Pick Your Poison: China in the UK Energy System

Former head of MI6 Sir Richard Dearlove made the front page of The Times on 13 January with comments that the UK government’s target of producing 95% of the UK’s electricity using clean energy technologies ‘hands power to Beijing’. Dearlove said in an interview on Times Radio that net zero was ‘ideological’, before turning to ideology himself to argue that energy systems based on renewables are ‘short-sighted’ and create a ‘disordered energy system’, stating that dependence on nuclear power and gas should be considered as an alternative.

The comments reflect a strand of thinking in part of the security community that the threat from the concentration of many renewable energy and electric vehicle (EV)-related markets in China is so severe that the current decarbonisation strategy based heavily on renewables and EVs should be abandoned. Instead, UK consumers must absorb the very substantial cost increase and years of delay associated with developing alternative supply chains, some combination of nuclear and gas should be adopted (as proposed by Dearlove), or net zero should be abandoned all together (as proposed by Reform UK) – presumably entailing either very high dependence on gas or the return of coal plants which were recently shut down.

No Easy Answers

Dearlove is correct that the UK’s China strategy – going beyond just clean energy – is incongruous, failing to reconcile warnings from security and foreign affairs officials about the threat the country poses with its position as an investor, trade partner and, increasingly, source of technology. But the reality is that the UK, and the rest of the world, is in a period of technological flux that must be navigated at a time of geopolitical and economic stress. Any pathway taken to sustain UK energy supply, including abandoning net zero, has risks and leaves the UK to some extent geopolitically exposed.

In 2021, before Russia’s invasion of Ukraine, gas power plants set the price of electricity 97% of the time. In the second half of 2023, this took UK electricity prices to 93% above the UK–EU median price, leaving the UK with the highest cost of electricity in Europe. Dependence on gas, both in Europe and globally, has restricted Europe’s political scope to pressure Russia. 2024 saw imports of Russian LNG to Europe hit record levels, accounting for 19% of the continent’s LNG supply. No restrictions are currently in place on the import of Russian gas to Europe. Beyond Europe, the transit of sometimes suspect, sometimes under-insured, and sometimes unsafe Russian oil and gas vessels through European waters has been allowed to continue broadly unchallenged to avoid a backlash from gas users in the rest of the world.

At the same time, US President Donald Trump’s threats that Europe should buy US gas or face tariffs, as well as price spikes following strikes in Australia, are a reminder that swapping one dependence for another is not risk-free. That said, Labour’s 2030 clean power plan does create new risks relating to the gas sector, particularly around financing infrastructure, which will still be needed for heating and to keep the lights on when wind output drops in winter.

Ambitions for nuclear power are long-term and speculative and come with a cost both financially and in terms of risk. Of the 52 nuclear reactors that have started construction since 2017, 25 are Chinese-designed and 23 are Russian-designed. No reactors designed outside Russia or China have begun construction since 2020, and Russia is the leading global exporter through its state company Rosatom. Decoupling from Rosatom is already proving a challenge. Ongoing nuclear projects are expensive and unpredictable, particularly in the UK, and while small modular reactors (SMRs) have shown promise for more than a decade, they have not reached technological or commercial maturity. Currently, two SMRs operate in China and there are several floating SMRs in Russia, with none in operation elsewhere. Meanwhile, 43% of uranium is produced by Russian-influenced companies in Kazakhstan, and a further 8.6% by Russia and China.

Are China’s Energy Activities a National Security Threat?

Interactions with China over energy are hugely complex and span a massive array of commercial and political relationships. However, for the purposes of this article, the challenges posed to the UK are loosely separated into three aspects: the national security challenge, the long-term geopolitical challenge, and the supply chain challenge.

National Security

Dearlove’s most cogent arguments in his Times Radio interview were in relation to national security. There are clearly some immediate national security risks to mitigate. These relate to the use of smart vehicles – not only EVs – for sensitive assignments, including transporting senior government officials and ministers and in covert or military operations. Security concerns relate to access to location and sensor data and vehicle control systems, both by malign hackers – whether state-sponsored or criminal – and insider threats in the supply chain.

For the general public, data security is less challenging – mobile phones, smart speakers and other devices already continuously monitor and share location, sensor and other data. However, none of these devices cause an immediate danger to life if suddenly disabled, showing the risks of relying entirely on software for critical driving functions – something which is not necessary for the functioning of a smart or electric vehicle, but is in some cases being introduced in steer by wire technologies.

There may be energy security risks associated with depending on Chinese companies to manufacture and operate power plants, particularly wind or nuclear power plants. Regulators can typically step in to ensure the continued operation of a plant in extremis, but this requires a third-party operator willing to take on operation. As there are currently no requirements to disclose details about, for example, the specification of wind nacelles – the housing for the key equipment such as the generator and gearing at the top of the tower – third parties may be reluctant to take on the liability associated with operation. Furthermore, a new operator would remain dependent on software updates from the original equipment manufacturer.

Dependence on Chinese components in wind farms is less likely to pose a risk if best-practice cyber security is adopted and manufacturers have adequate inventories of spare parts. Wind farm systems are typically isolated from the internet, with information coming into or out of the system controlled by the operator. In theory, this means that software updates can be vetted. In practice, malicious code might be missed, but this would be true regardless of the provenance of the component vendor, as evidenced by airport shutdowns following CrowdStrike updates and the SolarWinds cyber attack.

Long-term Strategic Challenge

China has created the world’s largest market for the next generation of critical energy technologies. In 2024 alone, China added 277 GW of solar power and 80 GW of wind, in contrast to 2.7 GW of total renewable capacity added in the UK and 66 GW of solar and 15 GW of wind across the entirety of the EU. 49% of vehicle sales in China were electric or plug-in hybrid in 2024, amounting to 11 million vehicles. Meanwhile, 28% of new vehicle registrations in the UK were hybrid or electric – a total of 549,148 vehicles – while for the EU the figure was 20.7%, or 2.2 million vehicles.

China is reaping the benefits of moving earlier and faster to create a market at scale and shielding it from international competition. It is not surprising in an industrial transition that as the Chinese market has saturated, excess manufacturing capacity has become available for export at low cost. Europe, the UK and the US have failed to create a comparable demand for clean energy technologies or to secure access to the Chinese market, leaving their industries lacking investment, scale and, consequently, competitiveness.

In this sense, the increased ambition from the new UK government will contribute to reducing risk, but others must follow for the approach to work. The Clean Power Alliance may help at the margins, but with the US seemingly headed towards energy policy chaos under the Trump administration, the UK needs the EU to move faster. Failure to do so will leave China as the – or one of the – dominant manufacturers of all of the technologies that will see the most growth and be most important for energy systems over the next two decades (batteries, EVs, nuclear, solar photovoltaics and wind). This will give China outsized influence over the governance and norms of these markets in the future.

Supply Chains

The threat to supply chains, aside from the national security challenges already discussed, is mostly related to the UK’s ability to meet its policy targets rather than national or energy security. The benefit of renewable technologies is that they behave like infrastructure assets: once installed, they do not require a supply of fuel to operate. Consequently, parts of the supply chain becoming unavailable or more costly will not have an immediate impact on energy security. The main risk is to the government’s ability to deliver energy policy as it intends, as it could potentially be forced to depend more heavily on more costly technologies, life extensions for aging plants or imports, with knock-on impacts on energy costs and greenhouse gas emissions.

Dependence on China comes with challenges over supply chain transparency and ethical standards, particularly around forced labour, working conditions and environmental protections – both in China and abroad. Several initiatives are underway to improve performance and transparency, driven most effectively by the EU, but much more could be done. The UK has a role to play as the host of the London Metals Exchange and a hub of mining finance and sustainability expertise, in addition to its role as a consumer, and these challenges should not ultimately be insurmountable. However, the concentration of production in China means consumers have less leverage to improve accountability and performance.

China has also proven a vulnerable supplier in recent years, even aside from tensions between the West and the Chinese government. China is heavily exposed to climate risks associated with drought (impacting hydroelectric generation) and flooding. Disruption to shipping in the Red Sea shows the vulnerability of logistics, while the Covid-19 pandemic revealed the potential of unexpected events to hit supply chains.

Conclusion

There are risks associated with some clean energy technologies and the concentration of much of their supply networks in China. However, the risks do not currently appear sufficient to require that the UK government deviates from its 2030 clean power mandate and the energy mix recommended by the National Energy System Operator, or the government’s ban on the sale of new petrol or diesel cars, whether in 2030 or 2035. Indeed, these plans may contribute to addressing some of the long-term strategic and supply chain risks, which will in turn help alleviate national security concerns. There will be risks in the energy transition whichever pathway is chosen and these might best be mitigated by a focus on transmission, interconnection and energy efficiency, which reduce risk exposure come what may.

The UK is not in the position of the US, where it can draw on huge reserves of oil and gas, and the US may itself come to regret letting its automotive and other industries wither, should EVs play the role forecast for them by institutions such as the International Energy Agency. Nuclear remains mired in a regulatory and design quagmire from which it may not escape for some time, and is also heavily concentrated in Russia and China. If a poison must be picked, the UK government is justified in not abandoning its energy and environmental objectives on the basis of security concerns resulting from China’s market dominance in clean energy.

© RUSI, 2025

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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