Australia’s renewable energy targets are ‘extremely challenging’ given supply chain issues, elevated prices and a global chip shortage

Australia’s renewable energy targets are ‘extremely challenging’ given supply chain issues, elevated prices and a global chip shortage

SMA to double manufacturing capabilities amid severe supply chain and elevated pricing issues which threaten Australia’s renewable energy goals.

Global supply chain issues have made Australia’s renewable energy targets ‘extremely challenging’, according to solar energy equipment supplier SMA Australia.

Global chip and raw materials constraints have already seen many suppliers to the PV and storage industry delay or cancel contracts. It is no longer possible to rely on costs continually decreasing and assume that supply capacity will meet demand, warns SMA Australia. Strong relationships with credible and stable suppliers will become critical to reaching global targets.

“Over the last few months, there have been countless announcements from the federal and state governments and from the private sector relating to de-carbonisation through renewable energy deployment,” said SMA Australia VP, Large Scale and Project Solutions, Joshua Birmingham.

“This is undeniably fantastic news for Australia and for the planet, however, this growth will present challenges for the industry, where demand may outstrip supply in many key areas of the renewable energy value chain,” he cautioned.

As stated in the Rystad Energy report, “high prices and long lead times threaten solar PV capacity build-out” the forecasts of 225 GWac of PV to start construction in 2023 could potentially be downgraded.

The report also highlights how lead times for new inverters are currently being quoted anywhere between six to 15 months, highlighting the severity of the current blockages in the supply chain.

“A lot of EPCs and developers in the Australian market have already been impacted by long equipment delays or even cancellations,” said Mr Birmingham.

“Given inverter selection is made at such an early stage in Australia security of supply and lead time certainty is paramount, the risk of a delay to commercial operation due to supplier delays is massive,” he continued.

Such challenges are one of the key reasons SMA announced plans to double its production capacity at its German headquarters. With a current capacity of 21 GW, the German manufacturer expects to take that capacity to 40 GW by 2024.

The expansion is to start construction later this year and will primarily be dedicated to the manufacture of inverters for the large-scale PV industry.

SMA is confident that this decision, coupled with its strong supplier relationships - forged over more than 40 years - will allow its supply chain to remain one of the most reliable, stable and sustainable in the industry.

“We’re confident we can weather the oncoming storm. Despite lead times blowing out around us, we have been able to maintain one of the best positions in the market,” said Birmingham.

“2023 looks to be an unprecedented year of growth for renewable energy in Australia. With this, strong and reliable partners will become critical to solar and storage projects achieving their targeted start dates.”

These issues and more are set to be discussed at All-Energy Australia, the country's largest and most anticipated clean energy event. With over 200 speakers All-Energy Australia is a unique chance for suppliers, experts and industry leaders to meet, connect and exchange ideas.

The event takes place from 26-27 October 2022 at the MCEC, Melbourne.

About SMA Australia:
As a leading global specialist in photovoltaic and storage system technology, the SMA Group is setting the standards today for the decentralized and renewable energy supply of tomorrow. SMA’s portfolio contains a wide range of efficient PV and battery inverters, holistic system solutions for PV and battery-storage systems of all power classes, intelligent energy management systems and charging solutions for electric vehicles and power-to-gas applications. Digital energy services as well as extensive services up to and including operation and maintenance services for PV power plants round off SMA’s range. SMA inverters with a total output of approximately 115 gigawatts have been installed in more than 190 countries worldwide. SMA’s multi-award-winning technology is protected by approximately 1,700 patents and utility models. Since 2008, the Group’s parent company, SMA Solar Technology AG, has been listed on the Prime Standard of the Frankfurt Stock Exchange (S92) and is listed in the TecDAX index and SDAX index.

SMA Australia Pty Ltd
Level 1, 213 Miller Street
North Sydney, NSW, 2060
Tel: +61 2 9491 4200

Press Contact:
Verena Griffiths
Marketing Manager OCEANIA
Tel: +61 420 228 245

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