Electricity grid, will the UK’s anti-China move have an impact on Cdp Reti?
The company that manages the UK electricity grid is removing the components of a company controlled by the Chinese state of the State Grid group, which is also present in Italy: it owns 35% of Cdp Reti (which has shareholdings in Terna, Snam and Italgas). Facts and numbers
National Grid, the company that manages the UK's electricity transmission network, is starting to remove components from a Chinese state-owned company to protect itself from cyber risks. The decision was made – as reported by the Financial Times – on the advice of the National Cyber Security Centre, a division of the Government Communications Headquarters (GCHQ), the British government company that deals with security and espionage.
The supplier from which National Grid is breaking away – both legally with the termination of the contract and concretely with the dismantling of the equipment – is NR Electric UK, the British subsidiary of Nari Technology, a company controlled by the Chinese state that deals with technologies for energy and for automation.
EVERYTHING ABOUT NARI TECHNOLOGY
More specifically, Nari Technology creates components for the efficient management of electricity networks. It is based in Nanjing and is listed on the Shanghai Stock Exchange with a valuation of almost 21 billion euros.
51.4 percent of Nari Technology's shares belong to Nari Group, according to Bloomberg ; Nari Group is in turn part of State Grid Corporation of China, the state company that manages the country's electricity grid and the largest electricity infrastructure company in the world.
CONSEQUENCES FOR ITALY TOO?
State Grid Corporation owns 35 percent of CDP Reti, the subsidiary of Cassa Depositi e Prestiti which manages shareholdings in Italian energy infrastructure companies: Terna (electricity), Snam and Italgas (gas).
In the photo, from 2014, the former president of Cassa Depositi e Prestiti Franco Bassanini and the former CEO Giovanni Gorno Tempini (current president of Cdp) shake hands with the State Grid delegation for the signing of the bilateral agreement.
Last July Reuters wrote that the shareholders' agreement between Cassa Depositi e Prestiti and State Grid for Cdp Reti "expires at the end of November but will be automatically renewed for a period of three years, the sources explain. Both groups had the right to communicate to the other party their intention not to renew the agreement at least six months before the next expiration, but they did not make use of it […]. The dossier is under the attention of the government, says one of the sources, without clarifying whether it is the executive's intention to place conditions on the renewal".
Two weeks ago Giorgia Meloni's government canceled the agreement with China for Italian participation – since 2019, a unique case among the G7 countries – in the so-called "New Silk Road", Beijing's great political-infrastructural initiative. The government has also used special powers ( golden power ) over Pirelli to limit the role of Chinese shareholders and protect the company's technologies.
A RISK FOR THE SECURITY OF THE ELECTRICITY NETWORK
The problem with NR Electric UK is that its management technologies may pose a security risk to the UK, given the strained relationship between London and Beijing. The company's components, useful for monitoring and balancing the levels of electricity supply and demand (and therefore preventing blackouts), are used to automate interactions between energy systems and the grid.
National Grid is NR Electric UK's largest customer, and decided to end contracts last April. An employee of NR Electric UK told the Financial Times that National Grid has not provided an explanation and that the company can no longer have access to the sites where its components were installed: there are fifteen in total, in England and Wales.
ALL THE UK'S ANTI-CHINESE MOVES IN CRITICAL INFRASTRUCTURE
It is not clear – writes the Financial Times – whether NR Electric UK equipment is still present in the British electricity grid. It is not the first time, however, that the UK government has decided to limit Chinese presence in its critical infrastructure. In 2022, for example, it had already restricted the activities of Chinese companies involved in managing the electricity grid; in 2020 it banned the use of Huawei components in 5G telecommunications networks .
Furthermore, in 2022, the British government paid around 100 million pounds to take over the share of China General Nuclear (a state company) in the Sizewell C nuclear power plant project, carried out by the French EDF.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/uk-rete-elettrica-cdp-reti-cina/ on Mon, 18 Dec 2023 09:10:14 +0000.