The UK government has approved a significant battery storage project with connections to China after a national security review. Chancellor of the Duchy of Lancaster Pat McFadden has greenlit the development of an 80-megawatt storage plant near Grimsby, which is financed by US investment firm BlackRock and KX Power, a UK-registered asset manager linked to Chinese investors. This approval is one of the first national security reviews since Labour took power.
Led by KX Power’s CEO Zhe Zhang, a former Chinese diplomat, the project aims to establish up to two gigawatt-hours of storage capacity, potentially making it one of Britain’s largest grid battery operators. The government’s approval includes minor conditions, such as requiring KX Power to inform the Cabinet Office of any changes to the power “offtaker” and placing restrictions on data sharing to address potential national security risks.
Concerns have been raised about KX Power’s connections to China, particularly due to its opaque ownership structure and links to Chinese state-owned enterprises. The firm is controlled by overseas entities, including a British Virgin Islands-based company named Infinity-Star Holdings. Despite these concerns, the approval indicates a possible shift in the UK’s stance on Chinese investment in critical infrastructure, coinciding with Foreign Secretary David Lammy’s reported plans to visit China, suggesting a recalibration of UK-China relations under the Labour government.
The battery storage facility will have the capacity to store 160 megawatt-hours of electricity, enough to power approximately 20,000 homes daily. This project is crucial for enhancing the UK’s renewable energy infrastructure, as it supports energy security and facilitates the transition to cleaner power sources by balancing the grid and storing excess renewable energy. While the project’s approval reflects a more open attitude towards Chinese investment in the energy sector, it underscores the ongoing challenge of balancing economic opportunities with national security concerns in a complex geopolitical environment.
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