CHINA
By contrast with the nuclear sector, there does not appear to be a threat from investment: the wider UK Energy sector is diverse and competitive, and therefore, while there is little information available on the scale of China's investments in the UK Energy sector, the size of the sector means that these will be proportionally less significant. Overall, there is no evidence that China's investments in UK Energy amount to a 'critical mass' of control over the sector that would cause concern.
The primary threat appears to be in relation to Intellectual Property (IP). The Chinese government has a strategic imperative to acquire technology that will enable it to improve and increase its domestic energy production. However, as it is likely that China will remain reliant on imports for much of its energy requirements in the medium term, it also needs to secure its energy supply overseas, including through the direct acquisition of energy assets (such as oil fields). The Deputy National Security Adviser noted that China's principal concern was to "[ensure] it has got technology to sustain its own energy consumption".[1]
As a result, the National Cyber Security Centre (NCSC) assesses that China presents a *** cyber espionage threat to the UK Energy sector.[2] *** The UK Intelligence Community assesses ***.[3] Chinese cyber actors have previously targeted the UK Energy sector; in ***, a FTSE 100 energy company, was compromised, with commercially sensitive information stolen.[4]
Despite this threat, in evidence, the NCSC was keen to emphasise the importance of investment to the sector:
Chinese interest is live and it is also really good investment. You know, utilities, and our network operators and oil and gas and electricity and smart meters are really good investments in terms of economic terms, and it fulfils the requirements as I said before that Chinese, in building their own energy knowledge, legitimately acquiring IP by buying companies and driving that commercial agenda that we have repeatedly referred to, so it meets the domestic and the economic criteria.[5]
There have been suspected incidents of hostile reconnaissance by *** at Energy CNI sites ***: we were told ***.[6] ***
***.[7]
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