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UK household energy bills could jump by more than a quarter in January, adding around £460 extra a year for a typical home. As world leaders gather in Antalya, Turkey, for the COP31 UN climate summit, energy and climate policy has become the front line in a contest between two energy superpowers, leaving countries like the UK squeezed in between.
The Two Superpower Bets
America is focusing on fossil fuels, pumping record volumes of oil and gas and pressing allies to buy them. Meanwhile, China is focusing on electrons, flooding the world with solar panels, batteries, and electric cars to replace those fuels. Whichever bet wins will shape global energy prices and the speed of emission cuts.
The UK buys nearly a quarter of its imported gas from America and much of its clean energy equipment from China. As a result, the government faces difficult choices between drilling for more oil and gas or building renewable infrastructure.
The Case for Drilling
The UK government recently approved a new North Sea gas field called Jackdaw. Ministers also face a decision on Rosebank, west of Shetland, which would be the UK’s largest undeveloped oil field. Conservative leader Kemi Badenoch and Reform UK’s Richard Tice have argued that using domestic gas is the only way to protect families from rising bills.
However, Energy Secretary Miatta Fahnbulleh stated that producing more British oil and gas does not bring bills down because the fuel is sold on global markets. Critics like Tessa Khan of Uplift argue that projects like Rosebank do nothing for energy security while sending a dangerous signal about climate commitments.
The North Sea is in long-term decline, with output falling by more than two-thirds since 1999. The government recently introduced a bill to write its ban on new exploration licences into law, though Rosebank is exempt because it is already licensed.
The Case for Electrons and the China Question
The alternative is to build more renewables. Wind turbines and solar panels require upfront investment but can generate electricity for decades without fuel shipments. The Climate Change Committee calculated that a future price shock would push bills up by 59% on a high-carbon path, compared to just 4% if focused on renewables.
However, global inflation, higher interest rates, and the need for expensive new electricity networks have driven costs up. Furthermore, gas-fired stations frequently set wholesale power prices, meaning renewable savings are not always reflected in customer bills.
At the same time, the UK faces a dilemma over China’s dominance in clean technology. In March, the UK blocked Chinese wind turbine maker Ming Yang from opening a £1.5bn factory at Whiteness Head, citing national security. When asked if Britain was swapping dependence on petrostates for dependence on Beijing, Fahnbulleh acknowledged the reliance while noting the UK has a diversified global market and wants more equipment made domestically.
As the US has formally left the Paris climate agreement and is not attending COP31, China is stepping in to fill the space. Chinese companies are increasingly driving the global energy transition, leaving the UK to navigate hard choices as household budgets remain stretched thin.
