Huawei was banned from Britain's networks. Now it's in the energy grid

Telegraph

23-03-2025

Five years after it was banned from Britain's 5G network, Huawei is bruised but not defeated.
While the Chinese tech champion is no longer allowed to operate in sensitive communications networks, the company has found other markets to operate in. One little noticed area where the company has established a foothold is an increasingly crucial industry for Britain: solar power.
Huawei manufactures products such as solar inverters, which convert current to allow solar energy to pass into the grid. As of 2022, Huawei had a 26pc share of the European market for these devices, according to Wood Mackenzie.
The tech giant has inked a number of deals with UK companies including Lightsource Labs, a subsidiary of BP. Asked in 2021 what Huawei's aims were for the UK market, one executive said it was 'to make solar one of the top renewable energy sources '.
China has come to dominate the global market for clean power, manufacturing much of the technology needed for technologies such as wind and solar power. Huawei is one among many Chinese manufacturers that make parts for clean technology.
Yet if Huawei's presence in the communications network raised concerns, should we now be worried about its role in the energy grid? And as Britain races towards net zero, is the country sleepwalking into a fresh national security crisis?
'It is a potential vulnerability,' says Sir Richard Dearlove, the former head of MI6. 'China is not a friendly nation – it is a highly competitive nation and, in certain circumstances, it's an adversary.'
Lingering security concerns
The decision to ban Huawei from the UK's 5G networks in 2020 followed scrutiny of the company's links to Beijing and fears its equipment could be used for espionage. It was not taken lightly: the decision delayed the country's 5G rollout and is thought to have cost BT at least £500m.
Oliver Dowden, the culture secretary at the time, said: 'This has not been an easy decision, but it is the right one for the UK telecoms networks, for our national security and our economy, both now and indeed in the long run.'
Concerns centred around Huawei's links to the Chinese state. National security laws require all citizens and organisations to help Beijing if required and Ren Zhengfei, Huawei's founder and chief executive, served in the People's Liberation Army for almost a decade before founding the company.
Elsewhere, there are lingering concerns over Huawei's wider business practices. Just last week, raids were carried out across Belgium after more than a dozen MEPs were accused of taking bribes from the tech giant, ranging from 'excessive gifts such as food and travel expenses or regular invitations to football matches'. Five people have now been charged.
Huawei last week said it took the allegations seriously, adding: 'Huawei has a zero-tolerance policy towards corruption or other wrongdoing, and we are committed to complying with all applicable laws and regulations at all times.'
The company has always denied it is a security risk and made efforts to address any concerns raised. However, the Government's 5G decision led the company to wind down its operations in the UK. A £1bn plan to build a new research campus near Cambridge has been quietly shelved.
But the tech titan, which remains the biggest smartphone manufacturer in China, has not disappeared completely. It has a number of partnerships with UK universities, including its ICT academy at Henley Business School. More alarming for many, though, is the company's presence in Britain's energy sector.
The exact scale of Huawei's energy business in the UK is hard to ascertain, though insiders insist it is small. The latest accounts available show the group's UK subsidiary generated revenues of £229m in 2023 – a steep decline from £1.3bn in 2019 – but does not break this down by sector. Huawei continues to sell smart devices such as watches and earbuds in the UK, while it also carries out maintenance on its remaining network equipment.
In the accounts, bosses said: 'Moving forward, the company will focus on the sale of products and services that are not impacted by the UK or US restrictions.'
The solar power problem
While Huawei is perhaps the most recognisable – and infamous – of China's tech companies, it is not the most significant player in Britain's solar industry.
Chinese firms including JinkoSolar and JA Solar have played a crucial role in manufacturing panels for UK solar farms, while others such as Mingyang Smart Energy have been tapped to make turbines for offshore wind farms.
Britain is reliant on Chinese manufacturing as Ed Miliband, the Energy Secretary, pushes ahead with plans to shift the country to entirely green electricity by 2030.
Security experts say the dangers associated with products such as solar inverters and smart battery systems are limited. After all, how interested would Beijing be in data on a British household's energy consumption? Telecoms networks, by contrast, pose a much greater threat of espionage and intelligence gathering.
Nevertheless, China's role in the rapidly growing renewable energy market does give Beijing leverage. Kemi Badenoch, the Leader of the Opposition, last week warned that Britain's race to reach net zero was making the country 'dangerously reliant' on China.
'You've got Ed Miliband's ridiculous pursuit of net zero which is going to cause this country massive problems,' says Sir Richard.
He has urged Mr Miliband to drop his ambitions to reach net zero by 2050 and instead focus on energy security.
'The whole issue is one of inter-connectedness. We need to be looking at energy security and the idea that energy security depends on renewables manufactured in China is just completely bonkers.
'The Government seems to accept the risk, but they don't know how to manage the risk in the medium to long term, so it's a hostage to fortune.'
Dan Marks, an energy security analyst at the Royal United Services Institute (Rusi), a defence think tank, warns risks could also develop as power networks become increasingly digitised.
'With sufficient market penetration, smart grid services could potentially become a national security concern and the same is true, although to a lesser extent, with utility-scale batteries,' he says.
'There are several assessments ongoing to determine whether the existing safeguards are adequate or need adapting as the energy system changes and distributed smart systems become more critical to the grid.'
Drastic measures
For Sir Richard, the best solution would be an outright ban, although he concedes such a drastic measure would be complex. At the very least, systems should not be 'Chinese-technology dependent,' he says.
'I think in the way the world is going we should have a general policy of excluding them to the extent that it's practical and possible, which it is if you focus on the issue.'
For most observers, the prospect of a full-blown ban is unlikely. Huawei's supporters point out that the UK is now feeling the effects of its sluggish 5G after the rollout was delayed by the telecoms ban.
Analysts at Rusi warn that Beijing's dominance in the renewable energy sector means the UK's net zero ambitions will be 'near impossible' without some input from China.
As a result, ministers now face a crucial decision: are reservations about Chinese technology strong enough to intervene in Britain's energy sector? Or will the desire to hit net zero outweigh any national security concerns?
A government spokesman said: 'We would never let anything get in the way of our national security, and while we would not comment on individual cases, investment in the energy sector is subject to the highest levels of national security scrutiny.
'We are undergoing rigorous processes to look at the role of China in our supply chain – taking into account the national security considerations, as well as our need for investment in critical infrastructure.'