As many will know the key problem with renewable energy is its intermittency. When the sun doesn’t shine, and the wind doesn’t blow, then there is no power. The current state of affairs is that when that happens the gas power stations are fired up and we can all put our kettles on.

As gas is a fossil fuel the Government plan is to eventually phase this out and I have struggled with this as it does leave something of a gap for when the renewables are becalmed. Add to this is the push to electric vehicles for which lithium-ion batteries are also the backbone of energy storage. Storage of electricity in large scale battery plants is one of the key factors in Government strategy and this (depending on how optimistic you are) may be between 13GM and 30GW by 2030. This would be a sizable contribution to any hole left by gas. 

The current issue with gas (aside from the environmental concerns) is that it is being sourced from some fairly unsavoury sources (e.g. Russia), which affects prices and supply. However, replacing this with battery plants may not be the panacea. At the moment, seven companies provided 86% of the world’s supply of batteries. Of that, over half are Chinese. In fact, 37% of the world’s supply of batteries is by one company – CATL, a Chinese company which supplies many of Tesla’s batteries.

In fact, Europe has almost no meaningful battery manufacturers. Northvolt (Swedish) is probably the biggest but is tiny compared to the Chinese companies. What does that do for UK energy security? The UK has some plans to build some “Gigafactories”, but almost none are homegrown. Britishvolt was closed due to an inability to attract private and public funds, and ATME Power was pre-packed (by FRP Advisory) to Lionvolt, a Dutch firm in Feb 2024.

The issue is that they require huge capital investment and an optimism/confidence that they will come good. The Chinese seem to have been happy to take that risk, but British capital and Government has been more reluctant to allocate cash on what might be a speculative investment. The UK clearly has a lot of technical know-how, but the risk profile seems too difficult.

To make matters worse, even if a British battery maker can be built the key ingredients for batteries are lithium, cobalt and nickel. The UK is almost entirely dependent on imports of the critical minerals, resources which are concentrated in a few countries such as China and the Democratic Republic of Congo.

So, in 20 years’ time the UK may find that we are free of Russia, but stuck with China…