focus on local sourcing unless government funding is required, which further limits SME participation.

Boom-and-bust

The Upper Spencer Gulf is expected to undergo a significant economic transformation with $20 billion of renewable projects in the pipeline, which will provide more than 20,000 job opportunities. 

The employment profile of most projects is front loaded, with many jobs during the construction phase and relatively few in terms of ongoing positions. Given the magnitude of projects in the pipeline, participants from the Upper Spencer Gulf are aware of the coming boom-and-bust in employment activity. The region is very familiar with boom-and-bust employment cycles and the challenges they bring – including housing shortages and increased rents, workforce shortages, road degradation and strain on local services. Participants expressed a strong desire to stagger this investment pipeline as best as possible to reduce the impact on local services and housing and create a solid legacy for the region. 

Workforce and skills

There is increasing attention being given to the transferability of skills from traditional industries to clean energy industries. Currently, the focus is on the provision of bridging programs and short courses rather than new and lengthy qualifications. These courses are being offered through vocational education and training (VET) institutions, TAFE centres of excellence, universities and industry-specific training providers. 

The Hydrogen and Fuel Cell Career Guide details the roles that are essential to supporting the emerging hydrogen industry in South Australia. The guide also underscores the opportunity of on-the-job training, apprenticeships and technical education that reflects the miscellaneous skill sets needed to steer the growth of the hydrogen industry in South Australia. Over half the expected jobs are professionals, with approximately one quarter being trade and technical.

Find out how regional communities are undertaking the transition to net zero

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Regional communities in Australia are joining those around the world to undertake the most significant transformation since the industrial revolution: the transition to net zero emissions.

In September 2022, the Commonwealth Government implemented the Climate Change Act (2022) detailing Australia's plan to transition to net zero by 2050. In line with the Paris Agreement, the government also pledged a 43% reduction in greenhouse gas emissions by 2030 from 2005 levels, as well as a longer-term goal of achieving net zero emissions by 2050.

In our 'Towards Net Zero: Empowering Regional Communities' report, we break down the net zero transition and highlight the impact it will have on Australia's regional, rural and remote communities.

The report was funded by the Australian Government through the Department of Infrastructure, Transport and Regional Development, Communications and the Arts; the Victorian Government Department of Jobs, Skills, Industry and Regions; the South Australian Government Department of Primary Industries and Regions; the Western Australian Government Department of Primary Industries and Regional Development; and the Queensland Government Department of Regional Development, Manufacturing and Water.

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