Exclusive:China plans base in Scotland to build massive wind turbines

Site would be first of its kind in Europe, amid concern over Beijing involvement in UK energy infrastructure

China’s largest maker of wind turbines is planning to set up its first European manufacturing beachhead in Scotland in a bid to supply equipment to wind farms in the North Sea, amid growing concern over the involvement of Beijing-backed companies in critical UK energy infrastructure.

Mingyang Smart Energy Group, based in China’s southern Guangdong province, has rapidly become one of the largest wind turbine makers in the world since entering the business as recently as 2006.

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With more than 20 manufacturing sites in China and research and development centres in Silicon Valley and Germany, it sells a range of “typhoon resistant” wind turbines, including one that is the world’s largest, with blades almost as long as the Eiffel Tower is tall.

There is growing concern over China's involvement in critical UK energy infrastructureThere is growing concern over China's involvement in critical UK energy infrastructure
There is growing concern over China's involvement in critical UK energy infrastructure

This month, Mingyang took a significant step towards meeting its ambition to expand manufacturing to Europe when it was among eight renewable energy projects promoted to “priority” status. The status was granted by an offshore wind industry working group of which the Scottish Government is a member and which runs a scheme designed to kick-start an offshore wind supply chain for Scotland.

The scheme, known as the Strategic Investment Model (SIM), is seen as vital to creating the supply chain needed to ensure that multinational developers can build a series of massive wind farms in the North Sea, known collectively as ScotWind.

One of the largest offshore projects in the world, ScotWind is key to the net zero ambitions of the UK and Scottish governments. Holyrood has said that offshore energy “has the potential to play a pivotal role in Scotland’s energy system over the coming decades”.

ScotWind is the result of an auction of seabed acreage that took place two years ago under which winning bidders, including BP, Shell, SSE Renewables, Danish group Orsted, Marubeni of Japan and ESB of Ireland, secured the right to develop wind farms that would generate up to 28 gigawatts (GW) of power once completed from 2030. That is almost two-thirds of the 50GW the UK government hopes offshore wind will be generating by around the same time.

The promotion of Mingyang to priority status comes amid rising concern in the West over perceived threats posed from China over the supply of renewables technology, as countries scramble to attract the investments needed to bolster energy security amid volatile geopolitics, while meeting ambitious net zero goals.

Such concerns are focused on two risks: the potentially market-distorting state subsidies provided by Beijing to China’s renewables sector, and the perceived security threat posed to host countries of technology embedded in wind turbines’ electronic controls.

SNP MP Stewart McDonald, a member of the Interparliamentary Alliance on China, an international, cross-party group of legislators, said: “If we end up in a retaliatory situation with China, there’s a clear risk to our energy sector. At the moment there is practically zero discussion in the Scottish Government, Scottish Parliament and civil service about what a China strategy should be.”

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This week, the European Commission launched a probe into Chinese wind turbine manufacturers, prompted by suspicion they may have an unfair advantage over European rivals thanks to generous state-backed subsidies.

It was the latest is a series of antitrust investigations by Brussels in the past six months that has already swept up Chinese makers of electric vehicles and solar panels amid fears that a flood of cheap Chinese products could undermine European rivals.

On a visit to Beijing this week, US Treasury Secretary Janet Yellen echoed similar concerns in Washington by warning the US would not accept a flood of “artificially cheap Chinese products”.

Mingyang’s plans to set up an assembly and possibly parts manufacturing plant for wind turbines in Scotland – creating up to 1,300 jobs, according to industry sources – would mean it sidesteps antitrust scrutiny from Brussels, as the UK is no longer part of the EU. Currently, there is no sign of antitrust action from UK authorities.

Yet the company could use the UK as a base from which to export its products to Europe and further afield. This is the model being used by Japan’s Sumitomo Electric, which is set to break ground next month on a £200 million factory in Nigg in the Cromarty Firth, which will make the subsea cables that carry power onshore from wind farms.

Mingyang, which is listed on the Shanghai Stock Exchange, first signalled its intent to come to the UK in 2021 when it signed a memorandum of understanding with the former Department for International Trade to build the UK’s first turbine assembly factory. The company said at the time this “places the UK at the core of its global offshore wind strategy”.

Meanwhile, there is growing concern over the potential risk posed to critical energy infrastructure in the UK of software widely used to govern devices developed by China.

In the case of offshore wind turbines, concern centres on the fact that ultimate control of a wind turbine sits with the manufacturer, not the wind farm developer. That is because the systems that govern the blades and other functions are directed by software algorithms controlled by that manufacturer, which is contractually bound to maintain, monitor and control the equipment.

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One senior offshore wind industry source said: “If you were a disruptive player, you could spike the electricity system and cause it to trip out by altering some of the parameters with the turbine, or you could suddenly shut the wind farm down. The threat is disruption to your power network rather than catastrophic failure.”

Mingyang has been in discussions with some ScotWind developers about supplying its turbine blades, the expert said.

Mingyang did not provide responses to emailed questions, but a spokeswoman said: “We are currently in the process of confirming internally on the progress in Scotland. As such, we do not have definitive information to share yet.”

The developments highlight an emerging dilemma faced by the Scottish and UK governments as they try to reconcile the need to encourage foreign investment in renewables with concerns over the security of critical energy infrastructure.

Charles Parton, senior associate fellow at the Royal United Services Institute (RUSI), a London-based think-tank, said: “A responsible government doesn’t put into the hands of a foreign hostile power – and China is – the ability to either degrade or turn off your economy.”

China’s consulate in Edinburgh said: “Trade and business between China and other countries are always carried out within the framework of the WTO regulations and abiding by related rules and laws. The co-operation is mutually beneficial. Protectionism, exaggerating security concern and politicising business issues will only damp normal exchange and co-operation.”

A spokesperson for the UK government said: “Investment in the energy sector is subject to the highest levels of national security scrutiny, with the UK being one of the most reliable and safest energy systems. We cannot comment on individual investment cases, but we will continue to work closely with industry to build secure supply chains and back UK businesses.”

Mingyang’s plans highlight how Chinese companies are becoming increasingly active in Scotland’s offshore wind sector. In November, Dajin Heavy Industries became the first Chinese company to supply the steel seabed foundations on which turbine towers sit to a wind farm in Europe when it completed delivery of the equipment to a 60-turbine wind farm being built by Ocean Winds in the Moray Firth.

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A Scottish Government spokesperson said: “We welcome the involvement of international companies in the offshore wind sector and supply chain and, like the UK government, consider that China’s global impact means it is important that pragmatic economic, political, cultural, educational and social relationships are maintained.

“We are not responsible for commercial decisions made by private companies. To ensure that trading and investment is safe, foreign companies undergo rigorous due diligence and the Scottish and UK governments work with experts and businesses across industry.”



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