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A £1.5 billion plan by Chinese renewable energy company Ming Yang to open the UK's largest wind turbine manufacturing plant in the Scottish Highlands, has been rejected by the government on national security grounds.
Ming Yang had proposed its facility for Ardersier Port near Nairn which it said would create 1500 jobs.
But the UK Government said after "careful consideration" it could not support the use of the Chinese turbines in UK offshore wind projects – a decision the Scottish Government says will have "far-reaching consequences" for the Scottish economy.
The announcement comes after discussions between the company and the Scottish and UK governments for more than two years.
It was welcomed by the chair of Westminster's business and trade committee Liam Byrne: "Our committee has consistently warned that in a more unstable world, where China has too often resorted to the tactics of economic coercion, we simply can’t surrender control of our energy supply chain in ways that create the risk of new and unwise dependencies," he said.
"Our economic security reviews have warned time and time again that over-reliance on China in strategic sectors leaves Britain exposed to coercion, disruption and unfair competition. The Government is right to act.
"The test now is consistency – enforcing clear rules on Chinese investment, strengthening the sovereign capabilities we need at home and getting tougher on Chinese dumping of over-subsidised good that undermine British firms."
He added: “The government now needs a much clearer more predictable framework for taking these decisions. That is exactly what our new inquiry on the UK-China economic relationship will set out.
"Above all it’s now vital the UK builds resilient, secure supply chains that support jobs, growth and national security.”
Under the first of three planned phases, Ming Yang – which is China's fifth-largest wind turbine producer, said it would invest up to £750 million in an advanced manufacturing facility – with the first production taking place by late 2028. Latter phases would have seen the facility expand and create an “offshore wind industry ecosystem” around the hub.
But there have been growing concerns about the security of critical UK infrastructure, with Chinese investment under scrutiny particularly in the wake of the Westminster spy scandal.
Despite that, last October Scotland's First Minister told LBC he was right to meet with the firm to discuss investment in renewables in Scotland, particularly if it creared new jobs for those previously employed in the oil and gas sector.
At the time he said: “They are an investor interested in investing in Scotland, and I think people would be very surprised if the government of Scotland was not talking to investors about the potential to invest in renewable energy technology.
“There is, obviously, a level of interest, and an important interest, in this respect, from a national security perspective, which is the responsibility of the UK government, and the Scottish government will be working in close consultation with them to understand and to consider the issues of national security that are relevant to be addressed in this particular case.”
He also criticised the UK government for taking too long to decide whether or not to give the project the go-ahead.
Today a spokesman for the UK government said: "Industry have sought our view on the use of these turbines in British waters and in our energy system. After careful consideration, Government's view is that we cannot support the use of them in UK offshore wind projects.
“We will always act to protect our national security, and we are committed to strengthening and prioritising resilient and sustainable offshore wind supply chains.
“We welcome investment from China where it's in our national interest – as demonstrated by significant inward investment during the Prime Minister's recent visit to Beijing. We will continue to take a consistent, long term and strategic approach to our relationship with China – cooperating where we can, whilst protecting our security and resilience.”
Ming Yang said it was "disappointed" by the decision but would continue to engage with the UK government.
"We are disappointed by the UK government's decision not to allow Ming Yang's world-leading technology to be used.
"We will continue to engage constructively with the UK government, including on the important topic of national security, and remain committed to supporting the UK's mission to become a clean energy superpower.
"We continue to believe in the long-term potential of the UK market, and our planned activities remain unchanged."
Scotland's Deputy First Minister Kate Forbes said national security was important and must be respected but it was "regrettable" the UK government had not explained precisely what the problem was with Ming Yang.
She added: "This decision has been sitting on the desks of UK government ministers for over 18 months – their dithering will have far-reaching consequences that, once again, will be left for Scotland to deal with. That is simply sabotage of Scotland's industrial future."
Previously one expert in Chinese affairs, Ian Williams, had said the facility in the Highlands would give China “enormous power” over the electricity grid, which could pose “an enormous threat”.
He said that Ming Yang is “massively subsidised” by the Chinese government and Chinese law means companies are obliged to work with the security services when it comes to issues of national security and espionage.
