Energy is no longer simply a national business matter - Jeremy Grant

Offshore wind is central to the UK’s ability to transition from fossils fuels as we tackle climate change. And Britain has more capacity for offshore wind power generation than any other country apart from China. Most of this is in the North Sea centred on the vast ScotWind wind farms project.

Yet it is China that should be at the top of the ministerial in-tray (even as a decision on where in Scotland GB Energy is to be headquartered is keenly awaited). Specifically: plans by China’s largest offshore floating wind turbine company, Mingyang Smart Energy, to build its first manufacturing plant outside China, right here in Scotland.

Mingyang has impressive form. Last year it was tied with Germany’s Siemens-Gamesa for installing the most offshore wind turbines globally, according to energy consultancy Wood Mackenzie. It also offers some of the keenest pricing, as Siemens-Gamesa, Vestas of Denmark and GE Vernova of the US know to their cost.

This has commercial appeal for ScotWind developers faced with inflationary cost pressure, worsening shortages in the offshore wind supply chain, and the need to be able to bid competitively in government offtake price auctions.

Mingyang’s Scottish hub would provide local content for the supply chain and create green jobs. That’s why the company is one of 10 projects designated “priority” under an industry initiative to kick-start an offshore wind supply chain known as the Strategic Investment Model.

Yet commercial priorities cannot be the only consideration. Geopolitics is part of the calculus too.

Geopolitical instability and conflict were the risks most cited by executives for the second quarter in a row in McKinsey’s latest global survey of economic conditions, published in March. For some, geopolitics may seem a remote concern. Others may argue that there is nothing to see here because China has been involved in Scotland’s offshore oil industry since the 1990s.

Yet this fails to recognise that the world’s a very different place today. The lesson from Europe weaning itself off reliance on Russian gas is that energy independence matters. By extension, it also matters who you allow to be strategically involved in your energy infrastructure. Ultimate control of wind turbines resides with the manufacturer through its control of the software embedded in them.

At a time when Brussels is probing Chinese wind turbine companies for allegedly benefiting from unfair subsidies and as the Biden administration ratchets up tariffs on Chinese green industries, the UK is taking a different path.

What message would it send to the UK’s G7 allies if London was prepared to see a Chinese wind turbine manufacturer set up a European beachhead in Scotland without having first done appropriate due diligence, and explain its reasoning?

The dilemma is that China’s global heft in renewables means it is essential to our collective ability to reach net zero. Yet how to reconcile this with national energy security policy isn’t being addressed. Over to you, Mr Miliband.