Renewables boss: People don’t realise ‘control’ China has over UK’s net zero push
The UK is a decade away from cutting its dependence on China to meet its renewables ambitions, warned the boss of a leading clean energy firm.
James Basden, co-founder of Zenobe Energy, told City A.M. that as the government shifted its energy system from fossil fuels to low carbon solutions such as wind, solar and hydrogen, the UK risked becoming more and more reliant to China.
In particular, he argued that China had a stranglehold on battery storage products – which meant China was “going to be a part of” the UK’s push to net zero, “whatever happens.”
“I think people don’t quite understand just how far in front China is, particularly in the world of battery storage, he said.
Commenting on China’s dominance, Basden added: “They control the supply chain all the way from the minerals through to assembly and distribution. That means both our power sector and automotive sector are very dependent on Chinese products.”
The government is targeting net zero carbon emissions over the next three decades, alongside more immediate targets such as decarbonising the electricity grid by 2035, and banning the sale of new petrol and diesel vehicles by 2030.
These goals will require a huge ramp up in battery installations and storage both for electric vehicles and for harnessing renewable generation from clean energy projects.
However, over eighty per cent of the world’s battery cells are produced in China, with the country also being a world leader in mineral acquisition and processing.
Basden was not in favour of vast subsidy pledges as they “distort markets”, but he did urge Downing Street to unveil its own industrial strategy to help domestic products develop at scale, and reduce the UK’s reliance on Chinese imports.
While this would require government incentives “to start off with,” this would be eased to ensure projects could compete in market conditions.
He said: “We have talked about wanting to be a world leader in green energy but we don’t have an industrial strategy that supports that. If you really look at where the money’s going into green investment in the UK, we are largely buying equipment and software internationally and installing it here, but the proportion that we’re developing in the UK is too low.”
Earlier this month, Zenobe secured £870m of investment from private equity partners as it looks to expand its electric bus fleet and storage businesses across global markets.
Basden confirmed that “over time,” the company will actively look to diversify its own supply chains to reduce its reliance on China.
His comments follow a softening in the government’s stance on Chinese investment, with former energy secretary Grant Shapps prepared to accept their role in energy projects as long as they were being operated separately, while a vast wind farm that could power over a million homes set to open next year has been partly made with Chinese materials.
Kathryn Porter, energy consultant at Watt Logic, told CityAM the mineral requirements for net zero are “enormous”, with 1 MWh of offshore wind generation requiring around 15 tonnes of copper.
“With many countries chasing the same resources, it is going to be extremely difficult to secure raw materials and supply chains, and China has got ahead of the game by building up not only its own domestic resources and manufacturing capabilities, but exploiting resources elsewhere in the world through strategic use of foreign aid,” she said.
Adam Bell, ex-head of energy at the department for business, energy, and industrial strategy, believed that any realistic efforts to remove China’s influence from the UK’s green energy ambitions will require further state action.
“It is absolutely the case that the UK has been very slow off the starting blocks in developing a full supply chain for batteries, although we are now developing the ability to build some of its components. If the UK genuinely wants to insulate itself from China, that means a radical pivot in the level of intervention Government is willing to undertake,” he said.
The government has been approached for comment.