The British Chancellor is heading to the G7 with a script written by 1990s neoliberal ghosts. The message? "Stop energy protectionism." It sounds noble. It sounds sophisticated. It is, in reality, a blueprint for industrial suicide.
When a politician tells you that "open markets" are the only way to solve the energy crisis, they are usually trying to hide the fact that they’ve lost the ability to build anything at home. We are told that subsidies and "buy local" requirements are inefficient distortions of the market. This is a lie. There is no such thing as a "free" energy market. There is only a market controlled by those who have the courage to build their own supply chains and those who are too cowardly to try.
The current consensus suggests that by lowering trade barriers, we all get cheaper solar panels and more reliable gas. That logic ignores the last twenty years of geopolitical reality.
The Efficiency Trap
The fundamental mistake in the "anti-protectionism" argument is the obsession with short-term price efficiency. If China can produce a solar wafer 30% cheaper than a factory in Northern England or the American Midwest, the neoliberal logic says we must buy from China.
This is how you win a spreadsheet and lose a decade.
Energy isn't a consumer good like a smartphone or a toaster. It is the base layer of civilization. When you outsource your base layer to a geopolitical rival because it saves you a few pennies per kilowatt-hour, you aren't being "efficient." You are transferring your national sovereignty to a third party.
The G7 allies are currently terrified of "fragmentation." They fear a world where every nation subsidizes its own wind turbines and batteries. They call it a "race to the bottom." I call it the first sign of life in Western industrial policy since the Cold War.
The Myth of Interdependence
For decades, the "Golden Arches Theory" of conflict suggested that countries with integrated economies wouldn't go to war. Energy interdependence was supposed to be the ultimate peace pipe.
Ask Germany how that worked out with Nord Stream.
The Chancellor’s plea to avoid protectionism is a plea to return to a state of vulnerability. We have seen what happens when "global supply chains" face a single point of failure. If the G7 continues to prioritize "cooperation" over "resilience," we are simply waiting for the next bottleneck to cripple us.
True energy security does not come from a diverse list of friends. It comes from owning the means of production. If you don't mine the lithium, process the polysilicon, and forge the steel, you don't have an energy policy. You have a subscription service to someone else's economy.
Why Subsidies are Necessary Evils
Critics of the US Inflation Reduction Act (IRA) or similar "protectionist" measures in the EU argue that these subsidies trigger trade wars.
Good.
A trade war over energy technology is exactly what the West needs to wake up. For too long, we have allowed our industrial base to atrophy under the guise of "comparative advantage."
Imagine a scenario where the UK refuses to subsidize its domestic nuclear supply chain because it’s "cheaper" to let foreign state-owned enterprises build the reactors. You end up with a grid that is a patchwork of foreign interests, where every maintenance cycle is a diplomatic negotiation. I’ve seen governments stall for five years on a single offshore wind project because they were waiting for the "market" to provide a solution that didn't involve government intervention. The market didn't show up. It never does for infrastructure that takes thirty years to pay off.
The "protectionism" the Chancellor fears is actually just the cost of doing business in a world where energy is a weapon.
The Polysilicon Problem
Let’s look at the data. China controls roughly 80% of the global solar supply chain. In some specific stages, like ingot and wafer manufacturing, that share rises above 95%.
When Western leaders scream about "avoiding protectionism," they are effectively saying, "We have already lost, so let's make sure we can keep buying from the winner."
If we don't use "protectionist" tools—tariffs, local content requirements, and massive direct subsidies—we will never build a parallel supply chain. You cannot compete with a state-subsidized monopoly using nothing but "fair play" and a handshake.
The "lazy consensus" says that trade barriers will slow down the green transition. This is a half-truth. Yes, a domestic turbine might cost more than a subsidized import today. But what is the cost of a transition that leaves you entirely dependent on a country that can turn off the lights whenever a diplomatic spat occurs?
The real cost of "cheap" foreign energy is the permanent loss of domestic expertise. Once those engineers and technicians leave the field because their employers couldn't compete with dumped prices, they don't come back.
Stop Asking the Wrong Questions
People often ask: "How can we make green energy cheaper for the consumer?"
This is the wrong question.
The right question is: "How can we ensure our energy system functions during a total blockade?"
If your answer involves "cooperating with G7 allies to keep markets open," you’ve already failed. Your allies will be in the same boat as you, scrambling for the same dwindling resources.
We need to stop viewing "protectionism" as a dirty word and start viewing it as "industrial insurance."
The Brutal Reality of the Grid
The status quo loves to talk about "smart grids" and "interconnectors." They want to plug the UK into France, Norway, and beyond. This is fine for a Tuesday in July. It is a catastrophe during a continental energy shortage.
When the crunch hits, every nation looks inward. Protectionism isn't an "option" that leaders choose; it is a fundamental human reflex. The Chancellor can give all the speeches he wants at the G7, but the moment there’s a shortage, the French will keep their nuclear power, and the Norwegians will keep their hydro.
Investing in "interconnection" at the expense of "generation" is a fool’s errand. It is building a bigger pipe for a dry well.
How to Actually Secure the Future
If we want to stop being victims of global price swings, we have to embrace the friction.
- Accept Higher Costs: Admit that domestic energy security is more expensive than global dependence. Stop lying to voters that the "green revolution" will be a free lunch. It’s a survival tax.
- Build Redundancy, Not Efficiency: In engineering, efficiency is the enemy of resilience. We need overcapacity. We need "inefficient" domestic factories that exist solely to ensure we aren't held hostage by a shipping lane in the South China Sea.
- Weaponize Capital: Use the state’s balance sheet to guarantee the floor price of domestic energy. If a domestic hydrogen plant can't compete with imports, the government should bridge the gap—permanently.
The Hidden Danger of "Cooperation"
The G7’s obsession with a "unified front" often results in the lowest common denominator. One country wants to protect its car industry; another wants to protect its heat pump manufacturers. They spend years debating "rules of origin" while the rest of the world builds.
I’ve seen this play out in the semiconductor industry. While the West debated the ethics of industrial policy, other nations simply built the fabs. By the time we decided to "cooperate" on a response, we were a decade behind.
We are repeating that mistake with the energy grid.
Protectionism is not about hating your neighbors. It is about making sure you can take care of yourself so you aren't a burden on them when things go wrong. A G7 made up of seven energy-independent nations is infinitely stronger than a G7 that is one "broken trade agreement" away from a blackout.
The Death of the "Global Citizen"
The Chancellor’s rhetoric belongs to a world that no longer exists. The idea of the "global citizen" who buys the best product regardless of origin is dead. We are back in an era of blocs, spheres of influence, and hard assets.
If the UK and its allies don't start acting like it, they will find themselves with plenty of "open markets" and absolutely no power to run them.
Stop trying to save the global trade order. Start building the furnaces.
