China’s hold on solar energy – POLITICO

LONDON — Warmongering Conservative MPs frightened by China’s influence in the United Kingdom have a new concern to add to the list: solar energy.

China controls 80% of the global solar manufacturing market, including finished solar panels and the raw materials needed to build them.

The UK has ambitious plans to increase its use of solar energy over the next decade, aiming to increase from 15 gigawatts of annual output today to 70 gigawatts by 2035.

But it has no national production capacity. This means UK imports of solar energy from China are worth hundreds of millions of pounds each year – and are expected to grow further.

Conservative MPs now fear this reliance will jeopardize Britain’s clean energy targets, while directly exposing the UK to a supply chain hit by allegations of human rights abuses.

China has a “stranglehold” on the global supply of solar technology, said Alexander Stafford, a Conservative MP who sits on the parliamentary committee on energy security and net zero.

This reliance on a single supply chain leaves the UK “dangerously exposed to not being able to reach net zero”, he added.

Net zero risk

The total value of solar panels exported from China to the UK in the first half of 2023 alone is almost £300 million, according to research by energy think tank Ember.

Forty-five percent of UK imports of solar modules came from China in 2022, according to another think tank, the China Strategic Risks Institute (CSRI).

“The government must look to secure our supply of essential minerals and equipment, expand domestic supplies and work more closely with our international partners, otherwise we risk losing our lead (in clean energy),” Stafford said , who is also vice-chair of the All-Party Parliamentary Group on Critical Minerals.

Another Conservative MP on the energy committee, Mark Pawsey, shares these concerns.

“There is a danger in having only one source of supply,” he told POLITICO. “I think the Chinese have the capacity and the volume, but I would be happier if we had a broader source of supply. We could find ourselves in a situation where, for one reason or another, China becomes less enthusiastic about supplying the UK market, and where would we go then? How could we achieve this goal (net zero emissions)? »

Reducing the UK’s dependence on China is the right goal, experts say. But it’s easier said than done.

“There is no simple answer to the question of how much dependence on Chinese solar panel imports is too high,” said Bernice Lee, a research director specializing in climate change and international business at Chatham House Research Institute.

In balancing their supply chains, governments around the world must address concerns such as energy security, industrial policy, costs, procurement, working conditions and human rights, stresses -She.

“It is also about meeting climate targets, not least because price could affect, or even determine, the speed and scope of implementation,” she added. This is in line with Downing Street’s approach, which focuses heavily on the risk of passing on higher costs to British households in their quest to reduce carbon emissions.

The here and now

Not everyone is convinced that British politicians should panic.

Asked about supply chains by the Commons energy committee in October, Chris Hewett, boss of trade body Solar UK, pointed out that Chinese imports already play an important and often uncontroversial role in the domestic market. . “Do we make mobile phones in the UK? No, we don’t,” he told the committee. “There are some things that other countries are better placed to do. »

MPs should also focus on “the technology of the next decade” which could be developed closer to home, he said.

For its part, the Department of Energy Security and Net Zero highlighted two initiatives – the government’s critical minerals strategy and its work with industry leaders on the Solar Taskforce – which it said “will support increased deployment of solar panels, improve country resilience.” our supply chains and help us achieve the UK’s net zero ambitions.

But in the meantime, China has “a history of wielding its economic clout to achieve geopolitical goals,” said Andrew Yeh, deputy director of the CSRI. And a breakdown in diplomatic relations between the UK and China “cannot be ruled out”, he said, with immediate knock-on effects for the UK’s solar goals.

Beware of the “dump”

Government ministers, while recognizing the “systemic and historic challenge” posed by China, insist that pressing global concerns such as climate change cannot be addressed without them.

But the growing reliance on Chinese imports comes at a time when relations between the UK and China are deteriorating and a group of increasingly vocal Tory Faucusists are pushing for Prime Minister Rishi Sunak to adopt a harder position.

The UK must not allow itself to become a “dumping ground for inhumane solar energy made in China”, Alicia Kearns, Conservative chair of the cross-party Foreign Affairs Committee, told POLITICO. International solar markets get 89% of polysilicon and 60% of lithium – crucial raw materials for solar panels – from China, Kearns said, with both minerals “produced by persecuted Uyghurs working in slave-like conditions.” .

She called for “strict import controls” on Chinese solar imports, citing both a “strategic imperative and a moral duty.”

There is also the inconvenient fact that China continues to be one of the world’s biggest polluters. MP Tim Loughton, a former Conservative minister, said it was “a great irony” that the country producing “by far the largest proportion of greenhouse gases, fueled by its vast dependence on highly polluting coal-fired power plants, has also become the main producer of greenhouse gases. solar panel pusher.

Time to make new friends?

Of course, this dependence does not only raise questions for the government. Opposition Labor leader Keir Starmer previously told POLITICO that the UK needs to ‘wean itself off’ China ‘on trade and technology’ – but his party’s green goals are even more ambitious than those of the conservatives.

Labor MPs are “looking at the situation closely”, said Sarah Champion, Labor MP and chair of the International Development Committee. She accused the government of “short-term thinking” by not taking advantage of alternative markets.

And there are potential solutions, says Andrew Yeh of the CSRI, who argues for a “de-risking incentive” in the UK’s exposure to China. This could include embedding “minimum supply chain resilience standards” into the UK’s flagship auction system for contracts for difference for renewable energy, or increasing solar deals with countries “low risk”. Yeah, we call it “friend relocation”.

Britain could also look to the United States, suggests Energy Committee member Mark Pawsey. “If the Inflation Reduction Act means the United States becomes a big producer or there are other markets we can go to, I would say that would be a good thing,” he said. -he declares.

The governments of the United States and the European Union have invested in solar production and set national targets, notes Chatham House’s Lee. But the UK is still lagging behind.

“Given the time it would take for them to come online and the growing demand for these products in a crowded market, this is not necessarily an immediately available alternative source,” he said. she declared. “In summary, it is not clear that the UK has many alternatives (to China) in the short term.”