UK Energy Secretary: UK-China cooperation crucial, regardless of who the US president is

Energy security, offshore wind power, energy storage, Contract for Difference mechanism, etc.

Last week, Ed Miliband, the UK Secretary of State for Energy Security and Net Zero, completed his first official visit to China since taking office last year. During the trip, he engaged with senior Chinese officials, visited universities, and toured businesses. For a full breakdown of his meetings, you can refer to the official readout and my personal takeaways.

Miliband also sat down for an exclusive interview with Caijing, a Chinese financial media outlet.

In the interview, he emphasized the importance of UK-China cooperation in tackling climate change and advancing energy transitions. Despite the US' exit from the Paris Agreement, Miliband, a seasoned climate advocate, remains optimistic about global progress on the climate agenda and reiterated the UK's steadfast support for the Paris Agreement, which marks its 10th anniversary this year.

Although nuclear energy is no longer a key topic on the UK-China negotiation table due to security and other concerns, both sides' companies have played significant roles in each other's markets in areas such as offshore wind power and energy storage. Miliband said mutual trade and investment between the two countries can benefit both sides.

Miliband also shared insights on the Contract for Difference mechanism. China has recently proposed a similar settlement framework.

Below is my translation of the full interview. Please note that the third- and fourth-to-last paragraphs appear to convey the same meaning, so I have retained only one of them.

专访英国能源大臣米利班德：中英气候合作至关重要

Exclusive interview with UK Energy Minister Ed Miliband: China-UK climate cooperation is crucial

I. China-UK climate cooperation is crucial

Caijing: As the first UK Energy Secretary to visit China in eight years, what outcomes do you expect from this visit? What does meaningful climate dialogue mean to you?

Miliband: First, let me emphasize the importance of dialogue itself. The climate crisis knows no borders — we all feel the impact of each other's actions, so international collaboration is the only way forward.

No country is more important in this regard than China, given its global standing and potential contribution to emissions reduction. My experience as Energy Secretary from 2008 to 2010 taught me the immense value of building a productive and robust climate partnership with China, and that’s exactly why I’m here.

Firstly, we need to learn from each other on how to achieve a clean energy transition while promoting economic growth, reducing poverty, and ensuring energy security.

Secondly, we face not only political but also technological challenges. UK universities have established excellent partnerships with their Chinese counterparts in addressing these technological issues. It's important that we continue sharing knowledge on how to overcome these obstacles.

We're also exchanging insights on developing net-zero pathways. China aims for 2060, while the UK targets 2050. We have shared our experiences in carbon budgeting and climate change frameworks and hope to formalize this dialogue through regular meetings.

In short, there's a lot we can learn from one another and accomplish through bilateral cooperation. Moreover, multilateral collaboration remains equally essential to tackling this crisis effectively.

(Miliband delivered a speech and took student questions at the Tsinghua University Climate Change Global Lectures on March 15)

Caijing: President Trump withdrew the U.S. from the Paris Agreement. How does this affect global climate progress? At COP30 this year, countries will discuss updated Nationally Determined Contributions (NDCs). The UK has already submitted its new targets. Can the global climate agenda continue moving forward without the U.S.?

Miliband: I believe the global climate agenda will keep moving forward. My experiences here in China, as well as recent conversations with counterparts in India and Brazil, have deeply convinced me that countries remain strongly committed to making progress.

Every country makes decisions based on its own interests. President Trump was elected by the American people and had the authority to make his decision, which we should respect. Equally, we're making decisions based on the mandate given by the British people — we remain fully committed to the Paris Agreement.

Ambitious climate action is crucial for energy security, employment, and future generations, and we hope to work together with other countries on these issues. Although the U.S. has left the Paris Agreement, we’ll continue seeking common ground with them on energy issues wherever possible. Furthermore, within the framework of the Paris Agreement, we’ll maintain dialogue and cooperation with China, India, Brazil, and others.

Overall, looking at the global landscape, I remain optimistic about climate action. During COP29 last year, even though President Trump had already been elected and was about to take office, countries continued their unwavering commitment to climate transition.

It’s like the glass half full: the full half is that the global transition continues, with 90% of countries having set carbon neutrality targets; the empty half is that we are not transitioning fast enough. That’s why we've put forward ambitious NDCs aligned with the 1.5-degree goal.

We obviously want China to demonstrate the greatest ambition possible — China's updated NDC will send a very significant message. From my perspective, the more ambitious China's targets can be, within the context of its own national circumstances and constraints, the better. That will send an incredibly important and positive signal to the world.

China's goal of achieving carbon neutrality by 2060 is an integral part of the global climate landscape, and the world is clearly moving in that direction. Sixteen years ago, when I first visited here, no one talked about "Net Zero" emissions — the UK's target then was just an 80% emission reduction by 2050.

It's easy to feel discouraged because everyone wishes the world were moving faster. But we've actually made remarkable progress. The key now is for those nations determined to advance to keep pressing forward.

As I mentioned earlier, every country makes decisions based on its own circumstances. But looking ahead, I truly believe the momentum for climate action is unstoppable.

Caijing: With the U.S. withdrawal from the Paris Agreement, does this mean there might be more opportunities for cooperation between the UK or Europe and China?

Miliband: Regardless of America's decisions or who occupies the White House, cooperation between the UK and China is very crucial.

Global challenges demand global cooperation — this is fundamentally a collective action problem. If we genuinely want to solve the climate crisis, leading nations must work closely together. I'm deeply encouraged by the prospects for UK-China cooperation, jointly tackling these challenges in pursuit of our shared interests.

II. The answers to energy security and climate change are aligned

Caijing: In recent years, geopolitical factors have increasingly impacted energy prices. Will the UK take a more pragmatic approach to energy security, energy transition, and climate change?

Miliband: From our perspective, being pragmatic about energy security and climate change leads us to the same solutions.

Without domestically produced renewable energy, there can be no energy security. The UK's experience since the Russia-Ukraine conflict began shows that fossil fuel prices skyrocketed. As British natural gas is traded on the global market, North Sea gas prices became as expensive as imported gas, severely impacting households and businesses. The government had to provide £94 billion in subsidies.

Therefore, unless we have domestic clean energy sources that we control, we cannot achieve energy security. The so-called "energy trilemma" has shifted. To us, energy security, job creation, economic growth, and climate action all point toward aggressively expanding renewable energy.

Of course, every country has its own unique circumstances, and this is a crucial aspect of the climate change discussion. We can learn from each other, try to persuade one another, but must respect each nation's specific conditions. From the UK's standpoint, this is our chosen path.

Caijing: The UK plans for clean energy to account for 95% of electricity generation by 2030. But renewable energy is intermittent—how will you ensure the stability and security of the power system?

Miliband: We will maintain gas-fired power plants as backup, but we aim to reduce their share to around 5% or even lower. Only then can we free ourselves from the roller-coaster prices of fossil fuels. The greater the share of renewables in our energy system, the more secure we become.

We will retain over 30 gigawatts (GW) of gas-fired capacity purely as backup. The key point here is that it remains backup capacity. The more we rely on natural gas, the less secure our energy system becomes, as it exposes us to volatile fossil fuel markets. This is why we're prioritizing renewable energy.

Caijing: So these gas-fired plants won't be running at full capacity — they'll just be on standby?

Miliband: Exactly.

Caijing: What's your view on nuclear energy?

Miliband: Nuclear energy is very important. While our power system will predominantly rely on renewable energy, nuclear energy provides crucial support. We support building new nuclear power plants.

We've extended the lifespan of some existing nuclear power stations and are progressing projects like Hinkley Point C, Sizewell C, and the development of Small Modular Reactors (SMRs). Nuclear power is indispensable to the energy puzzle. Moreover, we're not just addressing current needs but also future electricity demand, which is expected to increase by 50% by 2035 and double by 2050. Therefore, we'll need not only more energy but also a more diversified mix of energy sources.

Caijing: In that case, would China General Nuclear Power Corporation (CGN) or other Chinese companies still have opportunities to invest in solving the UK's nuclear power needs?

Miliband: CGN is currently a minority shareholder in the Hinkley Point C project.

Caijing: What about future projects?

Miliband: Aside from that, we currently don't have specific plans for cooperation with CGN.

But I do think there are opportunities for mutual learning, particularly regarding small modular reactors and large-scale nuclear projects. It’s important to cooperate and share experiences in these areas. Of course, each country has its own stance and strategies for ensuring energy security.

Caijing: Given the UK's current energy security strategy, could you clearly state whether Chinese investment in UK nuclear projects remains possible?

Miliband: I believe there are significant investments both ways — Chinese investments in the UK and British investments in China — and there are many promising sectors beyond nuclear energy.

III. The UK needs to build its own clean energy supply chain

Caijing: So, regarding other promising sectors, what opportunities exist for China-British cooperation in clean technologies?

Miliband: There are already several successful examples. For instance, the energy storage project in Wiltshire, invested jointly by China's state-owned companies Huaneng Group and CNIC, and built and operated by Huaneng, is the largest energy storage project in Europe. Similarly, in UK offshore wind projects, Dajin Heavy Industry has provided large monopiles and towers.

Meanwhile, in China, British companies like Wood Group and James Fisher and Sons are involved in operations and maintenance of offshore wind projects. Silverstream Technologies, a UK company producing air lubrication systems to reduce fuel consumption and greenhouse gas emissions, has experienced significant growth recently — primarily driven by the Chinese market — collaborating with Yiulian Dockyards Limited under China Merchants Group.

British businesses can invest in China, and Chinese companies can invest in the UK. Of course, when making these decisions, we pay attention to national security considerations. But I firmly believe there remain many opportunities for cooperation. Bilateral trade and investment can bring mutually beneficial, win-win outcomes for both countries.

Caijing: China produces most of the world's wind turbines, solar panels, batteries, and electric vehicles. As the UK transitions to new energy, does it have concerns about becoming overly reliant on China from an energy security perspective?

Miliband: I'd look at it slightly differently. From our perspective, what the UK needs to do more of is build up our own domestic supply chains.

Historically, to some extent, the UK hasn't placed enough emphasis on establishing our own supply chains and manufacturing capacity. Now, partly because we want to see jobs and economic growth from clean energy, we aim to develop our domestic supply chain capabilities. Moreover, diversifying supply chains is clearly an essential component of security.

Caijing: Does strengthening the domestic supply chain mean it must involve British companies exclusively, or would investments from Chinese enterprises also be acceptable?

Miliband: I think it depends on evaluating each project individually. For example, the energy storage project we mentioned earlier involves investment from the Chinese company Huaneng.

Caijing: This year, China's National Development and Reform Commission and National Energy Administration published a document promoting fully market-based transactions for renewable electricity, including a contract-for-difference settlement mechanism that is somewhat similar to the UK's CfD scheme. The UK has already held six rounds of CfD auctions. Could you share any lessons learned?

Miliband: Contracts for Difference (CfD) have been extremely successful in driving down the cost of offshore wind. When we first introduced CfD auctions, many prominent commentators in the UK believed offshore wind could never compete with natural gas or fossil fuels. But today, offshore wind is among the most competitive technologies, with significant reductions in design, construction, and operational costs. The CfD mechanism has played a pivotal role in facilitating these cost reductions.

For newer technologies, the situation can be more complex. Emerging technologies might require more direct innovation funding, and CfD may not always be the most suitable incentive at that stage. They may not necessarily deliver the same clear cost reductions that offshore wind achieved through CfDs at precisely the right moment.

We are also currently reviewing some technical details of the CfD scheme. One major topic is how the budgeting system operates, as well as the appropriate length of CfD contracts, currently set at 15 years. We're assessing whether that remains the most beneficial duration for consumers.

Overall, CfDs have proven to be a highly effective mechanism. We would be delighted to share our experiences and lessons learned in this area to achieve mutually beneficial outcomes.