On 30 September 2024, Britain closed its last coal-fired power station. Ratcliffe-on-Soar in Nottinghamshire — four generating units, two gigawatts of capacity — switched off for good. It was treated as a moment of quiet national pride.

In the same year, China commissioned new coal capacity equivalent to fifteen Ratcliffe power stations. The year before, it commissioned twenty-four. In 2025, it commissioned thirty-nine — the equivalent of the entire Ratcliffe station every nine days, for a full year.

I am not writing this to argue that Britain should reopen its coal stations. It should not. I am writing it because the way we talk about energy in this country is so detached from the actual numbers that we are making serious strategic mistakes — and we cannot fix what we refuse to see clearly.

Where We Actually Are

Let us start with the facts. In 2024, fossil fuels provided 73.6% of Britain's total primary energy — oil, gas and coal combined. Oil's share of our energy mix has barely moved in a decade: it was 37.5% in 2015 and is 38.8% today. Electricity from wind and solar is genuinely growing, but it sits within a system where transport remains 92.4% dependent on petroleum fuel, and where gas still heats the majority of our homes.

This is not a criticism. It is a description. The point is that the public conversation in Britain — politics, media, much of business — proceeds as though the transition is further along than it is. That gap between the narrative and the reality makes it almost impossible to have an honest argument about what needs to happen next.

Electricity generation has genuinely improved. Coal's share of our energy mix fell from 12.2% in 2015 to just 2.5% in 2024. Wind, solar, biomass and hydro doubled their combined contribution from 10.6% to 21.3% over the same period. Those are real achievements. But total primary energy consumption — every car journey, every container ship, every gas boiler — paints a very different picture.

Sources: DESNZ Digest of UK Energy Statistics (DUKES); Our World in Data / Energy Institute Statistical Review 2024; UK Energy Consumption 2025.

What China Is Actually Doing

China is not choosing between growth and the environment. It is building everything simultaneously.

Over the last ten years, China commissioned approximately 419 gigawatts of new coal capacity — the equivalent of around 214 Ratcliffe power stations. In 2025 alone it added 78 gigawatts of coal, a ten-year high, including 52 individual generating units of one gigawatt or more. When people say China is building a new coal plant every week, they are, if anything, understating it.

A word on terminology. In Chinese official statistics, "thermal" power means combustion-based generation — coal, natural gas and oil. Nuclear is counted separately and is not thermal.

You will have seen headlines reporting that China's wind and solar capacity has now overtaken thermal. That is true — China has more gigawatts of wind and solar equipment installed than it has coal and gas plant. But gigawatts of installed equipment and terawatt hours of electricity actually produced are entirely different things, and confusing them is the source of most of the misleading reporting on China's energy transition.

Here is the reason they diverge. Think of installed capacity as the maximum possible output — how much electricity a source could produce if it ran continuously, every hour of every day. What actually gets generated depends on how often it runs. A coal plant runs roughly 50 to 55% of the time. A solar panel generates only when the sun is shining — roughly 15% of the time on average across China's geography. A wind turbine runs perhaps 25% of the time. So a single gigawatt of coal capacity produces three to four times more electricity over a year than a single gigawatt of solar capacity. You can have more solar equipment than coal equipment and still get a fraction of the electricity from it.

The numbers bear this out. In 2024, thermal power — coal, gas, oil — generated roughly 70% of China's electricity. Wind and solar together, despite their enormous and growing installed base, produced around 17%. China is building renewables faster than any country on earth, and the trajectory matters. But the transition from capacity to generation takes decades, not years.

At the same time, China built far more in renewables than anywhere else on earth. Over the same decade: approximately 1,162 gigawatts of solar, 517 gigawatts of wind, 132 gigawatts of hydro. In 2025, China installed 315 gigawatts of solar and 119 gigawatts of wind in a single year. Coal generation actually fell in 2025 even as coal capacity rose — because renewables met virtually all incremental demand, while coal provides the dispatchable backup for when the wind does not blow and the sun does not shine.

China's lesson is not that coal produces prosperity. It is that electricity — abundant, reliable, and expandable on demand — is the foundation of everything else: factories, cities, digital infrastructure, electric vehicles, AI data centres, and 800 million people lifted out of poverty over four decades. More than 75% of the entire global reduction in extreme poverty over that period occurred in China. Electrification did not do that alone, but without it, none of the rest was possible.

Sources: Global Energy Monitor / CREA Boom and Bust Coal 2025 and 2026; China National Energy Administration; IEA Electricity 2025; World Bank poverty data.

The Number That Should Concern Every Business in Britain

In 2024, average UK industrial electricity cost 26.6 pence per kilowatt hour — equivalent to £266 per megawatt hour. That was the highest among all countries reporting data to the IEA (the International Energy Agency, which coordinates energy policy among 31 advanced economies), and 63% above the IEA median.

To put that in concrete terms: a continuously operating 100-megawatt data centre — the kind of facility that runs AI infrastructure — faced an annual electricity bill in 2024 of approximately:

The UK cost was 45% above France. It was four times the cost in the United States.

During the first half of 2025, the UK had the highest industrial electricity prices in Europe across every consumer-size category. The disadvantage was greatest for large and extra-large consumers — precisely the businesses that generate the most jobs and economic output.

Sources: House of Commons Library; DESNZ international price comparison data; UK Compute Roadmap 2025.

Germany: A Tale of Two Prices

Germany deserves careful treatment because it is widely cited in this debate and is almost always misrepresented.

The headline figure for German industrial electricity in 2024 — around £170 per megawatt hour for standard large users — is actually higher than Britain's equivalent of £140 to £150. On that measure, Britain is cheaper. But that is not the comparison that matters for industrial competitiveness.

Germany operates a two-tier system. For energy-intensive industries — steel, chemicals, glass, paper, ceramics — the government provides substantial exemptions from renewable energy levies, grid fees and energy taxes. Under the Special Equalisation Scheme (Besondere Ausgleichsregelung), qualifying firms pay only 15 to 20% of the standard renewable surcharge. Grid fee reductions of up to 90% are available to the largest users. Combined, these mechanisms reduce electricity costs by 50 to 65% compared with the standard rate. In cash terms, Germany's most energy-intensive manufacturers pay around £60 to £85 per megawatt hour.

Britain has a relief scheme too. Eligible industries receive a discount of approximately £35 to £40 per megawatt hour. On a standard large industrial bill of £140 to £150, that is a reduction of roughly 25%. After the relief, qualifying British firms pay around £100 to £115 per megawatt hour.

The comparison is stark. Germany's exemption cuts bills by 50 to 65%. Britain's relief cuts bills by around 25% — roughly half as much. And because Germany started from a higher standard rate, the end result is that qualifying German manufacturers pay £60 to £85 per megawatt hour, while their British counterparts — even after the relief — pay £100 to £115. British firms are paying 30 to 50% more than their German equivalents, despite the relief scheme existing precisely to address that gap.

And even Germany's system is not working well enough. The BDI — the Bundesverband der Deutschen Industrie, Germany's federation of industry — reported in 2024 that 32% of its member companies have already relocated or are planning to relocate production outside Germany, citing energy costs as a primary factor. That is the consequence of the standard rate, which the exemptions do not reach. Germany's chemical industry output fell 12% from 2021 to 2023. Glass and ceramics fell 10%. Paper fell 8%. Industrial production overall fell 2.5% in 2023 and continued declining through 2024. BASF, the world's largest chemical company, cut 2,600 jobs at its Ludwigshafen headquarters and announced a permanent reduction in European capacity.

The lesson for Britain is not that Germany has solved the problem. It is that Germany has at least acknowledged it — and created a mechanism that shields its most strategically important industries from the full cost. Britain's equivalent is roughly half the size — and its most electricity-hungry new industry is excluded entirely. Data centres — the infrastructure underpinning AI, cloud computing and the digital economy — currently receive no relief at all.

Sources: European Commission Energy Prices and Costs in Europe – Germany Country Report; Eurostat nrg_pc_205 database; Clean Energy Wire industrial price factsheets; BDI competitiveness survey 2024; Ifo Institute; Reuters.

What This Means for Investment

The UK government estimates that Britain will need at least 6 gigawatts of AI-capable data-centre capacity by 2030 — roughly three times today's available capacity. Six gigawatts is not a modest number. It equals the entire current output of Britain's nuclear fleet. It represents approximately 8% of total UK generating capacity and around 12% of peak winter demand. Individual AI Growth Zones may require between 500 megawatts and one gigawatt each. This is not a technology question. It is an energy infrastructure question.

A business making a location decision for that kind of investment does not read ministerial speeches about net zero. It reads electricity price comparisons, grid connection timelines, and planning approval rates. On all three measures, Britain is currently losing the argument.

Service industries, banking, telecommunications, universities, healthcare and AI are not post-energy industries. They are electricity-dependent industries. In the AI era, reliable and competitively priced electricity is becoming a strategic input in precisely the same way that ports, coal and steel were strategic inputs to the earlier industrial economy. A country that does not understand this — or that allows the environmental conversation to crowd out the industrial policy conversation — will discover it too late.

Sources: UK Compute Roadmap 2025; National Grid ESO Capacity and Demand data 2024; DESNZ UK Energy in Brief 2024.

What Needs to Change

The honest argument is straightforward. Britain needs more dependable generating capacity, cheaper electricity for large consumers, faster grid connections — currently measured in years, not months — and much more transmission and distribution infrastructure. It needs storage and demand flexibility, dependable low-carbon power from renewables and nuclear, and dispatchable backup from gas, hydrogen or whatever firm capacity can be built in time.

And it needs planning rules that allow generation, substations and transmission lines to be built on commercial timescales, not public inquiry timescales.

China's real competitive advantage is not coal. It is the willingness to build the entire physical stack simultaneously — generation, grids, substations, storage, factories, transport and digital infrastructure — and to treat energy security as a matter of economic survival rather than environmental politics.

Britain is a highly educated, creative, outward-looking economy with enormous advantages. It is also an economy where electricity costs four times as much as it does in the United States for the industries we most want to attract. Those two facts cannot coexist indefinitely.

The debate we need to have about energy in this country is an honest one, based on where we actually are, not where we would like to think we are. Facts, in this discussion, are thin on the ground. That needs to change.