IS FLOATING OFFSHORE WIND THE FUTURE OF UK-CHINA COOPERATION ON RENEWABLE ENERGY?
When it comes to international relations, many focus solely on the loud noise and high drama of politics. What those commentators may be missing is the quieter, but no less important role of business and commercial relationships. How do British and Chinese people actually work together?
China is the UK’s third-largest trading partner. The UK and China have a £118 billion trade relationship, which increased by 11.3% year on year in 2021. In many ways, this is a statistic about trust. It shows that there are large numbers of Chinese and British people who know that each one offers a solution to the other’s problem. Even where two people live totally different lives, win-win collaboration can take place.
So, forgetting the “hot air” of politics for a moment, let’s consider the strong winds which will power both country’s energy grids, from Hainan to the Humber. The China-UK partnership in renewable energy is how I think we can strengthen our cooperation during 2022.
Why is cooperation on renewable energy important to both China and the UK?
When President Xi Jinping and Prime Minister Boris Johnson spoke during their phone call in the autumn of 2021, they agreed that working together to achieve the transition to a carbon-neutral energy system is a top priority for the UK-China bilateral relationship. A high domestic capacity for renewable energy has many benefits, including a reduction of harm to the population and economy from the effects of climate change and pollution, enhanced energy security, and greater technical capability.
Following the UN Climate Change Conference of Parties (COP26), hosted by the UK in Glasgow, President Xi wrote to PM Johnson stating that “accelerating the green transition” was a priority for China in tackling climate change. President Xi stated that “successful governance relies on solid action”, expressing a hope that all parties “will take stronger actions to jointly tackle the climate challenge and protect the planet, the shared home for us all.”
As shown at COP26, solid action and international collaboration is key to the UK approach as well. The UK was the first major economy to make our commitment to reaching net zero carbon emissions by 2050 legally binding, and energy transition is central to our industrial strategy. In our Nationally Determined Contribution (NDC), we have committed to reducing greenhouse gas emissions by at least 68% compared to 1990 levels before 2030. As Boris Johnson said to global leaders at COP26, we must “get to work with all the creativity, imagination and goodwill that we possess.”
How are the UK and China cooperating to build renewable energy capacity?
Fortunately, the UK and China are building from a strong base of existing collaboration. China’s National Energy Administration and the UK’s Department for Business Energy and Industrial Strategy host an annual UK-China Energy Dialogue that will reach its 10th session in 2022. British Embassy Beijing and the China Renewable Energy Industry Association, in partnership with the China Renewable Energy Engineering Institute, hosted the UK-China Industry Advisory Group on Offshore Wind in 2015, which will reach its eighth session in 2022. In addition, Vice Premier Hu and Chancellor Philip Hammond committed “to deepen the clean energy partnership, and support a structured energy transition” during the 10th UK-China Economic and Financial Dialogue in 2019.
Over the past decade, the UK and Chinese governments have jointly supported wide-ranging policy and market cooperation. We have supported collaboration on green finance and facilitated knowledge-sharing on innovative market mechanisms. This includes the UK’s Contract for Difference (CfD) competitive auction, competitive power market design and regulation, carbon trading, and renewable energy incentive schemes.