‘Protectionist’ rejection of China’s State Grid misses real energy security issue

August 18, 2016

The Australian government’s decision to block the 99-year lease of 50.4% of our largest energy grid to the State Grid Corporation of China has been dubbed “protectionist” by China’s Ministry of Commerce. The government agency says the decision will impact the willingness of Chinese companies to invest in Australia.

Much of the public debate on the issue to date misses important commercial and technical aspects of the State Grid bid.

State Grid is already a very successful international energy player with investments in the Philippines, Portugal, Australia, Italy, Hong Kong and Brazil. It has signed contracts or is in negotiations with South Africa, Ethiopia, Mozambique, Congo and India.

It is hard to imagine that State Grid would risk its global reputation by wilfully endangering the national security of any of its partners. The reason for State Grid’s rapid overseas expansion lies in its ability to provide cutting-edge technology, finance and operational expertise for ultra-high-voltage (UHV) electricity transmission grids.

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