Workers install overhead power lines for an 800KV direct current electricity transmission project linking northwest China's Qinghai Province and central China's Henan Province, in Zhen'an County of northwest China's Shaanxi Province, May 8, 2020. (Xinhua/Tao Ming)

The Australian government is being urged to review the role of Chinese companies in its grid system for fear of "remote sabotage." Experts say the concern is far-fetched given the extremely robust regulations on foreign investment, and the politically triggered move could hinder opportunity to bring cheaper and more stable electricity to Australian households. 

According to Australian news outlets, South Australian senator Rex Patrick is pushing the federal government to conduct a review of Chinese electricity companies, and even consider removing some of the equipment because of the fear that the grid system could be built with "malicious components."

"It shows that Australian politicians really have no knowledge of the country's power equipment import regulations and standards," Sheng Honglei, an electricity industry insider based in Beijing, told the Global Times Monday.

"These politicians are low-grade science fiction screenwriters," Sheng said. 

Sheng explains that the power system in Australia is a chain grid, and it is extremely weak. It means any imported equipment has to go through strict tests on security and stability before entering the market, eliminating any possibility of any components being surreptitiously installed without Australians knowing. 

According to an insider of a Chinese state-owned power enterprise who has undergone the process of exporting electricity equipment to Australia, imported electricity equipment is subject to extremely rigorous regulation, as well as assessment from independent third parties. Each equipment supplier is also required to sign a contract of security, strictly limiting data transmission to local operators.

The insider said that remodeling the equipment to Australian types and to meet Australian technical standards was not cost-efficient and his company eventually abandoned the deal. 

Patrick's proposal came after the intensified suppression on Chinese businesses in the US. At the beginning of May, US President Donald Trump signed an executive order prohibiting foreign companies from providing equipment for use in the US grid system. Last year the US authorities also seized a transformer imported from China for inspection. 

But by following the US, Australia is also risking the interests of ordinary households, as China's expertise in electricity provision and grid system upgrades can help reduce their high running costs, Yu Lei, a chief research fellow at the Research Center for Pacific Island Countries, Liaocheng University told the Global Times Monday. 

"Some electricity companies in China are the only ones in the world capable of providing a stable, one-time upgrade of large-scale power grid systems," Yu said, "Electricity in Australia is around 0.6 Australian dollars ($0.43) per kilowatt, far more expensive than the average price of 0.5 yuan ($0.072) and it is still rising every year." 

Due to its competitive price for equipment, China has become an important source of electricity equipment supplies in Australia. In 2018 and 2019, 29 out of the 70 imported transformers to Australia come from China. In December 2012, the State Grid Corporation of China acquired the 41 percent of shares of ElectraNet from the Australian electricity provider Powerlink.