Chinese companies barred from building key parts of Dutch power grid

Minister Rob Jetten for Climate and Energy is changing the electricity law to give state-owned grid operator TenneT more options to exclude risky companies from tenders. The change is aimed at barring Chinese parties from vital parts of the Netherlands' electricity network, Financieele Dagblad reports based on Jetten's answers to parliamentary questions.

The planned amendment to the law is prompted by growing concerns about national security. “The government is very aware of the risks of possible unwanted interference in the European energy infrastructure,” Jetten said in a letter to parliament. He stressed that “it is not the case that by definition all Chinese-made products or services pose a threat to national security.”

Still, he’d rather be cautious and keep these products out of vital infrastructure. That happened with a TenneT tender for two large power sockets at sea. The Ministry of Economic Affairs and Climate halted the tender for these offshore platforms where power from offshore wind farms comes together and is passed on to the onshore grid because of a “potential safety risk.”

A spokesperson for TenneT told FD that the Ministry did not intervene, but TenneT itself asked for clarification on how to deal with Chinese parties in tenders for vital infrastructure. The Ministry did a security check and discovered some security risks. TenneT then informed the “Chinese parties that wanted to participate that they were no longer allowed to do so.”

The legislative amendment does not mean that there will be no Chinese parties in the Dutch power grid, only in the parts considered vital. For example, earlier this year, TenneT awarded a large cable contract to a consortium of Boskalis and Chinese company Ningbo Orient. The cables aren’t considered vital infrastructure.

TenneT will also announce on Thursday that it is changing its tender process, according to FD. Until now, TenneT outsourced each socket separately. Now the grid operator will tender all 15 to 20 connections scheduled for development until 2030 in one go. The tender will happen via a cooperation agreement with selected parties that must have a proven track record in the relevant technology in Europe. According to TenneT, that excludes Chinese companies.