Trump order blocks foreign grid equipment

President Donald Trump signed an executive order on Wednesday preparing to block utilities from connecting some foreign-made equipment to the bulk power system. The order targets equipment like transformers, batteries, inverters, and associated software and digital products, citing an "extraordinary foreign threat."

The White House stated the order focuses on transactions involving foreign nationals that pose an undue risk of sabotage, unauthorized access, or other disruption. It is aimed at non-distribution level equipment. The directive gives the Secretary of Energy 120 days to develop rules for implementation.

Scope and Authority

The executive order also contemplates the replacement of already-installed equipment. It allows the Energy Secretary to impose conditions on the continued use, operation, maintenance, servicing, or updating of foreign-manufactured or operated bulk-power system equipment acquired before the order's date.

The White House said the rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production has increased the nation's dependence on reliable electricity. This dependence magnifies the consequences of a successful attack, according to the administration's fact sheet.

Industry Response and Concerns

Utilities are committed to working with the Department of Energy on the order's implementation. The goal is to maintain the reliability and affordability of electricity across the country, according to Edison Electric Institute spokesperson Dani Marx. The institute represents investor-owned power companies.

Manufacturers of grid equipment say they are still digesting the order and will likely need clarification on several aspects. Bridget Bartol, head of industry and regulatory affairs at the National Electric Manufacturers Association, said the order builds off of 2020 Executive Order 13920, which focused on large power transformers from China. "I see this as kind of an update and expansion," she told Utility Dive.

However, Bartol warned of potential market confusion. "We want to make sure that we continue to engage with the administration," she said. Software, in particular, may raise questions about what it means to be designed and developed by a covered foreign entity. She noted the order does not call out particular countries. "There's a need for a lot more clarity," Bartol said, anticipating a lot of dialog between industry and the administration.

Broader Context

The Edison Electric Institute last year estimated U.S. electric utilities would invest $1.1 trillion in the 2025-2029 period. This represents a rapid increase in capital expenditures to meet rising demand. The trade group noted capital expenditures from 2015 to 2024 totaled $1.3 trillion.

According to the International Energy Agency, China accounts for 80% or more of the world's production of certain grid equipment. This includes lithium-ion battery cells and some solar components. Bridget Bartol of NEMA said, "We've made a lot of progress on ensuring robust supply chains domestically and with our partners."