"The Iberian region prioritizes renewable energy such as wind power, and this has led to the effect of lowering electricity bills." On the 30th of last month (local time), Irantzu Allende Fernández de Eribe, Deputy Minister of Energy Transition for the Basque Government, whom we met in Bilbao, northern Spain, explained the background of why Spain and Portugal suffered less of an energy price shock despite the Middle East situation. She stated, "Achieving energy independence is very important. Securing our own energy allows us to establish better industrial strategies and also contributes to improving the welfare of the entire nation as a whole."

According to the global energy think tank Ember, the average electricity price in Spain in March, when the Middle East crisis flared up, was 42 euros per megawatt-hour (MWh). This is less than one-third of Italy's (143 euros), which has a high dependence on gas. This is the result of expanding power generation facilities centered on wind and solar power, which have a fuel cost of 'zero (0)'. Spain's wind and solar power generation increased by 37% from 2021 to last year.

The energy transition to wind and solar power served as an opportunity for industrial growth while reducing the shock of soaring fossil fuel prices. In particular, in the Basque Country, technologies from existing manufacturing industries such as shipbuilding and steel expanded into the wind industry, creating new growth engines.

This facet of change could be seen at the Port of Bilbao. At the docks visited on the 2nd, giant wind turbine blades and towers were stacked everywhere. Jon Anasagasti, General Manager of Business Development and Multimodal Transport at the Port of Bilbao, explained, "Global companies like Siemens Gamesa and Vestas store various parts here and ship them to all parts of the world." 38% of the port's total area is utilized for the wind industry.

Having broad autonomy in taxation and fiscal matters, the Basque Country has established itself early on as a major European wind industry hub. About 150 wind-related companies are gathered in the Basque Country, employing approximately 5,100 people. The supply chain is also tight enough to produce all wind equipment locally except for blades. Thus, an industrial ecosystem where production, logistics, and export are intertwined centered around the port has been formed.

Wind power was not the mainstay industry from the beginning. As the shipbuilding and steel industries declined due to competition with Asian countries, companies had to find a breakthrough. Wind power emerged as a new market where they could utilize their existing welding, forging, and metal processing technologies.

(Overview of the Basque Country Wind Industry / Graphic = Kim Hyun-jung)

Glual Group, founded in 1969, is a representative example. The company, which previously focused on hydraulic technology for hydroelectric power, expanded its business into hydraulic systems for wind turbines in the early 1990s. Alazne Zabaleta, CEO, whom we met on the 1st, said, "Because we knew well how hydraulic technology is actually applied, there was no major difficulty in transitioning from hydro to wind power," adding, "The proportion of the wind business in total sales has increased to about 35%."

What supported this transition was public-private cooperation. The Basque Country connected companies, technology centers, and administrative agencies through a cluster policy launched in 1991. The energy cluster supported the exchange of technology and knowledge between large corporations and local small and medium-sized enterprises (SMEs), and the regional government poured funds into joint research and development between companies and research institutions. The Trade and Investment Agency helped with overseas expansion and finding business partners.

Another characteristic is that it did not rely solely on internal power generation demand. Due to topography and other conditions, the Basque Country was not a region where self-generated renewable energy production was active. Instead, it grew its manufacturing industry by taking the expansion of wind power in Spain and Europe as its market. Mikel Amundarain Leibar, Director General of Energy for the Basque Government, explained, "It is the result of preemptively fostering related companies from the early days when the renewable energy industry began to grow."

The Basque experience provides implications for South Korea, which also possesses shipbuilding and steel foundations. This is because the expansion of renewable energy can serve as an opportunity to expand the market for existing manufacturing industries beyond securing electricity.

However, a predictable business environment where companies can invest is necessary. Begoña Díaz González, General Manager of International Business at Iberdrola, cited business schedule and regulatory uncertainties as the background for abandoning her past review of entering the South Korean market. CEO Alazne stated, "South Korea has all the technology and infrastructure necessary for the wind industry," adding, "Choices are needed at the national level to build a strategic energy mix."

[ⓒ Global Economic Times. 무단전재-재배포 금지]