European governments seeking to expand offshore wind power are increasingly wary of Chinese companies’ involvement. Countering China’s dominance will be time-consuming and expensive, but political pressure and national security concerns may give the region little choice.
Offshore wind is a cornerstone of northern Europe’s clean energy strategy, offering a reliable alternative for more windy and less sunny countries striving to cut greenhouse gas emissions and reduce reliance on imported fossil fuels.
Since Russia’s invasion of Ukraine in 2022, Europe has dramatically slashed its purchases of Moscow’s oil and gas, but it has mostly replaced this with imports of US LNG, meaning it has traded one dependence for another.
However, wind technology also relies on a foreign power, given China's central role in the wind power supply chain from rare earth magnets to turbines and blades. The role of China in this sector has become a source of debate between European governments and the industry.
Nowhere more so than in Britain, which aims to triple its offshore wind generation by 2030 to between 43 and 50 gigawatts from around 15 GW today.
Chinese wind turbine manufacturer Ming Yang Smart Energy announced on October 10 plans to invest up to $2 billion in a plant in Scotland, just a month after Britain’s largest electricity supplier Octopus Energy signed an agreement with Ming Yang to explore opportunities to develop six GW of wind.
In its announcement, Ming Yang said the turbine manufacturing facility at Ardersier still requires the British Government's approval.
Prime Minister Keir Starmer faces a challenging decision. Approving this major wind deal should support the government’s green energy ambitions and hopes to tighten trade relations with Beijing, but it also risks running afoul of the growing push for energy nationalism.
Ming Yang faces no direct allegations that it poses a security threat. Starmer's government already faces political backlash from prosecutors' decision earlier this month to abandon the trial of two British men charged with spying for China in parliament. At the same time, US President Donald Trump has urged countries to avoid doing business with China as trade tensions between the world’s two largest economies deepen.
Beijing, on its part, is unhappy with the British Government's continued delays to approve plans for a new Chinese embassy in London.
So while Britain might welcome Ming Yang’s investment on economic grounds, giving a Chinese firm a central role in the development of critical UK energy infrastructure is bound to spark further political debate.
Britain is not the only country rethinking China’s role in its wind industry. The European Commission last year launched a review into Chinese turbine manufacturers in response to industry concerns that cheaper imports could threaten the competitiveness of European firms.
Additionally, in August, Hamburg-based asset manager Luxcara scrapped a deal with Ming Yang to supply turbines for its Germany North Sea wind farm.
To be sure, investor enthusiasm for the offshore wind sector, once seen as the posterchild of the energy transition, has ebbed in recent years due to rising costs and regulatory uncertainties.
President Trump's personal dislike of "windmills" has further undermined the industry, which in the past year has seen huge projects shelved from the US East Coast to Britain, Poland, Taiwan and South Korea.
The International Energy Agency recently revised lower its forecast for growth in offshore wind over the next five years by 25 per cent to 140 GW due to cost challenges and policy changes in the United States.
But given Northern Europe’s geography, wind remains one of its best clean energy options. The continent is expected to add 43 GW of offshore wind capacity over the next five years, nearly doubling its total installed capacity to 80 GW, according to industry group WindEurope.
While China is the world's biggest deployer of offshore wind technology, it does not dominate the industry as decisively as the solar market. Chinese turbine manufacturers already face strong competition from European rivals including Vestas and Siemens Gamesa.
Chinese turbines costs can be 30 to 40 per cent lower than their European peers, according to consultancy Rystad Energy, but the price advantage in Europe is likely inflated, as European-supplied turbines benefit from lower transport costs and premiums for insurance and financing.
And then there is the looming concern about cybersecurity risks. Turbine manufacturers typically supply the software to manage offshore wind farms and the connections with power grids.
With cybersecurity becoming a central strategic concern – particularly with the rapid growth in artificial intelligence – western governments may be increasingly wary of allowing Chinese firms access to their most critical energy infrastructure.
To reduce this dependency, European governments could put in place policies and subsidies to encourage the further development of domestic supply chains, particularly for complex components such as turbines and software technologies.
But this will, of course, take time.
Additionally, western turbine manufacturers still need access to rare earth metals and magnets. The production of which is, once again, dominated by China.
That dependence could fade if western governments successfully develop independent rare earth supply chains, but again, that isn’t going to happen overnight.
Wind power may ultimately help Europe develop affordable, secure and clean energy, but China's current dominance of this industry means Europe's path to this goal will be anything but straightforward.
(Ron Bousso, Editing by Louise Heavens)