Concerns Over Chinese-Made Communication Devices in Energy Infrastructure

US energy officials are currently reevaluating the risks linked to Chinese-manufactured devices essential for renewable energy systems. This comes after reports of suspicious communication devices being found within these technologies, according to two informants.

Power inverters, primarily sourced from China, play a crucial role in linking solar panels and wind turbines to the electrical grid. They also feature in batteries, heat pumps, and electric vehicle chargers.

While inverters are designed to allow remote access for updates, utility companies typically set up firewalls to block any direct communications with China.

However, unauthorized communication devices not documented in product details were discovered by a US expert who examined a Chinese solar inverter connected to the grid, looking for security vulnerabilities. Over the past nine months, similar undocumented devices, including cellular radios, have appeared in batteries from various Chinese suppliers.

Reuters could not determine the exact number of affected inverters and batteries. These rogue components create additional communication pathways that could bypass firewalls.

The informants remained anonymous, as they lacked authorization to disclose information to the media. Mike Rogers, a former director of the US National Security Agency, suggested that China may be counting on the extensive deployment of inverters to limit the West’s ability to address security concerns.

A representative from the Chinese Embassy in Washington criticized the generalization of fears regarding Chinese infrastructure.

These unauthorized devices could potentially bypass firewalls, shut down inverters remotely, alter settings, destabilize power grids, damage energy infrastructure, and cause large-scale blackouts. One insider remarked, “It effectively means there’s a built-in way to physically destroy the grid.”

Neither informant was willing to reveal the names of the Chinese manufacturers linked to the rogue devices, nor the total count discovered. Notably, the US government has yet to publicly acknowledge these findings.

The US Department of Energy (DOE) stated it is continuing to evaluate risks related to emerging technologies, emphasizing the challenges manufacturers face in documenting their features.

Additionally, the DOE mentioned ongoing efforts to bridge disclosure gaps through tools like “software material invoices,” which provide inventories of components within software applications along with other contractual requirements.

As US-China tensions escalate, a reevaluation of China’s role in critical infrastructure is underway, driven by fears of security vulnerabilities, according to two former officials. In February, some US senators introduced legislation aimed at reducing dependency on foreign batteries, specifically prohibiting the Department of Homeland Security from acquiring batteries from certain Chinese firms over national security concerns. This bill is still pending enactment.

The proposed measures target six Chinese firms with ties to the Chinese Communist Party, including Modern Amperex Technology Company (CATL) and BYD Company. None of these companies provided comments when approached.

Utility companies are reportedly preparing for a similar ban on Chinese inverter manufacturers. For instance, Florida Power & Light Company, the largest utility in the US, is looking to limit its use of Chinese inverters by sourcing alternatives.

A DOE spokesperson indicated that as domestic manufacturing gains momentum, efforts are being made across the federal government to fortify the US supply chain, thus enhancing the integration of trustworthy equipment into the power grid.

Huawei stands as the largest global supplier of inverters, commanding a 29% share of the market in 2022, followed by other Chinese companies like Sangrow. Despite this, German solar developer 1KOMMA5 has opted to avoid Huawei products due to security concerns.

Philip Schroeder, CEO of 1KOMMA5, remarked that the ramifications of utilizing Chinese inverters today carry far greater implications than a decade ago, especially given the growing capacity of renewable energy on Western grids.

Since 2019, the US has limited Huawei’s access to its technology, labeling the firm as a national security risk—an assertion Huawei denies. Experts also highlight that Chinese companies are legally obligated to collaborate with China’s intelligence entities, thereby giving the government possible control over Chinese-made inverters linked to foreign grids.

Though Huawei exited the US inverter market in 2019, it continues to dominate elsewhere. In Europe, even minor disruptions in energy control—just a few gigawatts—can lead to significant power supply issues, experts warn.

The European Solar Power Council estimates that over 200 GW of solar power capacity in Europe relies on Chinese-made inverters, equivalent to the output of over 200 nuclear power plants. By the end of last year, Europe had installed a total of 338 GW of solar energy, according to the Industry Association SolarPower Europe.

“If someone manages to control enough residential solar inverters and executes a coordinated attack, it could have catastrophic effects on the grid over time,” warned Uri Sadot, cybersecurity program director at Israeli inverter manufacturer Solge.

Other nations, such as Lithuania and Estonia, have begun acknowledging the energy security threats posed by such technologies. Lithuania’s government has enacted a law restricting remote access to substantial solar, wind, and battery installations, effectively barring the use of Chinese inverters.

Estonian authorities have echoed similar concerns, suggesting risks to vital sectors if Chinese technology is not banned. The Estonian Defense and Climate Ministries opted not to comment on whether they are considering action.

In the UK, government evaluations of China’s renewable energy technologies are currently underway, with findings expected in the coming months. A recent commercial conflict between inverter providers Solark and Deye exemplified the risks of foreign influence on local electricity supplies, raising concerns among government officials.

Reuters could not determine how many inverters were impacted or the extent of the disruption to the grid. The DOE declined to provide comments regarding this incident, and both Solark and Deye did not respond to inquiries.

Typically, energy sectors monitor other industries, including telecommunications and semiconductors, in their efforts to mitigate China’s influence. Security analysts stress that protecting energy infrastructure is crucial, particularly given that household solar and battery systems often fall below standard security thresholds.

NATO officials have indicated that China is intensifying its efforts to manage key infrastructure, including inverters, within member states. “We need to identify strategic dependencies and take steps to reduce them,” said a NATO representative.