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8 marzo 2024

Believe it

Industry is the second most energy-consuming sector in our country. Its electrification based on renewable energies is a very important step towards achieving its decarbonisation, which will strengthen economic competitiveness and promote the fight against climate change. With its latest campaign, aelēc, the Association of Electricity Companies, wants to remind citizens of the commitment and tireless work being done to achieve this goal.

 

By Laureano Álvarez

Spain's industrial sector – 16% of GDP – is below the European average of 20%. Spanish industry has lost half of its weight in the economy in the last four decades. This situation has particular causes related to the Spanish economic context (such as the high weight of the services sector or the smaller size of companies), and it is also due to common elements with other European countries, such as loss of competitiveness with countries with lower wages or greater integration of supply chains.

What are the advantages of strengthening industrial development in Spain? There is a long list of advantages of an economy with a stronger industrial sector. Industry, being less exposed to seasonality, has the potential to create a higher percentage of stable and quality employment. Moreover, by requiring transferable specialised training, it contributes to the diversification of the labour market.

Industrialised economies are known for their diversified productive activity, which allows them to absorb crises in specific sectors and redirect resources to unaffected areas. A specialised and competitive industry reduces dependence on domestic demand, promoting exports as an engine of aggregate consumption. Industrial goods, with lower demand flexibility, exhibit greater stability during economic contractions compared to highly discrete services.

“Industry is the second largest energy-consuming sector in our country.”. 

The establishment of industries not only stimulates the production of complementary industrial goods, but also generates support services, acting as a multiplier effect on the local economy. Finally, industry, characterised by its higher investment in research, development and innovation compared to the service sector, boosts the overall productivity of the economy.

The industry invested €14 billion in energy in 2021, making it the second largest energy-consuming sector in the country, with approximately 26% of total final energy, most of which is fossil fuels. The decarbonisation of industry is a matter of economic competitiveness and fighting against climate change.

Thanks to the different renewable technologies and our abundant and competitive resources in this field (sun, wind and water, among others), the greater availability of land for the development of generation plants and the consolidated existence of leading companies in the sector, our country can produce renewable energy at a significantly lower cost (between 20-30%) than the European average.

The electrification of industry is a key part of the decarbonisation of this sector. Technologies already exist that enable direct electrification of energy uses on an industrial scale, and rapid progress is being made in the viability of other technologies that enable the decarbonisation of more complex industrial processes. A significant part of industrial energy consumption is technically directly electrifiable, especially those industries with thermal requirements below 400 °C. Such direct electrification, where feasible, is an efficient and cost-effective way to deliver renewable energy to final demand. The adoption of new renewable technologies in industry will not only contribute to the decarbonisation roadmap of the sector, but will also lead to improvements in efficiency and the reduction of the sector's energy consumption.

 

“The electrification of industry is a key piece of the decarbonisation of this sector”. 

Faced with this new paradigm, Spain can increase the competitiveness of Spanish industry within a decarbonised EU; attract new industry to our country, thanks to its low energy costs; develop a value chain for the manufacture and maintenance of equipment associated with the Energy Transition; and reduce energy imports, improving Spain's energy independence. These elements are key for our country to capture the great opportunity that presents itself and take advantage of the competitive advantage we have.

Turning Spain into a sustainable energy and industrial energy power requires rapid and coordinated action, which requires promoting key measures such as:

(i) support, financing or tax advantage mechanisms to incentivise investments in electrification and decarbonisation, especially in sectors that are not economically viable in the short term;

(ii) the incorporation of storage solutions for the efficient integration of renewable energies into the electricity system;

iii) the development and updating of the electricity grid to accompany industrial demand in its electrification, anticipating needs and adapting remuneration models;

iv) incentivising the development of the national and European value chain related to the Energy Transition through agile and simple fiscal aid.

We just need to believe it.

Believing in renewable energy is believing in the fight against climate change.

Believing in renewable energy is believing in our energy independence.

Believing in renewable energy is believing in our economic development.

Believing in renewable energy is believing in our country.

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