Germany has been warned that allowing Chinese firms to supply wind turbines could pose a threat to its political system and economy. A government-backed report seen by Politico recently cautions that China could exploit its role in the sector to delay projects, access sensitive data, or even shut down turbines remotely.

The study, commissioned by Germany’s defence ministry and prepared by the German Institute for Defence and Strategic Studies, suggests blocking a planned offshore wind farm that intends to use Chinese turbines.

The report highlights concerns that disruptions orchestrated by Beijing could destabilise Germany’s energy security and broader economic stability. “Given the political situation, it can be assumed that such a slowdown or even disruption would be deliberately used by China as a means of political pressure or economic warfare,” it states.

This warning comes amid wider European concerns over critical infrastructure security. Recent years have seen multiple suspected sabotage incidents in the Baltic Sea. Meanwhile, Brussels is investigating whether Chinese wind turbine manufacturers have received state subsidies to undercut European competitors.

Andrea Scassola, vice president of wind research at Rystad, told Politico that as global energy networks become more interconnected, the risk of vulnerability rises. “What we are seeing … is intensifying great power rivalry,” he said.

Germany and Chinese turbines

Despite these warnings, some German firms are already turning to Chinese manufacturers. Last year, Hamburg-based Luxcara selected China’s Mingyang Smart Energy to supply 16 turbines for the Waterkant offshore wind farm off northwest Germany. The turbines, among the world’s most powerful, have a capacity of up to 18.5 MW each and are set for installation in 2028.

The German economy ministry is reviewing security and competition aspects of the project. A spokesperson told Reuters: “The federal government will look at this decision very closely … in relation to critical infrastructure and fair competition.”

WindEurope, the main lobbying group, has urged European governments to ensure fair competition, warning that cheaper Chinese turbines could undermine Europe’s struggling wind sector. The European Commission is already investigating whether China’s subsidies distort competition in five EU countries.

Europe’s wind industry under pressure

European firms have struggled with high equipment costs, supply bottlenecks and pricey debt, whereas China’s centralised political structure and economy has made the country into the leading player in the world wind sector.

China now dominates global wind turbine production, accounting for 60% of manufacturing capacity. European firms, which once led the sector, now hold just 19%, while US companies make up 9%.

Indeed firms in China now control much of the wind supply chain and produce the vast majority of critical components. This dominance is raising concerns in Europe, which aims to expand its wind power capacity from 220 GW in 2024 to 425 GW by 2030 and 1,300 GW by 2050.

European manufacturers just face increasing competition from state-backed Chinese firms offering lower prices and attractive financing terms. Chinese turbine prices are typically 20% cheaper than their European or US counterparts, a major challenge for Western firms trying to remain competitive.

Giles Dickson, CEO of WindEurope, said in a statement in October: “Chinese wind turbine manufacturers are offering much lower prices than European manufacturers and incredibly generous financing terms with up to three years deferred payment. You can’t do that without an unfair public subsidy.”

The European Commission is attempting to level the playing field with its Wind Power Package, aimed at speeding up permitting processes and improving grid infrastructure. However, a report by WindEurope has warned that over 500 GW of wind projects are currently awaiting grid connection approval, a process that can take up to nine years.

UK tensions over Chinese wind investment

In the UK, concerns have been growing over China’s involvement in offshore wind projects. Two major Chinese firms are in line for GBP60mn ($76.2mn) in Scottish government funding to build factories supporting offshore wind farms in the North Sea.

Mingyang Smart Energy is planning to establish a blade manufacturing plant near Inverness, its first outside China. The factory, expected to cost GBP150mn, could create hundreds of jobs, said the regional government. The company has been earmarked for GBP30mn in Scottish government support.

Orient Cable, a Chinese firm specialising in subsea cables, is also set to receive GBP27mn from Scottish Enterprise, the inward investment agency. The company’s cables are used to transmit electricity from offshore wind farms to the mainland.

However, UK policymakers are increasingly concerned that Chinese firms could use their position in the energy sector to gain strategic leverage. A former chief of MI6, the British agency that collects and analyses foreign intelligence, Sir Richard Dearlove, recently warned against relying on China for critical energy infrastructure.

Security analysts fear that Beijing could instruct manufacturers to disrupt operations through embedded software in turbines, which remains under the control of the manufacturer after installation.

Stewart McDonald, director of Glasgow-based consultancy Regent Park Strategies, said: “Given the public interest in a Chinese entity building such a critical part of the country’s energy infrastructure, nobody has ever fronted up to say what mitigations are in place to allay the very legitimate security concerns around this.”

Balancing investment and security

The UK government faces a dilemma as it seeks to attract investment in renewables while safeguarding national security. Not surprisingly, the Labour Party’s efforts to foster business ties with China to boost investment in green energy have drawn criticism.

The Department for Energy Security and Net Zero has been consulting wind farm developers on security risks linked to Chinese suppliers. A spokesperson told The Times: “Investment in the energy sector is subject to the highest levels of national security scrutiny.”

Scotland is key to the UK’s wind power expansion, with the so-called ScotWind project featuring 20 offshore wind farms. Some developers are considering Chinese suppliers due to their lower costs and expertise in nascent floating wind technology, which is expected to make up 60% of ScotWind’s capacity.

However, industry sources warned The Times that allowing Chinese firms to manufacture turbines locally could create dependencies that may be difficult to undo if geopolitical tensions worsen. James Crabtree, of the European Council on Foreign Relations, told the newspaper: “If we are going to create dependencies with China, how do we unpick them in the long term if we need to?”

Europe’s next steps

The European Commission has begun investigating Chinese wind turbine manufacturers over potential unfair subsidies. According to the Centre for European Policy Analysis (CEPA), the EU’s Competition Commissioner Margrethe Vestager said in April of last year that these subsidies “are not only dangerous for our competitiveness … they also jeopardise our economic security.”

Instead of trying to out-subsidise China, some analysts argue that Europe and the US should invest in next-generation wind technologies. Companies in Norway and the UK are leading in heat storage solutions, for example, which could make wind energy more reliable when production dips. The UK and EU now face a crucial decision: whether to prioritise lower costs and rapid expansion or take steps to protect their industries from reliance on Chinese manufacturers.