Britishvolt Collapse Risks UK Being Left Behind In Green Revolution

The fall of Britishvolt wasn’t a huge surprise to those who have been following the company’s progress since its inception. The bold idea of building the UK’s first standalone battery Gigafactory had been facing challenges for some months, and the track record of Great Britain supporting emerging industry is not that commendable. But whatever the problems Britishvolt has been experiencing, the fact that it has been allowed to fail draws a huge question mark about the UK’s prospects for competing as a global economy in the shift towards green technology.

The UK government has been happy to promise £300 million ($360 million) each bailing out British Steel and Tata Steel but won’t spend a fraction of that on a project that could provide 3,000 jobs with a longer future. While it’s great to see a level of concern in jobs for a crucial industry like steel production, this is a traditional business that won’t be growing significantly over the coming decades. Battery electric vehicles (BEVs) had the biggest market share of the UK car market in 2022, bigger than conventional petrol / gas ones, and ten times that of diesel. Despite the end of any government subsidies for consumer BEVs in 2022, sales volumes continued to expand, reaching 16.6% of the market across the whole of 2022. It’s obvious that having no strong foothold in this area of production will end any hopes of the British car industry having a long-term future whatsoever.

Critics of Net Zero claim that we can’t afford to be green amid a cost-of-living crisis, but the exact opposite is the case. We can’t afford not to. Contrary to the opinions of those pushing for fracking and more North Sea oil prospecting, investment in emerging technologies such as renewable energy and BEV manufacturing will safeguard a country’s economy for the future. Uruguay has commendably broken the chokehold of imported fossil fuel energy by switching to renewables, a large percentage of which is now wind turbines. The UK could do just as well, with so much coastline available for offshore wind power. The wind doesn’t blow all the time, but more than 50% of UK power was coming from this source for most of a week in January. Add in a mass energy storage system, and Britain could be much more independent of fluctuating fossil fuel prices.

If the UK doesn’t take the possibilities seriously – and soon – there is a major threat on the near horizon. US President Joe Biden’s Greenhouse Gas Reduction Fund, part of the Inflation Reduction Act, earmarks $20 billion for projects that cut emissions. This is part of a whopping $369 billion in green subsidies from the USA. The EU has responded with its own Green Deal Industrial Plan, which includes up to 250 billion Euros ($270 billion) of subsidies and a relaxation in EU state aid rules for renewables projects. The UK has made no comparable offers.

The US’s investment is still greater than the EU’s, and this “pump priming” will accelerate the adoption of green technology in the USA, putting American companies innovating in this area ahead of Europe and particularly the UK. In fact, there are justified fears that European innovators will relocate to the USA to take advantage of the funding available. That’s with the EU now offering its own subsidies, and much less has been forthcoming from the UK government. Britain risks being fatally left behind.

The International Energy Agency estimates that the green energy business will hit $650 billion a year by 2030, three times what it is now, making it a key growth industry for this decade. In contrast, many are now arguing that we have reached the point of “peak oil”, after which production volumes will decrease. The smart money should be switching away from this declining industry. As consumer car markets continue to move over to BEVs, the demand for fossil fuel in transportation will fall.

Something we should have learned from the war in Ukraine and China’s saber rattling over Taiwan is that we must get away from Russian-influenced oil and gas supplies and our dependence on Chinese dominance in components, particularly batteries. If we don’t, we may find ourselves having to rely on countries that don’t have our best interests at heart.

There is still a prospect that something positive will emerge from the ashes of Britishvolt. The site chosen in Blyth is an excellent one, with a 200MW solar farm nearby, a huge tract of land available, and transportation connectivity. Another company could snap it up, and even Tesla has been rumored to be interested. The UK government needs to heed the warnings and avoid mistakes like this again. Because without a strong footing in the green technology revolution, the British manufacturing economy could end up being a museum exhibit like its iron products from the 19^th century industrial revolution.