A clean energy supply chain strategy for UK manufacturing

The clean energy transition isn’t only about deploying clean technologies – it should also be seen as an industrial opportunity. A key focus must be on where and how clean energy technologies are made. For the UK, achieving net zero in a way that strengthens energy security and delivers economic value will depend on building domestic manufacturing capacity for those technologies when and where possible. 

Yet scaling clean energy manufacturing presents a familiar challenge, with investment risks highest precisely where strategic value is greatest. Capital costs risk contingency are high, demand can be cyclical, and global competition is intense. Left to the market alone, many of the factories that the UK and Europe needs won’t be built at the speed or scale required.

This creates a clear role for public intervention and a specific opportunity for Great British Energy (GBE). By strategically absorbing early-stage risks and shaping demand, GBE can help unlock private investment in clean energy supply chains using hybrid public-private models similar to those now emerging in project development. 

Why secure clean energy supply chains?

From the pandemic to geopolitical tensions, recent shocks have exposed global supply chain fragility. For energy systems, this translates directly into risk. While complete decoupling is a mirage, a clean energy transition that relies too heavily on imported technologies leaves the UK exposed to trade restrictions, and supply bottlenecks. It also fails to capture the potential industrial opportunity that emerge when a country leads a transition.

Strengthening domestic clean energy supply chains delivers three strategic benefits:

• Economic value and jobs, anchoring skilled employment and revitalising industrial regions
• Energy and technology security, reducing exposure to external shocks
• Long-term competitiveness by linking manufacturing and innovation

Crucially, domestic supply chains also ensure that the energy transition delivers visible community and economic benefits, reinforcing public support for net zero. 

Overcoming high stakes and costs

Despite these benefits, clean energy manufacturing remains difficult to finance. New factories require substantial upfront investment in equipment, workforce training, and supply contracts—often years before revenues materialise.

Investors face several layers of uncertainty, including:

• Cost competitiveness. UK facilities must compete with global incumbents that benefit from scale, subsidies, or lower input costs. China’s dominance in rare earth and other critical mineral processing puts Chinese manufacturers at a competitive advantage. As a result, materials costs for wind turbine production in OECD countries are almost 40% higher than in China.
• Technology risk. Manufacturing and product designs continue to evolve rapidly. A factory may rapidly be exposed to a global competitors operating in more innovative environment. According to Ember Energy’s 2025 China Energy Transition Review, Chinese companies submit about 75% of global clean energy patent applications. BYD, China’s leading battery and electric vehicle manufacturer reportedly employs over 130,000 research engineers. 
• Skills and delivery risk. Capacity expansion depends on trained worker availability and timely permitting.

When these risks accumulate, required returns rise and projects stall. This isn’t a failure of markets, but rather a signal that local manufacturing is not sufficiently priced in, and risks are misallocated. 

De-risking investment in UK manufacturing

Just as hybrid public-private partnerships are emerging in clean energy project development, a similar approach can be applied to manufacturing.

Under this model, GBE plays a targeted early-stage role, addressing the risks that private investors struggle to bear alone. In effect, the same logic now being applied to clean energy projects can be extended upstream to the factories that supply them. This may include:

• Co-investing patient capital in strategically important facilities
• Supporting early demand through anchor offtake or aggregation
  
• Underwriting specific risks, such as first-of-a-kind manufacturing processes
• Accelerating planning and permitting for priority sites or clusters

By intervening early, GBE helps move manufacturing projects from concept to investable proposition. Once risks are reduced and demand is clearer, private capital can scale delivery, bringing efficiency, innovation, and operational expertise. This approach doesn’t replace markets; it enables them to function in areas where strategic value exceeds immediate commercial returns. 

From strategy to spades in the ground 

Recognising that supply chains are strategic assets, the UK has already taken important steps with the creation of GBE and the UK Infrastructure Bank. The challenge now is successful execution, which will depend on focus. The UK is unlikely to dominate commoditised manufacturing overnight, but it can build strength in areas aligned with domestic deployment and comparative advantage—from offshore wind foundations and grid equipment to hydrogen systems and advanced power electronics.

Flexibility will also matter as technologies and markets evolve, and international collaboration is key. Building domestic capabilities doesn’t reflect an isolationist stance because resilient supply chains can coexist with trusted trade and export ambitions.

Securing and scaling clean energy supply chains is key to future-proofing the transition. As the UK builds a new energy economy, it needs to shore up its own industrial muscle and know-how. The experience of the U.S. Inflation Reduction Act abroad shows that policy can ignite and break a manufacturing renaissance. The UK now has the chance to craft its own version through a combination of investment, incentives, and industrial strategy that delivers green growth. By using its balance sheet, mandate, and convening power to absorb early risk and secure private capital, GBE can turn clean energy supply chains from a vulnerability into a national strength.