How can Britain become a clean energy superpower?
How can Britain become a clean energy superpower?
The Big Ask | No. 06.2024
In its Manifesto, the Labour Party stated that making Britain a clean energy superpower would be one of its key five missions in government. Since coming to power, the new government has begun to enact policy to reach its goals of fully decarbonising the United Kingdom’s (UK) electricity mix by 2030, while simultaneously improving the country’s energy security.
However, Britain relies heavily on foreign countries for both critical minerals and manufactured goods essential for the green transition. In particular, the People’s Republic of China (PRC) dominates the global trade in critical minerals, batteries, and solar module production. So, in this week’s Big Ask, we asked six experts: How can Britain become an energy superpower while reducing its dependency on foreign manufacturing and resources?
Cosima Cassel
Senior Policy Advisor, E3G
The new Labour government’s vision of a ‘clean energy superpower’ should aspire towards the creation of a secure, sustainable and affordable energy system at home, and support others to do the same globally. This can be achieved by focusing on several key areas.
Firstly, by delivering on domestic decarbonisation. Labour has vowed to decarbonise the power sector by 2030, and it has already made several significant reforms to accelerate wind power rollout. It can continue this momentum by unblocking the planning system, expanding the grid and promoting clean tech solutions, including demand-side flexibility, long-duration energy storage and green hydrogen. Success can provide a blueprint for others to follow. The UK should also invest in developing domestic industry in critical technologies not yet dominated by others.
Secondly, Britain should establish clean industrial partnerships. Bilateral partnerships should be based on equality and support mutual energy security and economic resilience. This means supporting new value chain creation and enabling technical knowledge transfer. The UK will never be entirely self-sufficient – many technologies can be produced more efficiently in other countries, and many critical mineral reserves only exist abroad. But by diversifying its trade links, Britain can reduce dependencies on any one country.
Finally, London should support a joined-up global transition and lead efforts to accelerate the global transition. By creating and leading a ‘Clean Power Alliance’, a high-profile ‘umbrella’ platform to leverage the ecosystem of existing energy transition alliances, the UK could bring political leaders and first movers together, securing ambitious commitments and ensuring their implementation.
Elizabeth Lindley
Policy Fellow in the China Observatory, Council on Geostrategy
The Labour government has pledged the largest expansion of renewable energy in Britain’s history by 2030. Onshore wind generating capacity is to be doubled; solar power tripled, and offshore wind quadrupled. Such ambition is welcome, particularly when driven by the desire to detangle the UK’s energy security from the designs of dictators such as Vladimir Putin. Labour’s targets for energy independence, however, should give proper weight to the PRC.
Beijing maintains a near-monopoly over critical segments of the clean energy supply chain, a position established through substantial state-directed investments in mineral processing and the manufacture of key energy-related components. These efforts, bolstered by generous state-backed subsidies and guided by the Chinese government’s long-term industrial policy, have cemented the PRC’s central role in the production of wind turbines, electric vehicles, permanent magnets, solar photovoltaics (PV), and batteries. As the Labour government rushes to advance Britain’s decarbonisation by 2030, the temptation will be to rely on cheap Chinese clean energy components and infrastructure – as with the recent Mallard Pass solar farm project. However, expediency should not undermine the creation of a sustainable clean energy supply chain that aligns with the UK’s national security and values. A holistic approach is needed.
Mitigating the risks of dependency on another autocratic regime requires the UK’s investment in joint industrial policy with democratic partner nations. Britain should look to ‘friendshoring’, for example, with investment in mining operations and infrastructure in the United States, Australia, and Canada – and develop domestic capabilities to process and utilise critical minerals. Diversification of supply chains should be encouraged as much as possible and prioritised over cutting costs. Additionally, increasing the funding for research and development in clean energy technologies (and pursuing still under-deployed technologies such as heat pumps) could lead to breakthroughs which reduce reliance on imported components. Finally, the Department for Energy Security and Net Zero should be in regular consultation with China experts.
Dan Marks
Research Fellow in Energy Security, RUSI
Clean energy industries are global, so Britain will always have some level of dependency on other nations. But if the Labour Party wants Britain to be competitive in the manufacturing of the clean technologies it hopes to deploy over the next decade, the UK will need to be networked into these global industries and supply chains as well as provide a positive business environment.
Investment is needed into Britain, but UK investors also need access to the fastest growing international markets. This needn’t necessarily increase risks. Increased demand and investment into clean energy industries internationally can drive diversification and help overcome high barriers to entry.
But reducing dependence on the PRC, in particular, is likely to be a slow process. Chinese companies are investing heavily to maintain the advantage they have developed over several decades and are embracing international partnerships. Making inroads into Chinese market share will require a network of competitive suppliers around the world and across the supply chain. Furthermore, the growing importance of these industries means that protectionism and subsidies at home or from allies could have implications for other priority areas, such as security partnerships. When implementing industrial strategies, it is important to consider these global knock-on effects.
Andy Scollick
Independent researcher and consultant
Climate change, energy security and market forces make the energy transition inevitable. However, the transformation of hydrocarbons-based economies and societies to ones powered by clean energy sources will produce winners and losers.
As developed economies adopt clean energy systems and green technologies, traditional fossil fuel producers face profound dislocation. Meanwhile, other states will benefit from the energy transition due to their geographic location and ability to exploit abundant renewable energy sources. Britain is geographically well placed to exploit not only wind and solar, but also wave, tidal, geothermal, and hydro. If these resources are properly harnessed, the UK could become a significant producer of clean energy.
However, Britain lacks the domestic supply of the critical resources that are required to manufacture green energy infrastructure and technologies and is dependent on other countries – particularly the PRC – for them. To improve the UK’s position, the government should work with allies and partner nations to diversify global supply chains and reduce dependence on Beijing. Additionally, action should be taken to support British industry to develop domestic clean energy manufacturing capacity.
Becoming a clean energy superpower will not be easy or quick and would require significant investment, and a clear industrial and critical minerals strategy. But the benefits to Britain’s energy security and geopolitical position would be immense.
Dr Mann Virdee
Senior Research Fellow in science, technology, and economics, Council on Geostrategy
Before Britain can think of being an energy superpower and exporting energy to other countries, it must first figure out how to secure its own supply.
The COVID-19 pandemic, Russia’s invasion of Ukraine, and the need to tackle climate change have forced the UK to review its energy supply and security. Britain has set out its intention for greater energy independence and resilience – but it is off course. Although the UK was a net exporter of energy in the late 1990s and early 2000s, it now imports about 40% of its energy.
When it comes to energy generation and storage, the PRC has invested heavily and now dominates much of the market. Beijing dominates global solar PV supply chains, accounting for around 80% of all the manufacturing stages. It also controls about 65% of the global wind turbine manufacturers’ market share. It is estimated that the PRC will have nearly 95% of the world's capacity to make sodium batteries.
So if Britain wants to be an energy superpower, relying on solar or wind would currently mean depending on Chinese manufacturing. Additionally, solar and wind power are variable renewables, meaning their availability varies over time, and they are also non-synchronous – in contrast to dispatchable power generation technologies.
The UK government believes that small modular nuclear reactors have an important role – alongside conventional nuclear – in helping Britain achieve a secure, affordable decarbonised energy system. This may be a way forward for the UK – but Britain must invest more if these ambitions are to be realised.
There are also fundamental aspects of the UK’s energy infrastructure that will need to be addressed. It is estimated that, from Britain’s existing power grids and predicted electricity demand, more than half a million kilometres of electric lines will need to be either added or upgraded across the UK.
William Young
Associate Fellow in Environmental Security, Council on Geostrategy
What is an ‘energy superpower?’ A country which has surplus energy which can be used to exert influence and control. Think of Saudi Arabian oil, Brazilian hydropower, Russian gas and oil, and recently American hydrocarbons produced via hydraulic fracturing. The common elements between them all was multi-decade, technology enabled investment in the production of energy from their natural resources to the point where it outgrew domestic demand and enabled export opportunities.
What is Britain’s equivalent? In the past, the UK relied on abundant coal, and more recently North Sea oil and gas. In the 2020s, offshore wind provides a major opportunity, but will not confer superpower status – it will enable power exports but Britain is unlikely to use this to exert influence and control over neighbouring states. Meanwhile, Beijing has achieved superpower status in solar and batteries.
Small modular (nuclear) reactors could be an option for Britain – with Rolls Royce currently developing a domestic product and world leading nuclear fuel processing facilities at Sellafield – but safety regulations and non-proliferation concerns will constrain this market.
As such there is no obvious foundation for ‘energy superpower’ claims, and Britain should focus instead on the more mundane task of delivering high quality, low cost, sustainable energy and position itself as a central pillar in supply chains for advanced technology.
If it does that – and builds strong commercial relationships with producing countries – then it has a fighting chance of becoming a refining, distribution and trading hub for energy, critical minerals and advanced technologies required for the energy transition. By being at the centre of a web of trade networks, defended by the British military and key allies, the UK can keep its options open and engage with major global energy players.
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Important to consider how the decarbonisation of shipping fits into this too. The UK will have great capacity to support ships running on hydrogen and ammonia if it can properly utilise off shore wind power to create hydrogen and it's derivatives - something ports in the north of Scotland and Northern Ireland are already carefully considering!