US Electrical Grid Dependent on China–Made Transformers

“Every single way you look at it, modern society is not prepared to live without electricity,” says Tommy Waller, the president and CEO of the Center for Security Policy and an expert on the U.S. grid. He’s also featured in the documentary “Grid Down, Power Up.”

In a recent episode of “American Thought Leaders,” host Jan Jekielek and Mr. Waller discussed the vulnerabilities of the United States’ electrical grid, why the industry and our government have failed to correct these problems, and what happens if the grid goes down.

Jan Jekielek: In May 2020, President Trump signed an executive order declaring an emergency around the national grid. This happened after one of these large, high-voltage transformers in the grid made by a Chinese manufacturer was inspected by authorities. The results of that inspection are classified, but this grid emergency ensued. Tell us what happened.

Tommy Waller: On May 1, 2020, an executive order declared a grid security emergency. It recognized that our bulk power system has become dependent on certain countries hostile to the United States, including communist China. In this case, the transformer was seized by the federal government in 2019 and brought to Sandia National Laboratory, where it was inspected.

Many experts consider these extra-high-voltage transformers to be the backbone of our modern grid. If this device that we depend on for the lifeblood of our modern civilization could be manipulated or turned off, then that would be extremely problematic for us. It’s a vector of attack that the Trump administration tried to address through executive order. Unfortunately, on the first day of the current Biden administration, that executive order was suspended. Our nation has since imported about another 100 transformers from China. There are now somewhere around 400 in the U.S. grid.

When we say the grid, we’re talking about the whole system that generates electricity, transmits it, and distributes it. This transmission normally occurs over long distances. These extra-high-voltage transformers are needed to step up the voltage and then to bring it back down. It’s that high voltage that allows it to travel those long distances. These assets are absolutely critical.

If that transformer stopped working for any reason, then you’re not moving that electricity from where it’s produced to where it’s needed. The assets themselves, the large ones, may take years to produce. The lead time for that production has gone from about a year to more like four years, and there’s only so many of those assets. We can’t afford to lose them for any reason, whether it’s because they were manufactured with the malicious intent of manipulating them, or because they’re somehow attacked.

Mr. Jekielek: What does a situation look like where power goes down in a significant portion of the country?

Mr. Waller: In 1977, there was a 24-hour blackout in New York City. It was a natural form of an electromagnetic pulse [EMP], a lightning strike that hit a substation in New Jersey. In that 24-hour period, more than 4,500 looters were arrested, more than 550 police officers were injured in the line of duty, and there was over $300 million worth of damage in that city.

Think about our dependence on electricity. If you’re in an urban environment, you lose water right away. Refrigeration is critical to our food system, and that depends on electricity. Every single way you look at it, modern society is not prepared to live without electricity. In short order, you have suffering and chaos.

Mr. Jekielek: “Grid Down, Power Up” asserts that taking down just nine of these power stations or substations around the entire United States could result in a complete failure of the grid.

Mr. Waller: “Grid Down, Power Up” covers that, but it wasn’t the documentary that discovered this. It was actually the federal government, the Federal Energy Regulatory Commission [FERC], which oversees our bulk power system. This came in the wake of a physical attack and sabotage. In April 2013, a substation outside of San Jose [California] was attacked by a gunman.

FERC did a classified study in the wake of that attack. They discovered that if an adversary knew which nine substations to attack, this could cause cascading failures that could black out the whole country for an extended period of time. Some may remember the great Northeast blackout of August 14, 2003, when there was a cascading failure from a tree branch in Ohio striking a transmission line. That single point of failure caused a cascading blackout that resulted in 55 million customers losing power, some for up to two weeks. Whether it’s Mother Nature or a human adversary, the system can be taken down if it’s not properly protected.

Mr. Jekielek: How did we start importing these absolutely critical pieces of infrastructure?

Mr. Waller: In the same ways we as a nation came to depend on China for lots of different things. We know that the CCP [Chinese Communist Party] has been executing unrestricted warfare against the rest of the free world, predominantly the United States. One method of unrestricted warfare is looking for the critical vulnerabilities of a society and figuring out how to exploit them.

In this case, what the Chinese did was genius. They realized that these transformers need a certain type of steel to be manufactured, grain-oriented electrical steel. What do the Chinese do? They dumped into the market massive amounts of grain-oriented steel. They cornered the market for the precursors that are needed to create the transformers. I’m sure you and your viewers are familiar with the inexpensive aspect of purchasing products from China, which is made possible by slave labor, if you want to call it that.

Mr. Jekielek: By multiple factors, but yes.

Mr. Waller: Exactly. The CCP uses these different factors to corner the market on an asset that any modern civilization needs to survive. That put a lot of other manufacturers out of business. The utility industry has to make an investment in a transformer and asks, “What’s the price of these things?” Any investment is going to result in the utility spending money and all of us who pay electricity bills paying more, the more the utility spends. It’s understandable for them to look to save money. That’s one avenue that the Chinese used to get into that market by providing these transformers.

Today, our country needs to identify where these transformers are and get them inspected. Then we need to produce these domestically or else have our allies produce them while ensuring they are not using components from communist China.

Mr. Jekielek: How many have been inspected to date?

Mr. Waller: We know that one was inspected at Sandia National Laboratory. That’s all we know. We know that a president of the United States declared an emergency on May 1, 2020, so we know this is a big deal. The good thing is that even if the federal government isn’t moving as fast as it should, the states are waking up.

Texas, for example, has its own grid. The last legislative session passed the Lone Star Protection Act or Infrastructure Protection Act. It was designed to identify whether critical infrastructure components were coming from adversaries to make sure problems like this don’t happen in that state.

Mr. Jekielek: The cornering of the market for these high-voltage transformers is as much a military decision as it is a state business decision. An interview that came out later by an expert said they found something in this transformer that would allow it to be turned off remotely.

Mr. Waller: We imported this massive 500,000-pound electric transformer from China. They decided to send it to one of our national labs when it came into the country. They found hardware in it that had the ability for somebody in China to switch it off.

Mr. Jekielek: This is just one shocking way that the system can be compromised. But we also have other potential routes. Please give us a picture of these.

Mr. Waller: We talked about physical sabotage like what happened in California. We just saw this in North Carolina at the end of last year with rifle fire. There’s lots of different ways you can harm the grid: cyber attack, a localized electromagnetic attack, a directed energy weapon, or a nuclear electromagnetic pulse.

There will also be blackouts if we continue some of the policies of our government. You can’t shut down large baseload powered generators like nuclear, coal, and fossil fuel plants and replace them with renewables, when the sun only shines and the wind only blows intermittently, and at the same time electrify everything.

The grid is also vulnerable to threats from Mother Nature. It’s 100 percent certain that at some point the grid will go down because of solar weather. That’s a warning I’ve personally issued at least twice to Secretary of Energy Jennifer Granholm. So far, it doesn’t look like we’re doing what we need to do about it, even though it’s a completely fixable problem.

In fact, just this past March, there was a massive solar storm, and it happened to be on the opposite side of the sun. Had it traveled toward Earth, we might not be having this interview right now. The reason is that these highly charged particles react with the Earth’s magnetosphere. In fact, in the northern latitudes, people can see the Aurora Borealis, the Northern Lights, which is the visual depiction of the electromagnetic energy generated when these particles slam into our magnetosphere.

In 1921, there was a solar storm. They call it the railroad storm because there were railroad stations in Connecticut and throughout the Northeast that caught fire and burned to the ground. Why did they catch fire? Because the telegraph lines were 100-plus kilometers long and had ground-induced currents from a solar storm that caused sparks and fires.

Those currents go into our transformers. The level of protection we have from the current standards is so low that the grid will go down if we have a significant storm. When I say that it’s 100 percent certain, all I’m saying is that the level of protection we have now and the standards that have been set by the industry and approved by the government guarantee that the grid goes down if we suffer a solar storm of significant magnitude.

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