Texas senators warn foreign-linked tech could threaten the state's power grid

An influential Texas Senate committee met Wednesday to consider ways to protect the state’s power grid from foreign adversaries, with some lawmakers also taking an opportunity to bash renewable energy.

Solar panels and battery storage, the two fastest-growing resources on the state’s electric grid, are heavily dependent on equipment made in China or tied to Chinese companies. China is by far the largest global producer of clean energy technology.

Thus far, there have been no documented cases of foreign-controlled parts in solar arrays or energy storage projects being used to attack U.S. power grids, said Sean Gallagher, senior vice president of policy for the Solar Energy Industries Association.

But there’s still a risk that foreign actors could connect to software embedded in a Texas-based project and manipulate it to destabilize the state’s grid, according to experts who testified at Wednesday’s Senate hearing. 

“If it’s just a monitoring level of connectivity, there’s no risk there,” said Will Wassdorf, a lawyer with the Texas Attorney General’s office. “If it’s a level of connectivity that provides access or control where they could turn the batteries off, that would be another issue.”

Last fall, the attorney general’s office launched an investigation into an energy storage project southeast of Dallas that allegedly used components from Contemporary Amperex Technology Co., a firm that the U.S. government claims has ties to the Chinese military. 

In 2021, the Texas Legislature passed a law prohibiting business contracts with companies owned or controlled by citizens of China, Russia, Iran and North Korea, if that company would be able to directly or remotely access critical infrastructure such as the electric grid. Companies headquartered in those countries face the same restrictions.

Afterward, the Electric Reliability Council of Texas required all companies with projects connected to the state’s grid to attest that they’re compliant with that law, according to Chad Seely, the nonprofit grid operator’s general counsel. One company that wasn’t compliant was disconnected from the system, he said. 

ERCOT also asked all companies to report whether they’d purchased any critical grid equipment or services from firms with ties to the four adversary countries.

Roughly one out of 10 companies reported purchasing such products, almost entirely from Chinese firms, according to Seely’s presentation. All of those companies, however, told ERCOT the foreign firms wouldn’t access or control that equipment without authorization, Seely said.

That wasn’t reassuring enough to lawmakers, who repeatedly noted that no agency inspects at-risk projects to verify companies’ claims or detect suspicious systems. 

State Sen. Lois Kolkhorst, R-Brenham, who authored one of the most restrictive renewable energy bills last legislative session, was particularly disturbed by ERCOT’s findings. 

“These are sobering discoveries. If I just sent this out in an e-newsletter in Senate District 18, I can tell you, they’re going to show up with pitchforks at my office,” she said. “Nobody wants the renewables anyway in their district, and now we find out it’s littered with foreign enemy countries.”

Solar trade associations that testified at the hearing said they shared the legislature’s goal to secure the Texas power grid. They also emphasized that solar arrays and battery storage projects have become increasingly important to powering the state’s economic growth, as they make up a growing portion of the grid’s overall supply mix. 

“Anything that’s digitally connected is potentially hackable,” Gallagher said. “So the focus needs to be … not so much on where a particular machine comes from, but how it’s controlled, who has access to controlling it and how it’s operated.”

The solar trade groups said the best solution would be scaling up domestic manufacturing. If all announced factories come to fruition and produce at full capacity, the entire Texas market could be supplied with Texas-made inverters, one of the most at-risk components, Gallagher said. 

Meanwhile, lawmakers debated options to mitigate risk until domestic manufacturing scales. Banning companies from buying grid components from China, for example, could increase electricity costs, said state Sen. Nathan Johnson, D-Dallas.

ERCOT’s Seely said lawmakers could consider passing legislation to prohibit companies from buying products from specific firms. 

Emma Stewart, chief power grid scientist at the Department of Energy’s Idaho National Laboratory, said her recommendation would be inspecting equipment, protecting companies who inspect from being sued, and securing vulnerable equipment.

“Remediate the problems, rather than just completely ripping them off the system,” she said.