Britain’s drive to cut its reliance on imported fossil fuels is creating a new energy security question – how dependent should the country become on Chinese solar panels, batteries and other clean energy technology?
The issue is highlighted by Cleve Hill in Kent, Britain’s 370MW solar farm. According to an investigation by The Telegraph, its approximately 550,000 solar panels were manufactured by Chinese company Trina Solar, while its battery systems and inverters come from CATL and Huawei respectively.
The project is an example of a much wider global supply-chain concentration.
The International Energy Agency estimates China controls around 85% of global solar manufacturing capacity and roughly 80% of lithium-ion battery supply-chain production.
Its share is even higher in some areas, including around 95% of solar wafer manufacturing and 97% of battery anode material production.
That creates a tension at the heart of Britain’s energy strategy, the Government argues expanding home-grown wind and solar will reduce exposure to volatile international gas and oil markets.
But much of the equipment needed to build that new system is itself imported.
The Government’s own Solar Roadmap accepts Britain is unlikely to compete directly in mass production of conventional solar panels and instead wants to develop domestic manufacturing in areas including balance-of-system equipment, batteries and new solar technologies.
Its battery strategy also acknowledges the UK currently meets most demand for batteries and components through imports, with China its largest source of lithium-ion batteries.
In 2022, Britain imported nearly £1.8 billion of lithium-ion battery packs, around £900 million of them from China.
The issue is not simply where equipment is manufactured, there are supply chain concerns too with our increasing dependence on a small number of overseas suppliers, which creates potential exposure to trade disputes, export controls, supply disruption and geopolitical tensions.
Cybersecurity is another concern as increasingly sophisticated inverters, batteries and other grid-connected equipment become part of critical electricity infrastructure.
However, rapidly replacing Chinese equipment would not be straightforward, China’s huge manufacturing scale has helped drive down the cost of solar panels and batteries, making renewable projects cheaper and faster to deploy.
The challenge for Britain is therefore not necessarily to manufacture everything domestically but to decide which technologies are strategically important enough to require UK production or more diversified supply chains.
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