China and the US Electric Grid

A US federal executive order was issued on 1 May 2020 which proposes to “monitor and replace” any US power grid equipment made by its foreign adversaries. Security professional said it would mainly affect Chinese-made products like electrical transformers. The US Department of Energy (DOE) stated under the current US procurement rules, contracts are awarded to the lowest bidder when it comes to bulk power system procurement. That creates a "vulnerability that can be exploited by those with malicious intent."

US Secretary of Energy reported it is crucial that “the bulk-power system be secured against exploitation and attacks by foreign threats.” Analysts interpret the order as the US setting up a whitelist for future procurement of such equipment. Although the order did not name any specific countries, researchers believe China and Russia are the two main countries most capable of posing a threat to the US power grid.[1]

Chinese companies like Huawei and ZTE, in 5G, are of concern. US authorities report that the Executive Order is a “prudent step” aimed at securing “the most critical of critical infrastructure,” because virtually all other critical resources and key infrastructure rely on the power grid to properly function. The COVID-19 pandemic has forced many to work from home, which has catapulted these electric grid vulnerabilities to the forefront. Many believe the US will be taking a closer look at foreign equipment intrusion in all US critical infrastructures. The term “bulk-power system” refers to facilities and control systems necessary for national power grids.

The goal is to: 'Identify, Monitor and Replace' all Russian and Chinese electrical equipment. Under the Executive Order, the DOE will review grid control centers, 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.”

In conjunction, the US Department of Commerce announced on 11 May, it will start an investigation to determine if the volume of imported transformers and related parts threatens America’s national security. A DOE official said that US electric power companies are buying national electric-grid systems, such as power transformers from foreign adversaries, because of the lowest bidder provision.

China has been exporting large power transformers to the US at relatedly competitive prices. Of interest is its domestic transformer market is showing signs of overcapacity. A DOE report in 2014 said that there are about 30 manufacturers in China that can produce transformers of 220 KV or kilovolts and above, and large international manufacturers such as ABB[2] were setting up factories in China. An ABB (a Zurich Switzerland based international electric supply company) issued a press release last month stating: “ABB’s Power Grids business has won several major orders to supply advanced HVDC converter transformers and high-voltage equipment for three 800 kilovolt (kV), ultrahigh-voltage direct current (UHVDC) transmission links, owned by the State Grid Corporation of China (SGCC), in China. The links will help in integrating hydro, wind and solar power generation, while reducing CO2 emissions. Financial details were not disclosed.” Over the past decade, more than 200 Chinese manufactured large power transformers have been introduced into the US energy system. Before 2019, the number was zero.

The DOE expressed that there were precedents of hackers attacking other a country’s power grid. On 23 December 2015 and then a follow up attack to following December of 2016, the Ukrainian power system suffered cyberattacks that caused a large power outage. Ukraine allege the Russian security services were behind the attack.

ABB was checked through Red Sky Alliance, RedXray and the results are below:

ABB has over 29,000 threat type ‘hits.’ These indicators present a problem with ABB. If this company is in partnership with Chinese companies, they are in essence in partnership with the Chinese Communist Party (CCP). Red Sky Alliance offers RedXray and RedXray-Plus tools that are an enhanced version of Red Sky Alliances’ RedXray daily cyber alert service. RedXray is an extremely easy way to identify and help mitigate threats like with ABB. RedXray-Plus has an on-line dashboard that will show the intelligence behind the listed cyber threats. RedXray services allow businesses to be notified daily of any cyber threats, without requiring a network connection to the business organization. There are multiple-use applications for banking, finance, insurance, healthcare, automotive groups, and any other organization that handles Personal, Private, and Financial information. If your business is having cyber issues, the problem can be identified quickly and easily to mitigate potential problems.

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