Mingyang Scottish wind factory plans have highlighted growing tensions between the UK’s renewable energy ambitions and national security concerns
The company’s potential entry into the UK market offers significant economic benefits, including discounted turbines and jobs, but raises questions about control of critical infrastructure
The case represents a crucial test of how the UK will balance Chinese investment in strategic sectors against security risks in an increasingly fractious geopolitical environment

For much of 2024, Scotland’s offshore wind community has been grappling with building port infrastructure, kick-starting a supply chain, consenting and – a favourite on conference panels – speculating about what GB Energy will do once it is up and running in Aberdeen.

These are all necessary domestic preoccupations. But the awkward truth is that global geopolitics is intruding on the UK’s renewable energy ambitions, with China front and centre.

That’s because some of the country’s renewable energy companies have been making inroads into Scotland.

Scottish factory plans

Most attention is on Mingyang Smart Energy’s plans, China’s largest offshore wind turbine manufacturer, which is considering a factory in Scotland. This would be its first outside its home country, not just in Europe.

Mingyang first popped up the UK context in late 2021 when it signed a memorandum of understanding (MOU) with the previous Conservative government. Under this, it set out plans to invest in blade manufacturing, a service centre and possibly turbine assembly in the UK.

In February, a proposed Mingyang manufacturing facility appeared on a list of 10 “priority” projects by the Strategic Investment Model (SIM) for ScotWind and INTOG developers.

Dajin Heavy Industries, a Chinese maker of monopiles, jackets and floating foundations, was another. The company is supplying the Moray West offshore wind farm with turbine towers. It signed an MoU on developing competitive floating foundation designs with Blue Float Energy, developer with Nadara (formerly Renantis) of two ScotWind and two INTOG projects.

Last month, an industry working group document showed that Mingyang’s project, in the Inverness area, had been earmarked for provisional Scottish Enterprise support of £30 million, split equally over three years.

This presumably would draw partly on the £150mn tranche of £500mn in Scottish government funding allocated for the supply chain, announced in the recent Holyrood budget. The same document allocates £80mn over two years to Vestas for its planned Port of Leith blade factory.

Competitive environment

Despite the Chinese company starting in 2006, Mingyang has proven expertise in offshore wind turbines and is of interest to developers and port operators.

Cost is a priority, with developers caught between a de facto European blade manufacturing duopoly of Vestas and Siemens-Gamesa and the challenging economics of offshore wind.

Mingyang is understood to be offering discounts of up to 50% for contracts and a three-year payment holiday to North Sea developers.

Cerulean Winds, formed in 2020, revealed in a slide presentation at the Floating Offshore Wind conference in Aberdeen in October it was interested. It intended to enter into a preliminary supply agreement with Mingyang in the fourth quarter of this year for three INTOG projects with Frontier Power.

Big plans

The UK needs help to meet its offshore wind power generation targets. This means attracting foreign investment in the supply chain at scale, like the Japanese funding behind the £350mn Sumitomo Electric subsea cable factory underway at Nigg.

In a report last month, the National Energy System Operator (NESO) warned that there is “no path to clean power without mass deployment of offshore wind”.

China’s dominance of the global renewable energy supply chain means it should not (some would argue cannot) simply be excluded from the UK’s net zero plans.

China accounted for around 70% of the offshore wind installed in 2023, according to the Global Wind Energy Council (GWEC).

The Scottish government and Highlands and Islands Enterprise, the economic development agency for an area of Scotland where most offshore wind is happening, will welcome any foreign investment that brings green jobs.

Potential for co-operation

Last week, Scotland received just such a boost. Forth Ports announced a further £50mn investment in Port of Leith after securing a contract with Inch Cape to deliver its 1 GW wind farm off the Angus coast, involving 72 Vestas turbines.

The development comes with a Chinese twist, highlighting how the country’s energy companies are successfully expanding their offshore wind exposure in Scotland.

Ireland’s ESB energy group and Red Rock Power own Inch Cape. Red Rock Power, headquartered in Edinburgh, is part of Red Rock Renewables, the European subsidiary of SDIC Power, controlled by SDIC, a state-owned energy company based in Beijing.

The same day of the Inch Cape announcement, China’s ambassador to the UK, Zheng Zeguang, said there was “huge potential for co-operation in wind power between China and the UK”.

A thorough assessment of China’s involvement in UK offshore wind should not focus solely on the commercial and economic benefits.

This is where geopolitics arrives. In a period of growing global and regional divisions and escalating trade tensions, it matters which countries are involved in the UK’s critical national energy infrastructure and supply chain. This is especially true where digital technology is concerned.

Security questions

National security concerns are increasingly driving economic policy, evident in the Biden administration’s China tariffs. This will intensify under Trump.

These are about protecting American industrial competitiveness and dealing with technologies that the US suspects could be used for espionage or economic coercion.

In September, the US imposed a 25% tariff on Chinese ship-to-shore cranes used in most American ports. This was aimed at the dominant Chinese manufacturer of such cranes, Shanghai Zhenhua Heavy Industries.

US security officials described this company as a “Trojan horse” for its ability to disrupt operations. They noted concerns about the sophisticated electronics in the cranes.

The American Association of Port Authorities dismissed such concerns as “alarmist” and China’s embassy in Washington called them “paranoia-driven.”

Despite the heated mood in the US, there are legitimate concerns in the UK’s offshore wind industry about a key vulnerability: the turbines’ operational software.

This is seen as a weakness because control of the software – including the algorithms and IP – has always been with the turbine manufacturer. This gives it ultimate control of the turbine.

Vulnerabilities

If relations with China worsened, Mingyang would have to take instructions from Beijing, regardless of its status as a private company, if China wanted to exert pressure on the UK.

In theory, those instructions could disrupt the UK transmission network by remotely updating the operational software. This could halt the turbines unexpectedly or trip a substation, damaging the downstream transmission network.

Some argue that if Mingyang surrendered SCADA (supervisory, control and data system) control to a UK third party, this would provide a workaround. This misses that while SCADA allows control over certain parameters, ultimate control resides in the operational software.

Others may argue that concerns about China are overblown, given the reliable track record of Chinese involvement in UK energy since the 2012 acquisition of North Sea oilfield operations by state-owned CNOOC and Sinopec.

Even if the lessons from Huawei in the UK are fading for some, the world is very different now.

Economic battlelines

The previous government’s 2023 Integrated Review described China as an “epoch-defining and systemic challenge”. China may not be an immediate threat, but it’s not an ally.

Contrary to that, President Xi Jinping has aligned his country with Russia in its war against Ukraine. In May, he intensified co-operation during a visit to Beijing by President Vladimir Putin. Both pledged to “increase interaction and tighten co-ordination”.

We live in a new era of hybrid warfare and economic coercion as a geopolitical tool. Canada, Australia, South Korea and Lithuania have all discovered this through difficult experiences with China.

In 2021, Lithuania disappeared from China’s customs system, blocking its exports to China. This happened after Lithuania allowed a Taiwan mission in Vilnius using the name “Taiwan” instead of “Taipei”. Beijing regards this choice as a violation of its “One-China” principle.

Under Labour, the UK government is “taking a consistent, strategic and pragmatic approach to China which prioritises the UK national interest”.

Clean Power 2030 said that while rolling out new infrastructure, “we will maintain high levels of resilience and security – including … in managing threats to our national security, such as cyber threats, as our energy system becomes increasingly interconnected.”

Technical guardrails

The UK government is responsible for energy security. Hopefully, it’s conducting due diligence on Mingyang’s proposed manufacturing plant in Scotland, while commercial deliberations advance under the Scottish government, its agencies, developers and others.

The UK may accept certain of China’s leading renewables companies as commercially inevitable – indeed desirable. If so, conditionality involving technical guardrails or ring-fencing might be established as a price of entry for turbines and digital connectivity.

Germany is grappling with this. In October, its economy and energy ministry produced a five-point action plan on wind farm cyber security to reduce dependency on critical turbine components from China and adapt German financing for Chinese wind companies “suspected of distorting competition”.

Excess capacity

A second concern is Mingyang’s plans for a factory in Scotland amid an eighth-month Brussels probe into Chinese wind turbine manufacturers. This aims to establish whether they are benefiting from unfair subsidies from Beijing.

So far, the US has not followed, but the wind power subsidies issue dates back to 2011, when it challenged Chinese state support for its wind companies at the World Trade Organisation.

Western policymakers are concerned that China is exporting excess capacity to the world at anti-competitively low prices. Beijing has denied these claims, stating that other countries have uncompetitive green energy businesses.

China has been trying to circumvent anti-trust risk areas. It’s shipping more goods via Mexico to the US, according to the Financial Times.

Similarly, the country’s wind turbine manufacturers are setting up in locations to avoid anti-trust risk. For example, in August, Mingyang rival Goldwind inaugurated an onshore wind blade factory in Brazil. Meanwhile, last month Sany struck a deal to build a turbine factory in Kazakhstan as part of a push into Central Asia.

Mingyang’s choice of the UK for its Scottish factory places the company beyond EU antitrust scope and scrutiny, as it has left the EU.

Balancing act

UK policymakers face a complex task of balancing competing priorities.

Offshore wind is crucial for the 2030 energy target but the infrastructure to enable this transition is both the guarantor – and potential Achilles’ heel – of energy security. The government must navigate complex trade relationships, that could spill out of the energy sector and into other areas. But there is also the delicate balance between Westminster’s security responsibilities and Scotland’s devolved powers.

The UK cannot be naïve about the geopolitical implications of its choices. As McKinsey’s latest monthly highlights stated: “Geopolitical tensions are no longer a distant threat; they’re a daily reality affecting business decisions.”

Chinese investment via Mingyang in Scotland can accelerate ambitious energy goals. But the UK government must establish robust safeguards before allowing foreign manufacturers access to critical infrastructure.

The government has championed its industrial strategy and net-zero ambitions. But it must balance these against rigorous scrutiny of foreign investment in critical infrastructure.

The Mingyang case represents more than just a factory decision. It’s a test case for how the UK will manage the complex intersection of energy security, economic opportunity, and geopolitical risk in an increasingly fractured world.

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