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The Inflation Reduction Act of 2022 has steered U.S. energy policy, for now, firmly in the direction of Europe’s massive expansion of wind and solar power. Unfortunately, this rush ignores the most important aspect of energy policy: national security.
If you don’t have security, nothing else matters. Just ask Ukraine.
And there are three key features of the "energy transition" that put freedom-loving countries at risk and should worry our military strategic planners: increasing geopolitical dependencies, especially on China, wealth and knowledge transfer to China, and greater vulnerability in the event of a military confrontation.
The lion’s share of the energy transition involves wind, solar and batteries, and China utterly dominates global production in all three of these areas. (iStock | Getty Images)
It is easy to imagine the consequences of becoming dependent on unfriendly nations for energy, we can simply look to Germany as a cautionary tale.
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In the wake of the 2013 tsunami in Japan which damaged the Fukushima Nuclear Power Plant, Germany decided to shutter all of its nuclear power plants, leaving them significantly more dependent on Russian natural gas. When Russia decided to invade Ukraine in 2022, Putin doubtlessly calculated that Europe’s resistance, especially Germany’s, would be neutered because of its dependence on Russian gas.
Though far from certain during the early days of the invasion, thankfully Europe did not capitulate and has largely weened itself (at great cost) of Russian gas.
While it’s clear that Putin’s ambitions in Ukraine were emboldened because of Europe’s dependency on Russian energy, it’s not hard to imagine that a similar dynamic is unfolding in Taiwan. Should military conflict come to this region, the global economy would face two daunting challenges- a significant dependence on the Taiwanese semiconductor industry, and an even greater dependence on the Chinese energy and mineral sectors.
The lion’s share of the energy transition to renewable energy involves wind, solar and batteries, and China utterly dominates global production in all three of these areas. They currently control 80% of most stages of the solar value chain, with this market share predicted to rise to 95% in the coming years. China also manufactures 60% of the world’s wind turbines and almost 60% of EV batteries (including 85% of battery cells).
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Alarmingly, China also has 80% of the refining capacity of the raw materials required for battery electric storage systems (BESS), which are required in massive quantities at wind and solar power plants.
The combined global solar, wind and battery manufacturing market in 2023 was nearly $500 billion. To put this in context, even in 2005, America’s "peak oil import year," the U.S. only transferred $400B (in 2023 dollars) overseas to buy oil, something we have been lamenting for decades because of its potentially adverse geopolitical implications.
We are now on track to send a similar amount of capital overseas again, much of it (perhaps most of it) to China. This will, of course, strengthen the Chinese Communist Party (CCP), a political entity overtly fixated on replacing the U.S. as the global geopolitical leader.
But we are not only transferring wealth to China, we are also transferring knowledge. Roughly half of the science and engineering Ph.D. candidates in the U.S. are (still) foreign born, with Chinese students receiving the largest percentage of student visas in 2023.
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Unfortunately, higher education is not the only way to obtain knowledge. In a stunningly blatant attempt to steal U.S. government research, the Chinese government in 2022 attempted to recruit 154 researchers at Department of Energy (DOE) laboratories. Speaking off the record, a senior DOE manager recently confirmed to me that 15% of their scientists and engineers are citizens of "sensitive countries."
America rightly takes pride in its generosity and openness, especially when it comes to education. But training our rivals and allowing them to infiltrate critical areas like energy research is akin to the Yankees allowing Red Sox baseball players to infiltrate their spring training.
In addition to the challenges of strategic dependencies and wealth transfer, domestic renewable energy facilities also face serious cyber and kinetic vulnerabilities.
An engineer at a California solar plant, wishing to remain anonymous, recently shared with me a story about the Chinese company BYD, one of the world’s largest battery manufacturers.
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In order to perform battery maintenance, the California operator has to call BYD, which shuts down the facility remotely from China. When the concerned engineer asked a California state official if this constituted a security risk, he was told that "BYD has ensured us (the state of California) that they would never let politics interfere with their maintenance of a power plant in America."
Indeed.
In fact, the nature of the renewable facility electronics, mostly made in China, make them seriously vulnerable to malicious cyberattack. What’s more, when it comes to physical attack, the geographically dispersed and unguarded nature of wind and solar facilities make them soft-targets.
In 2017, the University of Tulsa in Oklahoma demonstrated that they could take down an entire wind farm by gaining physical access to just one turbine, which only required cutting one lock. From there it was a simple matter to hack into the rest of the supposedly "air-gapped" farm.
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In any military conflict with China, American citizens should assume that they would lose much of their wind and solar power capacity to both cyber and kinetic attack.
Some may say these concerns are unfounded, even alarmist. But such naïve claims ignore alarming geopolitical trends.
In recent years, China has been increasingly aggressive, attacking and even sinking civilian ships in the South China Sea, perpetrating a de facto annexation of Hong Kong, and routinely violating Taiwan’s sovereign airspace with massive simulated air strikes.
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Unsurprisingly, at the 13th National People’s Congress in 2018, Chinese leader Xi Jinping said, "We are resolved to fight the bloody battle against our enemies… with a strong determination to take our place in the world."
To quote Maya Angelou, "When someone shows you who they are, believe them the first time."
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