A new report says Australia could power a manufacturing ‘renaissance’ using renewable energy.

A new study by Dan Nahum, an economist at the Centre for Future Work, points out that power from renewable energy sources (both solar and wind) are now substantially less expensive than fossil fuel generation on a full lifecycle cost basis.

The report (available in PDF form, here) says that cost advantage will grow in coming years.

The report simulates the annual power cost savings to manufacturers if the sector's current use of fossil fuel-fired power was fully transferred to renewables (as existing generating facilities are retired and replaced).

It finds that the sector's power bill would decline by an estimated $1.6 billion per year, or 23 per cent, compared to the current fuel mix. The saving swells to $2.2 billion (in constant dollars) by 2050.

The paper also provides numerous examples of manufacturing industries which are already making use of renewable power to capture cost and reliability advantages, as well as various manufacturing industries which hold great potential to supply Australian-made manufactured inputs to renewable power systems (from lithium-ion batteries and electric vehicles, to public transportation rolling stock, to green hydrogen).

The paper reports international evidence showing that companies which have reduced greenhouse gas emissions more successfully have attained greater success in manufacturing output and exports than Australia.

It also indicates a strong majority overlap between Australians regarding the manufacturing sector as important, and those in favour of expanding the use of renewables, making this a viable dual public policy goal for governments.