Galicia’S First Industrial Oasis Became A Desert

2021-02-08   |   by CusiGO

On January 22, more than 200 workers marched in the streets of Coruna amid the cry of “forest industry has no future”. They are from entessa thermal power plant in Ponzi and Siemens gamesa wind power plant in somozas. Both companies announced their intention to close this month. The first is the relocation plan, and the second is the collective layoff of 215 people. The slogan has become a hymn for workers in northern Galicia, who have been hit hard by manufacturers. With the closure of the two plants, Alcoa’s case, which called for collective layoffs in 2020, is also on trial, but was rejected by the court.

Galicia industry is more volatile than other sectors. An obvious example is the coronavirus crisis, which has resulted in an 11 percentage point drop in the GDP of the community as a whole. Even in 2019, it’s down 1.4% from 2018, according to the latest Galicia Economic Yearbook. Juan Ares, an economist at the University of Santiago de Compostela (USC) in San Diego, linked this decline to energy behavior. He explained that because of the tense situation left by Endesa, the specific scholar said: “autonomy activities are very concentrated. If an important sector is pierced, the whole industry will catch a cold.”.

Endesa concluded in January last year, after a year of testing, that the plan to burn biofuels at the aspentes center would not work. Sunta, the central government and the City Council issued a contrary report, saying the company was reluctant to work on the economic feasibility of the project. Marcos Prieto, a worker and representative of UGT, said the problem was that when energy technicians came up with a mineral free model, they were based on 50% of the coal. The company argued that it used the agreed model.

This is the second economic blow since gamesa’s report closed this month, claiming that there is a lack of demand for its shovels made in somozas. Sergio L รณ PEZ, chairman of the working committee, said it was a secret move: “it happened that when they bought a factory in Portugal, the new model was paralyzed.” Xunta agreed and asked job to check the ere. For ankso Calvo, an economist at the University of Colonia, this may be a response to changes in wind growth forecasts. The company opened in the late 1990s in response to the subsequent regulatory changes in Galicia and Spain and the trend of renewable energy shutdown in 2012: “this reduces the cruising speed of renewable energy development,” he said.

Galicia has not returned to the production level of the first decade of this century. After the past two crises, only five sectors – food, beverage, paper, chemical and other manufacturing – produced more in 2019 than in 2007. Experts blame the industry’s inability to adapt to the energy transition. Xunta and USC economist Xavier Vence agree with this diagnosis. Calvo, who served as director general of industry from 2005 to 2009, believes that innovation capabilities also match energy production and parts manufacturing capabilities. He hopes that this will now be taken into account with the full development of the Galicia wind farm.

The impact of ecological transformation and electricity market reform has led to high costs and weakened the competitiveness of the energy consuming industry as described by Vence. This is the case with Alcoa, which has been looking for solutions to these prices since 2012. It continues to see them as ballast produced by its main aluminium plant, which negotiated a sale with a state-owned industrial holding company.

The company’s decisions threaten the future of the area they leave. For example, in Ferrol (Coruna), where xunta is concerned that the closure of Endesa and gamesa will affect the region, ferrolanos is already facing a shortage of new orders from navantea shipyard. The same is true in the Maliya region: without Alcoa, it would have lost most of its revenue.

According to Juan Ares, there is a sense of dismantling traditional production structures, which is crucial to Galicia’s economy: “there are structural problems in our old industries, and it’s hard to find immediate solutions.” He said the recovery will take time, but there are also some industries that are growing slowly, such as the automobile industry. The workers believed that they negotiated with a wall and the decision was made hundreds or thousands of miles from Galicia.

The same is true for Alcoa employees, who believe that the company will not seek other options and that the closure is the last long before the end of the negotiations. Endesa’s situation is similar. Valentine Gonzalez Formoso, the Socialist mayor of aspentes, believes that energy companies have never planned to renovate power plants. “We feel cheated, we are mature people who know how to diversify,” he sighs. Prito agreed that while he welcomed the company’s new plans – a hydrogen plant and a wind power plant – he doubted whether that would change the situation: gamesa would leave even if the shovel was useful for the new project. “We’ve seen the reorganization of the Navy and we know how it’s going,” Dean said.

Concerns about the future of northern Galicia have exacerbated insecurity. Not only in the case of collective layoffs, but also because of the relocation and its impact on the lives of neighbouring countries. Prito realized that he had to leave Leda and he didn’t know how to solve the problem. His wife has a position as a teacher: “we’ve lost everything.” Formoso wanted to know what would happen to those who stayed: “one third of our territory is mine, and the city council will lose 26% of its income,” he warned. Both of you will continue to look for formulas so that the energy conversion does not leave anyone behind.