Sources of Energy and the Evolution of Spanish Industry
Sources of Energy
Energy and Its Transformations
Energy is the ability to perform work and produce transformations. Energy sources are elements or phenomena capable of doing this work and transformation. We can classify energy sources as non-renewable (exhaustible) and renewable (inexhaustible).
The Changing Energy Landscape in Spain
Early Reliance on Coal
Initially, Spain relied heavily on coal, but domestic production was insufficient, necessitating imports.
The Sixties: A Shift to Oil
The sixties marked a shift in the Spanish energy landscape with increased consumption due to the start of Spanish development. A massive increase in oil consumption began, driven by rising energy demand, the coal sector crisis, and oil’s affordability and ease of use.
The Seventies: Energy Crisis and Natural Gas
The seventies saw the incorporation of natural gas. More significantly, a severe energy crisis arose due to a significant increase in oil prices. This crisis marked a turning point in consumption trends.
Recent Trends
Oil consumption mirrored overall energy consumption, although growth has slowed in recent years. Coal consumption declined until 1980, when it rebounded during the oil crisis peak, but then declined again from 1983-84 onwards. Electricity and natural gas consumption continued to grow, driven by economic development and higher living standards.
Oil: Consumption and Dependence
Oil is the most consumed energy source, but domestic production is minimal, leading to energy dependence. Imports come mainly from the Middle East, Africa, Europe, and America. Oil is primarily used in electricity production, industry, and transportation, and is a crucial raw material for the petrochemical industry. Spain imports unprocessed (crude) oil and refines it domestically.
Natural Gas: A Recent Addition
Natural gas is a relatively new energy source. The most important domestic deposits are in Huelva and Sevilla, with imports primarily from Libya, Algeria, Portugal, and Norway. Methane, propane, butane, and town gas are used in energy production, industry (chemical, footwear, textiles), services, and domestic use.
Coal: Production and Consumption
Coal is a primary energy source where domestic production exceeds consumption (29.12% of consumption). The coal mining industry has been marked by protectionist policies, but Spain’s entry into the EU has led to liberalization and the presence of foreign monopolies, compounded by physical challenges in domestic deposits and financial weaknesses of mining companies.
Electricity Production
Electricity is primarily produced by:
- Power plants: Since the 1970s, these have formed the basis of electricity production (50%), using coal, natural gas, or oil. Gas and oil-fired plants are located on the coast, such as in Algeciras.
- Hydroelectric plants: These harness the power of waterfalls. Initially dominant, their importance has diminished due to Spain’s limited and irregular river systems. Production capacity is stagnant, with only small hydropower plants being built in mountainous areas, mainly in the northern basins, the Douro, Ebro, and Tagus rivers.
- Nuclear power plants: [Content related to nuclear power plants was missing from the original text]
Industry in the Present
The Third Industrial Revolution
The industry has undergone significant qualitative and quantitative changes, marking the Third Industrial Revolution, despite persistent structural problems. EU membership has provided access to a wider market and technological innovations but also requires adaptation to EU legislation and increased competition.
Structural Changes
Structural changes include the application of technological advances in production processes, the development of new products, changing working methods, and improved distribution, management, and marketing. These changes have led to new industrial sectors like high-tech industries and changes in industrial structure, promoting decentralization and flexibility. Firm size tends towards greater flexibility in employment, and industrial jobs require higher qualifications, with a shift towards the service sector.
Spanish Industrial Fabric
The Spanish industrial fabric can be grouped into three categories:
- Mature sectors undergoing restructuring: These sectors face reduced demand due to new materials or products, declining competitiveness due to technological backwardness or labor costs, and EU demands to reduce production or subsidies. Examples include the steel industry (Asturias, Cantabria, Basque Country, Navarra, Catalonia), metal processing (Basque Country, Madrid, Catalonia), white goods manufacturing, shipbuilding (Galicia, Bay of Cadiz, Cantabria, Basque Country, Cartagena), and textiles, footwear, and leather (Catalonia, Valencian Community).
- Dynamic industrial sectors: These promising sectors have high productivity and specialization, demand safe products, and have flexible business structures, but often rely on foreign capital. The automotive sector (Valladolid, Palencia, Zaragoza, Valencia, Barcelona) faces relocation threats. The chemical industry, including petrochemicals (Puertollano, Tarragona, Huelva) and chemical transformation (Basque Country, Madrid, Catalan coast), faces high foreign ownership and EU competition. The food industry comprises small companies throughout Spain, with concentrations in Galicia, La Rioja, Navarra, and Murcia, alongside multinationals like Hero and larger companies like El Pozo.
- High-tech sectors: These sectors utilize the latest technologies but face challenges like external dependency in research and technology, the predominance of small, less competitive companies, and workforce adaptation. These industries (microelectronics, telecommunications, automation, robotics, biotechnology, alternative energy) are located near large and medium-sized cities with high-quality residential environments and good accessibility.
Despite these changes, structural problems persist from earlier industrialization.
Spanish Industry Between 1855 and 1975
Limited Industrial Development (1855-1900)
Spanish industrialization was delayed compared to other European countries due to factors like shortages of raw materials and energy, low investment, limited demand, technological backwardness, the loss of colonies, and inadequate protectionist policies. The iron and steel industry developed in Andalusia, Asturias, Cantabria, and the Basque Country.
Stagnation (1930s-1959)
Industrial stagnation occurred due to the 1930s crisis, the Civil War, and autarkic policies that restricted imports of resources, machinery, and capital.
Industrial Development (1960-1975)
The Stabilization Plan of 1959 led to the abandonment of autarkic policies, enabling access to resources and capital markets. Foreign investment increased, attracted by growing demand, low production costs, and abundant labor. Growth occurred in basic sectors (steel, petrochemicals, electricity), strategic sectors (arms, shipbuilding), and consumer goods sectors (footwear, textiles, food, cars, appliances). Capital goods industries (machinery, transport equipment) remained underdeveloped due to technological backwardness.
Industrial Structure (1850-1975)
The industrial structure was characterized by a contrast between small, traditional, low-investment companies and large companies in key sectors, often state-owned or subsidiaries of multinationals. Technological backwardness, dependence on foreign technology and finance, energy dependence, and a low-skilled workforce were persistent issues. Industrial location was determined by cost advantages.
Industrial Crisis and Restructuring (1975-1985)
The 1975 Energy Crisis and Other Factors
The 1975 energy crisis, triggered by rising oil prices, combined with external factors like technological shifts, globalization, and competition from newly industrialized countries, and internal factors like Spain’s democratic transition and structural weaknesses, led to a period of industrial decline.
Consequences of the Crisis
were: Deepening the internal contradictions of our production system accumulated in previous phases. Increased competition in the case of certain Spanish manufactures the third world, a fact linked to the location strategies of multinationals. Forced industrial reorientation. Industrial conversion of certain key sectors companies with excessive use of labor and energy, as in the case of the steel industry, shipbuilding, textiles, clothing and footwear. Poor business structures inherited as minifundismo business, technological obsolescence and low productivity with an over-reliance on external financing. Strong direct and indirect wage increases during the 70’s, which together with the rigidity of the Spanish labor market has resulted in the loss of competitiveness and profits of our companies. The democratic transition that led to business uncertainty and profound transformation of industrial relations after the legalization of trade unions. And indeterminacy in policies implemented by successive governments. Retraction of foreign investment. Business strategies aimed at improving the profitability at the expense of jobs, by automating repetitive tasks of manufacturing design even with all these changes is imposed to carry out a restructuring or adaptation of a production system that has become outdated due to change in the technology cycle to new market requirements, provided under competitive conditions. The conversion unequally affect companies that manufacture products according to the degree of technological innovation and the dynamism of domestic and foreign markets. The measures consisted of production to adjust supply to demand for what we proceeded to company closures or reductions in production capacity, regulation of the templates through layoffs or early retirements and technological modernization and specialized products most in demand is given strong restructuring in traditional sectors such as textiles, clothing, footwear. steel, metallurgy, shipbuilding, etc. To this we must add a favorable development of chemical engineering, electronic materials, food and beverage packaging or printing. As the industrial structure of big business has given way to mid-sized establishments and small, more flexible, or outsourcing of certain tasks and certain assets of little value to other smaller companies that occupy, by general, the periphery industrial system.