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, and it is no longer possible to rely on costs continually decreasing, and assume that supply capacity will meet demand, warned SMA.
SMA believes 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,” explained Joshua Birmingham, director of large scale and project solutions at SMA.
“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.”
As stated in the Rystad Energy report, “high prices and long lead times threaten solar PV capacity build-out”, and the forecasts of 225 government-wide acquisition contracts (GWACs) of PV to start construction in 2023 could potentially be downgraded.
The report also highlighted 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 engineering, procurement and construction (EPCs) and developers in the Australian market have already been impacted by long equipment delays or even cancellations,” Birmingham said.
“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.”
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 21GW, the German manufacturer expects to take that capacity to 40GW 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,” added 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, which takes place on 26-27 October at the Melbourne Convention and Exhibition Centre.
SMA will be located at booth M11/MM113 and will have 3D projection mapping technology on display.
