Octopus Energy chief Greg Jackson: The world isn’t ready for China’s clean energy tidal wave
Bickering amongst policymakers and industry is setting the UK way behind China in the drive towards clean energy, the head of one of the UK’s largest energy providers has said.
Speaking to City A.M. at London’s International Energy Week conference earlier this week, Octopus Energy chief executive Greg Jackson said the UK’s journey to 2030 and beyond will continue to be hampered until activity is prioritised over endless discussion.
“What we need to do is just learn that we need to stop mucking around and bickering about the details and get on with it, or we will be subsumed,” he said.
“The scale of the transition and the countries that are just getting on with it, including obviously China, is astonishing.
We are not ready – very few people are ready – for the tidal wave of innovation that’s going to come out of China in clean energy
Greg Jackson
Jackson’s comments follow a two-year bull run for green energy in China of extraordinary proportions.
It is estimated that the country spent $546bn (£431.9bn) in 2022 and around $890bn (£703.8bn) last year on green energy sub-sectors including solar, battery technology and wind farms.
The latter is of keen interest to Jackson and Octopus Energy, which, after only two years in the market, has built a 15-country-strong investment portfolio of offshore wind projects and committed billions more in capital spending over the coming years.
Jackson’s comments come at a difficult time for the offshore wind industry, which investors and policymakers had championed until higher interest rates, overly ambitious expansion plans and supply chain disruption combined to form a perfect storm for the industry.
Ironically, while developers like Orsted, which posted a set of disastrous full-year results ridden with impairment chargers and planned market exits, are staring down an uncertain future, one of the wind sector’s most vital subdivisions is enjoying a boon.
Turbine manufacturers such as Siemens Gamesa and Vestas, the Orsted of the turbine world, were bleeding cash in 2020-21 trying to fight inflation, but now new projects are being green-lit these companies are making a comeback with higher prices offsetting increased costs.
China, the next big challenge
And developers cannot simply go elsewhere – the wind sector is heavily geopolitical so China, the world’s leading offshore wind player, and its technology is off the table.
Technology that happens to be superior, too, with firms like MingYang owning turbines capable of generating 18-20 MW of power – the West’s leader is Vestas with a 15GW turbine.
Jackson is well-versed on the technology gap between West and East, adding that in a world-first, Chinese firms are now automating the turbine manufacturing process.
There’s an endearing impatience in the way Jackson talks about the UK’s energy sector that seeks to put the politics and minutiae to the side and just move quicker on everything.
“I’d love to see a lot more of the more established technologies like onshore wind and solar moving to merchant world and not being run by the government,” he said.
“If there’s a market for electricity, we can build a wind farm and we don’t wait for governments to define auctions and define what kind of technology should be based where – it’s crazy the amount of central planning in energy.”
An election year notwithstanding, he wouldn’t be drawn into political hypotheticals despite the undeniable impacts on his role as the head of one of the UK’s fastest-growing and most successful companies.
For him, the energy transition in the UK is “like pushing water uphill,” thanks to outdated policies, rules and market structures, regardless of the colour of Westminster, but adds that he is “always impressed” with his regular conversations with politicians across the board including Rishi Sunak and Keir Starmer.
Whatever November’s result, the Octopus Energy chief is sure of one thing.
“The countries that are getting on with this are benefiting from cheap, clean power and we are going to be playing catch-up,” he said.