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From Products to Energy Transition: available knowledge and transformation in the economy

Atualizado: 17 de ago. de 2021

ABSTRACT

1. Introduction

The transition to carbon neutrality is a necessity for the world in the face of climate change. Some countries have already managed to make structured reflections on this transition and to quantify in general terms the necessary societal effort. This is the case in Portugal with the Roadmap for Carbon Neutrality[1]. The search for reaching quantified goals is complex and involves a myriad of public and private decisions. The decarbonization of the electro-producing sector and electric mobility is fundamental for achieving the goal of neutrality. Without underestimating the significant contributions that need to be made by the forestry sector, agriculture and industry, it is essential to consider the industrial context that can allow the increase of solar, offshore, and onshore wind energy, batteries, and electric vehicles. The referred roadmap considers that in 2050 there should be 14.3 GW of wind energy or an increase of 186% in terms of the installed capacity of 2015[1]. In order to have this volume of facilities and equipment, it is necessary to reflect on the volumes of products needed, their costs, and their origins (considering the current maturity of technologies and making sensitivity analyzes for future improvements).

It is crucial to integrate energy planning and industrial policy. This work makes the case of one product used in wind power technology, the blades. They were classified by [2] in the Harmonized System of classification (HS2007) as the product “841290 - Engines; parts, for engines and motors”. There are several forms of classification of products and activities, another one is the NACE code[3], and in this case, after the wind blades could be classified as “2811 - Manufacture of engines and turbines, except aircraft, vehicle, and cycle engines”.

Understand the industrial tissue of a country can be seen as a way to understand the knowledge embodied in that country because to produce something it is necessary a lot of capabilities (human, physical and institutional)[4]. There are connections between products, showing how similar can be the baskets of capabilities of the countries that produce them and in which direction are the most advantageous transitions in the industrial policy. The bunch of connections between products is called “product space” in the literature about economic complexity.

2. Methods

For this work, wind power is an illustrative case. It will compare the previous development of the production of a component of power production and the utilization of this source and then the connections between one product and its neighbours in a Portuguese product space. This comparison aims to draft some bridges between climate and industrial policies. The historical production of blades or a “proxy” of that measure by the product 2811 (Nace Rev2) is compared with the increase of wind power in the country in the last fifteen years. On the other hand, the Portuguese product space is analyzed in terms of the product 841290 in the respective connected products or nodes.


3. Results

The first results show that the increase in the production of product 2811, our proxy for blades, was accomplished by a national market increase and a wind power deployment between 2004 and 2007 as shown in Figure 1. Then the production keeps increasing production, not for the national market. Four years after this decoupling the wind power production stabilized the annual generation, one way to read that could be that is four years offset between production and generation in the grid.

Figure 1 – Industrial production and wind power generation

Data source: INE


Figure 2 - Portuguese 2018 Product Space Data source: Dataverse Harvard University




Another approach is shown in Figure 2, considering the product space and the revealed comparative advantages (RCA). It demonstrates that the product 841290 has RCA above one, which means that the share of the product in the national industry is at least the same as the share of the international production of that product in international trade. For the neighbours, is the same, but if we consider an RCA above 2, neither the product nor the neighbours are so relevant.


4. Conclusions

As work in progress, this research put some light in approaches to integrate the climate and industrial policies. The two approaches could be combined in the future as a way to facilitate the materialization of the c


limate policy and at the same time, work on the most advantageous industrial policy for Portuguese society.


References

.

[1] RCM, Resolução do Conselho de Ministros 107/2019, 2019.

[2] I. Wind, HS Codes and the Renewable Energy Sector, 2010. https://www.ictsd.org/downloads/2010/01/hs-codes-and-the-renewable-energy-sector.pdf.

[3] European Commission, Statistical classification of economic activities in the European Community NACE Rev, 2008.

[4] C.A. Hidalgo, B. Winger, A.L. Barabási, R. Hausmann, The product space conditions the development of nations, Science (80-. ). 317 (2007) 482–487. https://doi.org/10.1126/science.1144581.


KEYWORDS

Wind power; industrial policy; climate policy

 

Barbosa, J., Bento, N. and Fontes, M. (2021). From Products to Energy Transition: available knowledge and readiness for transformation in the economy, oral presentation at APPEN2021 Virtual Conference - Energy Transition and Sustainability - 20 e 21 de Janeiro 2021, Lisboa.

 





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