“One of the things with batteries is they catch on fire,” Patrick Miller, CEO of Ampere Industrial Security, tells CSO. “So, if I had the ability to put the battery into a physical state or make it more prone to catch on fire, that’s a problem because in some cases, depending upon the size of the installation of these batteries, that would be a really big fire. Get a foam truck kind of fire.”

“Power systems operate based on what are known as frequency and voltage conditions,” Miller explains. “You’re spending all your efforts trying to balance a power system; power coming in and going out have to match.” It doesn’t take a lot to destabilize the system. “There are ways to take batteries and use just enough subtle condition changes to upset that delicate balance in the power system, and you can destabilize the power system by modifying these conditions in subtle ways,” he says.

It’s not the batteries themselves that are the inherent source of risk. It’s that for any battery management system, “you can manipulate what it is putting into or pulling off the system,” Miller says.

Manipulation of the battery system doesn’t have to cause a fire or explosion to do real damage, according to Miller. “Once the system starts to get destabilized, in order to protect the system, it starts either turning off generation — it sends a signal that says you’re pushing too much generation, you’re going to harm the system — or trip generation offline or trip load offline, which is effectively a blackout.”

For its part, CATL says, “CATL’s energy storage products sold to the US contain ‘passive’ devices only, which are not equipped with communication interfaces that may enable CATL to control the sold products. Additionally, CATL’s US products do not have the capability to collect, transfer or send data and therefore do not pose any security threats.”

Regarding grid integration, the company says, “CATL products cannot interact directly with or affect the US electrical grid. CATL provides energy storage batteries to US integrators, and because it is the integrators that manage connections to the grid and the grid operators set up an additional layer of security measures, CATL products can in no way interact with it.”

Miller thinks that CATL’s defense is misleading. “There’s a control system that sits on top and it’s also Chinese-made. So, it may not be made by CATL, but it’s likely made by a partner company or another Chinese company. The Communist party can effectively manipulate all companies in China.” So CATL’s defense of providing only passive products is “not an exonerating factor,” he says.

Coping with a Chinese-dominated battery market

Duke’s use of CATL projects is not an isolated instance. The company has also deployed CATL batteries in three Florida County BESS projects. Dominion Energy has deployed CATL batteries in a Virginia project. Primergy Solar, which builds, owns, and operates energy storage and solar projects used by utilities across North America, is working with CATL on a storage project in Nevada.

Countless other utilities in the US have no doubt deployed CATL batteries. CATL is by far the largest storage battery provider in the world, boasting a nearly 40% market share. Duke’s desire to work with an American manufacturer of batteries is ambitious, given that none of the current top ten manufacturers of storage batteries are American, and eight of them are Chinese rivals to CATL.

At least in the short term, most utilities will be forced to depend on likely cheaper Chinese battery suppliers. Miller says that the top of the US energy sector’s dependence on Chinese batteries was much-discussed at the Department of Energy’s Grid Modernization Summit in early February.

“Everybody was talking about how to operate knowing that is the case,” Miller says, citing several precautionary measures companies are taking to limit any damage China could cause. “There are even companies that are looking at doing physical state changes and detections of those. So that’s how far we’re already thinking in front of this. We know that China has pwned all of this stuff. We have that as an expectation.”

The bottom line is that most utilities don’t have a choice right now except to use Chinese hardware and technology, but they can develop strategies to defend against the worst-case scenarios. “We don’t have the choice because, first of all, no one else makes the stuff, and no one else makes it at that price at that scale,” Miller says. “If we’re being pushed to modernize and do all these things, meet these goals, we’re stuck between a rock and a hard place. The only other option is to go ahead, buy it, put it in service knowing that at some point it may need to be defended and disconnected.”