Ming Yang Smart Energy said it had created European legal entities with independent governance and IT systems to address national security concerns. The company wants to reassure governments and customers that Beijing cannot use Ming Yang equipment to obtain sensitive information or interrupt electricity supplies. Ming Yang is among China's largest manufacturers of wind turbines.
Ming Yang followed advice from DLA Piper to establish legal structures intended to shield European customers from China's National Intelligence Law. The law obliges companies to assist state intelligence agencies. Ming Yang is seeking to separate the company's European operations from the parent company in China.
The UK government said in March that it would not support Ming Yang turbines in British offshore wind farms following a national security assessment. The decision stopped Ming Yang's planned £1.5 billion factory in Scotland. The factory would have created up to 1,500 jobs.
Philipp Pfefferle, Ming Yang's head of public affairs, said the UK decision had prompted greater efforts to address allegations involving cybersecurity and data security. Pfefferle said Ming Yang needed to persuade the market that answers to those concerns existed.
Ming Yang's response includes establishing a joint venture with Octopus Energy. Ming Yang would supply turbines, while the UK energy retailer would supply software and control systems. Ming Yang and Octopus said the companies were jointly exploring the development of onshore turbines adapted to the UK market. Pfefferle declined to discuss when the joint venture would begin or how ownership would be divided. Pfefferle said the aim was a company that complied with European cybersecurity and data protection regulations.
EU governments are weighing renewable energy development against security risks from Chinese equipment that could potentially be monitored or operated remotely. Consultancy Rystad puts the typical price advantage of Chinese wind turbines over western alternatives at 30% to 40%.
Michal Meidan, head of China Energy Research at the Oxford Institute for Energy Studies, said Chinese companies were legally required to transfer data when requested. Meidan said a Chinese company was extremely unlikely to disconnect a foreign country's wind farm. However, Meidan said an implicit threat remained.
Pfefferle said Ming Yang Europe itself had no direct access to wind turbines because access went through the developer. Pfefferle said China had no access to Ming Yang's European organization or to wind farm data. However, Pfefferle said creating separate European businesses was not a complete answer. Pfefferle said the European company also needed to demonstrate governance separate from the Chinese parent.
Other Chinese groups have similarly separated overseas operations to limit exposure to Beijing. TikTok is the most prominent example, having established legal entities in the UK and Ireland with local responsibility for European users.
Chinese Wind Turbine Maker Ming Yang Builds European Firewall Amid Security Concerns
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Summary
Ming Yang Smart Energy has set up European legal entities with separate governance and IT systems to address security concerns. The firm aims to show governments and clients that Beijing cannot access data or disrupt power through its gear. Ming Yang followed DLA Piper’s advice to avoid China’s National Intelligence Law. The UK had earlier blocked Ming Yang turbines for offshore wind farms, stopping a £1.5 billion factory in Scotland. Now, the company has partnered with UK firm Octopus Energy to build onshore turbines meeting European cybersecurity rules. As liquidity and crypto markets remain volatile, BTC as hedge against inflation continues to attract attention from global investors.
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