The global energy transition as an industrial revolution

The UK can reap significant benefits from the global energy transition. It needs to do so strategically

In the foreword of the Clean Power 2030 Action Plan: A new era of clean electricity published in December 2024, UK Energy Secretary Ed Miliband states that “This plan […] is also about creating the sort of country that we know people want to see - reindustrialising our heartlands with good jobs and tackling the climate crisis”.

The report “UK Economic Opportunities from the Global Energy Transition” produced by Ricardo before the UK General Election 2024, informs these ambitions and shows that potential is vast. Ricardo experts, leveraging available evidence as well as top-class modelling by their energy modelling team in Athens (with their GEM-E3 model), authored for the UK Department for Energy Security & Net Zero (DESNZ) an analysis of the opportunities for the UK to capture market share in globally growing new clean energy technologies markets.

As the world accelerates its shift towards cleaner energy, the UK finds itself at a crossroads. With strong capabilities in renewables, nuclear, and carbon capture, the UK has significant potential to expand its market share in key energy transition sectors. However, challenges such as trade barriers, supply chain bottlenecks, and global competition could slow progress.

Key growth sectors for the UK

The study assesses the potential market size growth and UK future market share for seven key priority sectors that will shape the UK's future in clean energy. It deep dives into a selection of technologies within each sector, analysing the UK competitive advantage in each of these. 

• Renewables – The UK’s leadership in offshore wind, particularly fixed-bottom installations, gives it a competitive edge. However, slow permitting and supply chain constraints remain obstacles.
• CCUS and Greenhouse Gas Removal – The UK has mature supply chains and R&D strengths in carbon capture, but infrastructure gaps and regulatory uncertainty limit full-scale deployment.
• Hydrogen and Biofuels – The UK is well-positioned for engineering and implementation services for salt caverns and gasification technologies, but it faces stiff competition from China, Japan, and India.
• Nuclear – The UK is advancing in Small Modular Reactors (SMRs) and High Temperature Gas Reactors (HTGRs), which could become strategic exports.
• Smart Systems – While the UK leads in energy network innovations, its lack of domestic power electronics manufacturing could hinder growth.
• Heating and Cooling – The UK is investing in heat pumps, but competition from larger markets like the EU and US poses challenges.
• Industry – The UK has strengths in hydrogen fuel switching and chemical recycling, with robust policy support and incentives.

Early-mover or fence-sitter?

The study also covers analysis of existing evidence through case studies to highlight the benefits and disbenefits of being an early mover in some clean energy technologies. 

Historical case studies show mixed results:

• Denmark’s early investment in heat networks helped it dominate the sector.
• France’s nuclear push made it a leader, but competing technologies are now challenging its position.
• Morocco’s investment in solar power drove local industry growth but faced competition from cheaper solar PV alternatives.

For the UK, early investment could unlock leadership opportunities, but there is also a risk of backing the wrong technology and losing out to global competitors.

A faster transition reduces costs

The study also finds that the speed of the energy transition affects technology costs. More ambitious net-zero targets drive higher investment in R&D, leading to cost reductions—especially for emerging technologies like hydrogen and EV batteries. Meanwhile, mature technologies like wind power have less room for further cost declines.

The path forward

For the UK to maximize its competitive edge, it must:

• Prioritize sectors where it already has a strong foundation (i.e. offshore wind, nuclear, CCUS, etc.).
• Address trade and regulatory barriers that slow deployment and exports.
• Invest strategically, ensuring that early bets align with global trends and cost competitiveness.

The global energy transition presents both opportunities and risks. By making smart investments and fostering innovation, the UK can strengthen its position as a leader in clean energy.

Further information 

• Download Ricardo's report for DESNZ: UK Economic Opportunities from the Global Energy Transition
• Get in touch to discuss how we can support you to navigate the energy transition
• Find out more about how we support organisations with their energy transtion