Written by: Suhaib Shams
The Spanish industry is facing a new wave of pressure caused by rising energy costs, with industrial demand for natural gas recording a noticeable decline of 9.4% in September compared to the same period last year. This decline comes as fuel prices rise to exceed the barrier of 85 euros per megawatt-hour, threatening the competitiveness of companies and their ability to continue production.
Sharp decline in various industrial sectors
Data released by the energy sector indicated that industrial consumption reached low levels compared to the pre-energy crisis stage. The cogeneration sector recorded the largest annual decline of 26%, followed by the textile sector with a decline of 20%, and the refining industry by 14%, in addition to clear declines in the chemical, pharmaceutical, construction, and metal sectors.
Impacts extend to electricity consumption
The impact of the energy crisis is not limited to gas alone, but extends to include electricity-intensive companies. Expectations regarding electricity consumption have seen downward adjustments, after indicators had pointed to a recovery in activity in the first half of the year. Companies are facing additional pressure as a result of the frequent resort to demand-response mechanisms by the electricity system operator for grid balancing, which requires adjusting operational processes to cope with the scarcity of renewable energy generation and the low availability of combined cycle plants.
Calls for urgent action and emergency support
In light of these continuing challenges, bodies representing the industrial sector warn that current support measures are insufficient to face the record-high prices. The concerned parties are calling for the provision of short-term tools to alleviate the burdens on energy-intensive industries, and the extension of European frameworks to support production sectors to ensure their survival and continued competitiveness amidst global market pressures.
