Mumbai blackout should serve as warning shot for EU on China

BY QRIUS

According to a new report by US intelligence company Recorded Future, a widespread Mumbai power outage last year—a blackout which left 20 million people without electricity, brought vital railways to a standstill and forced Covid-19 wards to rely on backup generators—may have been part of a broader cybercampaign by the Chinese state. More specifically, the disruption may have been engineered to send a thinly veiled message that if India pushes too hard on geopolitical issues, Beijing has the power to cripple the country’s electric grid.

The unsettling research, publicized in the New York Times, should accelerate India’s efforts to curb its dependence on Chinese-made hardware for vital sectors like energy and transport. However, the report should also serve as a wakeup call for other regions, such as Europe, which have allowed Chinese companies to gain footholds in their critical infrastructure. Although the EU appears to have woken up to the threat posed by Huawei with regard to telecommunications technology, it has not yet fully recognized the risks inherent in other sectors – such as energy. Unless these are addressed, the EU risks the possibility of a similar disruption to its electric grid as India experienced last fall.

Cyber sabotage?

The Recorded Future study seems to corroborate reports last fall in the Indian press suspecting Chinese involvement in the power outage. The disruption to the electric grid, apparently, can be traced back to the ongoing dispute over China and India’s shared Himalayan border. In June 2020, a violent skirmish resulted in the deaths of over 20 Indian soldiers, marking the first hostile fatalities in the region in almost half a century.

At the same time, apparently, Chinese malware began flowing into essential control systems which manage India’s electricity supply—malware which allegedly made its presence felt last October when the state load dispatch center in Padgha went offline, causing some parts of Mumbai to lose power for 12 hours. Even more concerningly, the Recorded Future report indicates that the majority of malware remains inactivated, fueling fears that the Mumbai outage was nothing more than an initial flexing of Beijing’s muscles to remind Delhi of its capabilities. It will almost certainly have reminded Delhi of the necessity of weaning its critical industries off of Chinese-made hardware as swiftly as possible.

Lessons for Europe

Europe would do well to pay close attention to India’s woes—and to reassess its own strategies as a result. Thankfully, the continent does seem increasingly aware of the threats which Chinese companies may pose to its 5G infrastructure. As of March 1^st, France has begun the process of removing Huawei wireless equipment from its metropoles, and other European economies are following suit.

At the same time, European government contracts awarded to Chinese businesses have skyrocketed in recent years, doubling in value to almost €2 trillion in 2020. European firms have warned that they are being undercut on their own home turf by Chinese state-owned or subsidized companies. As one economist at the French bank Natixis summarized the situation, “In effect, European taxpayers are paying the Chinese government to build their infrastructure […] that is worrisome”. It’s worrisome not just from an economic perspective—but because there are real security risks involved with allowing companies with close connections to the Chinese government and intelligence services to gain substantial influence in vital European sectors such as energy.

Renewable overreliance

Indeed, the energy sector is of particular concern, especially as the EU moves to accelerate its green transition. Brussels’ ambitions to drastically increase its wind capacity are already threatened by the fact that China is home to six of the top 10 wind turbine suppliers worldwide, while more than 90% of certain rare-earth elements essential in forging the turbines are found in the country—something that is particularly concerning given Beijing’s precedent for withholding rare-earth exports, such as in 2009.

The situation is even more worrying when it comes to solar power. While Huawei has been progressively squeezed out of the West’s telecommunications industry, it still wields outsize influence in the solar sector, where it was the largest supplier of solar inverters for the fourth year running in 2019, with 22% of the market share. Given that these inverters are an essential element of any solar power system and are capable of regulating (and potentially disrupting) the flow of electricity in the grid, it’s unsurprising that some Western lawmakers have sounded the alarm over the potential security implications of integrating Huawei products into the grid.

In fact, the Chinese firm shuttered its US solar business after a bipartisan group of American senators advocated for banning Huawei equipment from the country’s solar grid, arguing that Huawei-produced inverters would leave the electric grid “vulnerable to foreign surveillance and interference” and could give Beijing a back door through which it could interfere with the supply of electricity.

Mumbai warnings must not go unheeded

European lawmakers have yet to focus the same scrutiny on Huawei’s solar products—but the reports of Beijing’s meddling in India’s power grid should spark an international reckoning over the use of Chinese-made equipment in sensitive energy infrastructure. Indeed, it appears that the very politically motivated disruption of power grids that so alarmed American lawmakers may already be occurring.

The “unprecedented” grid failure which Mumbai suffered last October had significant knock-on effects, in and of itself. Final-year exams in Mumbai schools were postponed; countless citizens were stranded inside darkened trains and railway stations; and the power cut was uncharitably described by The Wall Street Journal as “an embarrassment for India as it seeks to attract foreign investment”. The finding that the blackout may have been due to Chinese sabotage, rather than technical glitches, should shift blame away from Indian grid operators. At the same time, it raises the prospect of a sword of Damocles hanging over India’s electric supply—and that of any other countries whose dependence on Chinese-made components leaves their essential infrastructure open to manipulation by Beijing. 

Source: https://qrius.com/mumbai-blackout-should-serve-as-warning-shot-for-eu-on-china/