Outsourcing Critical Grid Systems: Security Implications for the U.S. Power Sector

The U.S. electric power sector's reliance on outsourcing and offshoring has grown over the years, raising serious security concerns for vital grid systems. In search of lower costs and specialized skills, utilities and vendors more frequently source essential equipment and software development from abroad. Today, many key components of the grid—from large transformers to control system software—are designed or manufactured overseas. For example, industry analysis shows that capacitor film for grid applications is almost entirely produced overseas, with about 75% made in China, and estimates indicate that the U.S. spends nearly $200 billion annually on imported capacitor film and other critical grid materials.