A Chinese company is planning to build a wind farm on 130,000 acres near Laughlin Air Force Base in Del Rio, Texas. The builder is Houston-based GH America Energy—a wholly-owned subsidiary of Chinese Guanghua industry investment group. Its CEO, a member of the Communist Party and a former member of the Chinese military, purchased the property in 2015. The project, however, has many officials in the United States concerned about the security of the U.S. power grid and the proximity of the farm to U.S. Government facilities.
Besides the nearby Air Force base, San Antonio is home to an NSA facility, a cyber command, and a number of universities that work with the federal government on intelligence matters. Not long ago, President Trump closed the Chinese consulate in Houston because of possible espionage involving U.S. universities and their research. The Chinese were trying to steal information on our response and tests for identifying COVID-19. According to Texas Congressman Will Hurd, the Chinese wind farm is currently going through a national security review process that involves the FBI and the Department of Energy.
Besides the national security issue, there is also an issue about reciprocity since China would probably not let a former U.S. military officer build a wind farm in China near government facilities and allow it to be tied into its electric grid.
Besides wanting to build a wind farm on U.S. soil, China has also become the world’s leading supplier of transformers, which also presents significant challenges to U.S. grid security. On May 1, President Trump issued an Executive Order on protecting the bulk-power grid. For economic and security reasons, he stated that the United States should no longer purchase transformers and other electric grid equipment manufactured in China. He signaled that it is important to end relationships that U.S. utilities have directly with Chinese businesses and multi-national companies manufacturing transformers in China, which are later plugged into the electric grid in the United States.
Chinese power equipment can be embedded with software and hardware that can be remotely accessed, enhancing China’s ability to commit cyberattacks. Because power transformers are huge, and weigh between 100 and 400 tons, it is not easy to identify embedded software or hardware. There is also a potential hardware risk since counterfeit items can be easily put into large power transformers.
This issue surfaced in a 2014 Department of Energy report. In its 2014 report, the Department of Energy found that there were six domestic manufacturers of power transformers in the United States, whereas over 30 power transformer manufacturers existed in China. The six U.S. manufacturers were only able to produce about 40 percent of U.S. demand. Since 2009, the United States has become highly dependent on Chinese transformers. Over 200 Chinese transformers were brought into the U.S. energy sector in the 10 years preceding 2019. Prior to that, there were none.
Chinese transformer manufacturers are prospering. JiangSu HuaPeng Transformer Company has recently completed projects for customers in Houston, Las Vegas, and New Jersey. On August 5, Baobian Electric shipped the first of its three phase reactors to the New Mexico Public Utilities Service Company. TBEA Transformer Industrial Group exports its products to over 30 countries in Asia, Africa, Europe, and the Americas.
Note that this transition from American made transformers to Chinese made transformers occurred during the Obama-Biden Administration. Furthermore, Biden’s ‘clean energy” plan will result in the need for an abundance of new transformers as he transitions the U.S. electricity system into a predominantly renewable (wind and solar) system. If we are concerned about potential threats to our electric grid, then clearly the new transformers should not be imported from Chinese manufacturers.