Chinese suppliers winning a deal to provide China-made wind turbines for a offshore project in the North Sea of Germany has raised concerns in the German Ministry of Economy, triggering “close attention”. The ministry stated on Wednesday (July 3) that this deal involves crucial infrastructure security and fair competition issues.
According to the transaction between German asset management company Luxcara and Ming Yang, a Chinese wind power company, the Chinese firm will supply 16 turbines to the German side, each with a capacity of up to 18.5 megawatts, scheduled to be installed by 2028.
A spokesperson from the German Ministry of Economy told Reuters, “The federal government will carefully consider this decision. On the one hand, it concerns crucial infrastructure issues. On the other hand, it is important to maintain a fair competitive environment.”
The German Ministry of Economy has the authority to review and block transactions deemed to have an impact on national security. As tensions in China-Europe trade escalate, particularly focusing on electric vehicles, with the EU proposing tariffs on Chinese imports in response to unfair subsidies by the Chinese government.
Earlier on Wednesday, a lobbying group for the European wind industry criticized the deal, stating that China has secured the rights to critical infrastructure in Germany through this transaction, while Europe’s supply chain is prepared to provide turbines for this project.
“Germany and the EU must consider wind energy as a strategic industry before it’s too late,” said WindEurope in a statement, emphasizing the need for fair competition in the European wind power sector.
Previously, the EU Commission requested information in April to review potentially market-distorting practices of Chinese wind turbine manufacturers in five EU countries. China labeled this move as “discriminatory”.
Luxcara stated that the North Sea project named “Waterkant” will provide electricity to around 400,000 households, contributing to Germany’s goal of meeting 80% of its electricity needs through renewable energy by 2030.
Luxcara stated that the company signed the agreement after international bidding and extensive due diligence.
Also regarding security considerations, the Ministry of Economy halted Volkswagen’s plan to sell its gas turbine business to a major Chinese state-owned enterprise.
Minister of Economy, Robert Habeck, stated that while Germany generally welcomes investments, technologies crucial to “public order” must be protected, which was the reason behind halting the transaction.
According to Reuters, the plan to sell Germany’s gas turbine business to the Chinese state-owned enterprise China Shipbuilding Corporation (CSIC) Longjiang Guanghan Gas Turbine Co., Ltd. (GHGT) was announced in June 2023 with the price undisclosed. Volkswagen’s subsidiary MAN Energy Solutions, which owns the gas turbine business, stated in September of the same year that the government would carefully review the sale plan.
Some German politicians are concerned that China may not use the gas turbines for civilian purposes but rather for powering military vessels.