In a bid to assess potential risks associated with the United Kingdom's heavy reliance on Chinese clean energy technology, the Department for Energy Security and Net Zero (DESNZ) has commissioned a study from the Royal United Services Institute, a renowned think tank.
The study focuses on four key technologies: photovoltaic components, wind turbines, batteries (for energy storage systems and electric vehicles), and nuclear energy.
DESNZ, in its commissioning document, highlighted the significant challenges European nations have faced in reducing dependence on Russian natural gas since the global energy crisis sparked by the Russia-Ukraine conflict.
Clean energy supply chains are more complex and centralized compared to fossil fuels, with their resilience crucial for the UK's future energy and economic security.
"China holds complete control over the core technologies and supply chains of these clean energy sectors. The high concentration of these supply chains poses risks including external shocks, nationalism, export restrictions, raw material monopolies, political instability, and market manipulation," stated the commissioning document.
It further noted that while China has not yet "abused" its dominant position in the supply chains, the global clean energy industry has benefited from the economies of scale provided by China's supply chains, leading to continuous cost reductions. Hence, the study aims to explore "how to balance these benefits and potential risks."
Last year, the United States passed the Inflation Reduction Act, which explicitly aimed to decrease the concentration of clean energy technology supply chains in China, particularly concerning critical raw materials.
The study's findings are eagerly anticipated as policymakers seek to navigate the delicate balance between reaping the benefits of China's clean energy supply chains and mitigating the associated risks to ensure the UK's energy and economic security.
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