In a significant development, U.S. President Donald Trump has passed an executive order which proposes to “monitor and replace” any U.S. power grid equipment made by the nation’s foreign enemies.
According to analysts, the move would mainly impact Chinese products such as electrical transformers.
Under the current rules, contracts are awarded to the lowest bidder. This is seen as being exploited by those with malicious intent.
Tender systems, including for bulk power systems procurements, that award contracts to the lowest bidder, creates a “vulnerability that can be exploited by those with malicious intent.”
It is imperative that “the bulk-power system be secured against exploitation and attacks by foreign threats,” said U.S. Secretary of Energy Dan Brouillette.
This will mean that the U.S. will now set up a whitelist for procurements of equipment.
Analysts see China and Russia having the capability of posing a threat to U.S. power grid systems.
“It’s an important set of issues and similar to the debate that’s occurring around (companies like) Huawei, ZTE in 5G. Clearly you want to have visibility and confidence across your entire supply chain,” said Frank J. Cilluffo, director of Auburn University’s McCrary Institute for Cyber and Critical Infrastructure Security.
He went on to add, the move is a “prudent step” aimed at securing “the most critical of critical infrastructure,” since virtually all other infrastructure rely on the power grid to function. “Just because the dependence is so great. When you look at the implications of COVID-19 and everyone working from home, people are becoming more and more aware of some of those vulnerabilities”.
“I think you’re going to see closer scrutiny across all of our critical infrastructures.”
The term “bulk-power system” refers to facilities and control systems necessary for national power grids.
According to Trump’s executive order, the U.S. Department of Energy will review control center, large-scale power generation machines, power generation turbine engines, high-voltage circuit breakers, transformers and other electrical power equipment, to “identify, monitor and replace as appropriate.”
Last week, the U.S. Department of Commerce also announced that it will start a Section 232 investigation to determine whether the volume of imported transformers and related parts threatens America’s national security.
China has been exporting large power transformers to the U.S. at low prices with its domestic transformer market showing signs of overcapacity.
In 2019, Charles Durant, deputy director of the U.S. Department of Energy’s Counterintelligence Office, noted that over the past decade, more than 200 Chinese large power transformers have entered the U.S. energy system.
“Before that, this number was zero.”
There were precedents of hackers attacking a country’s power grid, said Cilluffo.
On December 23, 2015, the Ukrainian power system suffered a cyberattack that caused a large power outage. Ukraine said that Russian security services were behind the attack.
“So if you think about our dependency on electricity, it’s not only that immediate structure, it transcends to all of our critical infrastructure,” said Cilluffo.