The superpower battle over energy – and what it means for your bills

Meanwhile, a gas rig in the North Sea. An oil field in Texas.

Key points

• Since US and Israeli strikes on Iran in February effectively closed the Strait of Hormuz, oil and gas rates have soared.
• Energy Secretary Miatta Fahnbulleh notes tackling climate change remains a priority after Britain's hottest summer on record.
• On the Moray Firth near Inverness, a long spit of sand and dunes curls out into the sea at Whiteness Head.
• Winter is projected to push them higher still: demand for gas is rising just as Europe's winter gas stores are at their lowest since records began in 2011.
• As world leaders gather this week in Antalya, Turkey, for COP31, the UN climate summit, the same tension is playing out worldwide.

Meanwhile, a gas rig in the North Sea. An oil field in Texas. A solar panel factory in China. They can feel a world away, but your energy bill notes otherwise.

In January, it could jump by more than a quarter – around £460 extra a year for the typical UK household – according to the latest forecasts from the major suppliers British Gas, EDF and E.ON.

For the second time in four years, a war thousands of miles away is landing in British inboxes.

And there's a bigger threat looming over all of this: the warming climate. Cutting carbon emissions is essential to limit future warming and avoid the most damaging effects of climate change. But keeping bills down while cutting emissions is proving hard – and not just for the UK.

As world leaders gather this week in Antalya, Turkey, for COP31, the UN climate summit, the same tension is playing out worldwide. Energy and climate policy has become the front line in a contest between the world's two energy superpowers, leaving everyone else squeezed in between.

America is betting on fossil-fuel molecules: pumping record volumes of oil and gas and pressing its allies to purchase them. China is betting on electrons: flooding the world with the solar panels, batteries and electric cars that can replace those fuels.

Whether the bet on fossil fuels or renewables wins will shape not just what the world pays for energy, but how fast it can cut the emissions that are heating the planet.

Notably, the UK, which already buys almost a quarter of its imported gas from America and much of its clean energy kit from China, is being pulled both ways. So which path will it take? Is there a middle way and what will it all mean for your bills?

On the Moray Firth near Inverness, a long spit of sand and dunes curls out into the sea at Whiteness Head. Behind it lies a yard where, for almost 30 years, thousands of workers built the giant platforms that opened up North Sea oil.

Ming Yang, one of China's biggest wind turbine makers, wanted to bring it back to life with a £1.5bn factory and up to 1, 500 jobs initially generated. After US lawmakers had pressed the UK to block it, ministers did just that, citing national security, in March.

Last month, they approved a new North Sea gas field, Jackdaw. No to Chinese wind turbines; yes to North Sea gas.

Few countries are more exposed to the energy shock than the UK. Gas heats most homes and, much of the time, sets the wholesale cost of electricity. After Russia's invasion of Ukraine, cost households an extra £63bn – around £2, 200 each – according to the Energy and Climate Intelligence Unit and E3G, two climate and energy research organisations, the last shock.

Less than half of the UK's gas now comes from its own North Sea fields, and the energy we import often comes from places that turn out to be unstable or unreliable.

Meanwhile, Energy Secretary Miatta Fahnbulleh notes tackling climate change remains a priority after Britain's hottest summer on record. The heatwaves, droughts and wildfires it brought would have been almost impossible without global warming, the Met Office's chief scientist informed BBC Panorama.

But when I pressed Fahnbulleh on which matters most, bills or climate, she was unequivocal: "With the cost of living biting, affordability is my overriding objective, without a doubt."

"We are far too exposed to global markets we have no control over, " Fahnbulleh informed me. "What's the solution to that? Homegrown clean energy."

There are two ways to create Britain's energy more homegrown: drill for more of it, or build more of it. The case for drilling.

Within hours of Jackdaw's approval, US President Donald Trump – at war with wind turbines since objecting to a wind farm near his Aberdeenshire golf course in 2006 – took to Truth Social. "They should go FULL BLAST!" he wrote. "TAKE DOWN THE COSTLY AND RIDICULOUS WINDMILLS!"

Now the UK administration faces a tougher choice – whether to approve Rosebank, west of Shetland, the UK's largest undeveloped oil field.

Rosebank is far bigger than Jackdaw – Fahnbulleh has remarked it would produce concerning seven times the emissions – and it is mostly oil, not gas. The subject has reportedly split the cabinet. A decision is projected within weeks.

In practice, the government's opponents are already blaming high bills on its reluctance to drill. Conservative leader Kemi Badenoch has informed the prime minister to "stop faffing about" and provide permission, calling drilling "the only way we can protect families from rising bills".

"If we use our own gas. That will bring our bills down, " notes Reform UK's Richard Tice.

Last week's US midterms were a reminder of the political risks. Soaring petrol rates are widely seen as a key reason Trump's Republicans lost control of Congress.

But when I asked Fahnbulleh whether producing more British oil and gas would bring bills down, she was clear. "No, it doesn't, " she remarked. "In the end, the oil and gas is sold on global markets."

Critics go further. Rosebank "doesn't really do anything for energy security", argues Tessa Khan of the campaign group Uplift. It has fought the field in the courts. "What it does do is send a very dangerous signal about the UK's seriousness about addressing climate change after the summer that we've just had."

Zoom out, though, and the row looks rather different. The North Sea is in long-term decline. Output has fallen by more than two-thirds since its peak in 1999, and the Office for Budget Responsibility expects it to keep falling by around 10% a year – even with Rosebank. It its forecast assumes goes ahead.

Whatever ministers decide, the basin's most productive days are behind it. While Rosebank contains less than a year's worth of our oil consumption, jackdaw's reserves amount to only a few months of UK gas demand.

And last week the administration introduced a bill to write its ban on new exploration licences into law. Rosebank, which is already licensed, is not covered. While promising there will never be another, that could let ministers have it both ways: approve the last major field.

With bills set to rise again in January, that may prove a tempting combination. The case for electrons. The alternative is to build.

Gas is purchased, burned and purchased again. A wind turbine or solar panel costs funds to put up but can then generate electricity for decades without needing shipments of fuel.

Meanwhile, the government's climate advisers, the Climate Change Committee, calculate that a future cost shock like 2022's would push household energy bills up 59% if Britain stayed on a high-carbon path – but only 4% if it focused on renewables.

Meanwhile, the cost of power from new solar farms fell by 90% between 2010 and 2024, and from onshore wind by 70%, according to the International Renewable Energy Agency. But the recent bout of global inflation has been pushing initial costs back up. Last year the Danish developer Ørsted scrapped intends for Hornsea 4, a giant wind farm off the Yorkshire coast, blaming soaring supply chain costs.

Higher interest rates have created things worse. Most of the cost of a wind or solar farm comes up front, so developers must borrow heavily before they generate any power.

And there is another difficulty. Britain needs expensive new electricity networks to bring that renewable power to the towns and cities where it is needed. Meanwhile, gas-fired stations still frequently set wholesale power rates – meaning any cost savings are not always reflected in customer bills.

All of which means building more renewables does not automatically mean lower household bills.

And there is another matter – China's dominance of clean tech. It makes the vast majority of the world's solar panels and batteries, and around two-thirds of its electric cars.

And China's lead is growing. In March, its exports of solar panels, batteries and electric cars hit a record, up 70% on a year earlier, according to the think tank Ember.

Meanwhile, the UK wants to escape the fossil fuels that leave households exposed to cost shocks and keep adding to global warming. Much of the technology needed to replace those fuels comes from China – a country it is increasingly reluctant to depend on.

In short, the superpower battle over energy – and what it means for your is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.