Welcome to Energy Source, reaching out from London.
Recently, the energy sector has been analyzing the UK Budget announced last week, where the government addressed the challenge of rising energy bills faced worldwide. Chancellor Rachel Reeves introduced measures that effectively reduce the typical electricity bill by around £150. This was achieved by reallocating some costs to taxation and discontinuing a significant energy efficiency program.
One of the prominent changes involves temporarily subsidizing older wind and solar farms through taxes rather than electricity bills. This move has been positively received by many who believe the Treasury should lower electricity costs to incentivize the shift from gas boilers to heat pumps.
However, the decision to end the Energy Company Obligation, an energy efficiency scheme, is contentious. The government claims the program had issues and is redirecting £1.5 billion to a new initiative called the Warm Homes Plan instead. Yet, Dhara Vyas, the CEO of Energy UK, highlighted that this Budget cuts funding for essential home improvements that could help reduce bills and might harm businesses within the supply chain.
Additionally, the government has reiterated its position on the North Sea oil and gas industry, advancing a ban on new exploration licenses. This decision, in the making for years, represents a significant shift for a G7 economy away from its fossil fuel resources.
The industry has cautioned that the ongoing windfall tax, established after Russia’s invasion of Ukraine, is accelerating its decline.
In other news, the commodities trading scene reacted to Torbjörn Törnqvist’s exit from Gunvor, a firm he co-founded. The company cited that “misperceptions about its past have become an impossible distraction” following claims from the US labeling it a “Kremlin puppet.”
This newsletter also highlights a major Chinese solar player making waves in the battery storage market.
Why Chinese Solar Groups are Expanding into Batteries
In recent years, China’s top solar panel producers like Longi, Trinasolar, and JinkoSolar have significantly advanced global solar power capacity. The total capacity has jumped from about 1.6 terawatts at the end of 2023 to 2.25 terawatts by the end of 2024, as these companies scale up production and reduce costs.
However, many companies have recorded substantial losses in their pursuit of market share, with the International Energy Agency estimating these losses to be nearly $5 billion since the start of 2024.
To combat this, some Chinese manufacturers are branching into battery storage, which helps manage electricity supply and diversify income streams. Trinasolar and JinkoSolar began entering this sector earlier this decade, and now Longi has followed suit, marking a trend toward widespread battery adoption.
Recently, Longi took majority stakes in Canada’s PotisEdge, aiming to offer bundled solar and battery solutions internationally. At an event in London, Longi’s senior VP Dennis She emphasized the importance of storage in creating a stable energy framework centered around solar energy.
With solar power’s rapid growth, grid operators are facing challenges due to sudden spikes in generation, particularly during the day when demand decreased. This scenario has heightened the need for batteries to store excess energy and balance supply.
She predicts a future where storage surpasses solar in growth rates, potentially increasing by 30% to 40% each year. The integration of solar and storage systems is expected to drive costs down through shared installation and service efforts.
Longi recently reported losses of nearly $600 million for the first nine months of 2025, but this was an improvement compared to the previous year’s figures. They managed to sell 63 gigawatts of solar cells and modules, along with 38.15 gigawatts of silicon wafers.
Meanwhile, the chair of Trinasolar indicated that energy storage could help his company improve its performance ahead of competitors.
With a focus on utility-scale solar farms and industrial sites, Longi’s battery expansion comes amid pressures from tariffs in the US and tightening foreign investment rules in Europe, aimed at creating local jobs and benefits.
Longi’s subsidiary PotisEdge boasts around 30 gigawatts of battery production capacity in China. While establishing operations in Europe, Longi does not plan to manufacture there.
Dennis She expressed that collaboration between Europe and China on energy transition is crucial but warned that Europe needs to create favorable policies if it wants to encourage production on the continent.
“Buying from China results in significant cost differences,” he noted.