The utility sector is facing unprecedented challenges in sourcing critical equipment. Cyber threats are on the rise, and tariffs are reshaping procurement strategies. To address these concerns, it’s essential to build a resilient domestic supply chain that delivers reliability, security, and long-term cost stability.
The Supply Chain Risks Utilities Can’t Ignore
- Cyberattacks on U.S. utilities have surged by nearly 70% in 2024, exploiting vulnerabilities in operational technology, including SCADA systems, smart grid infrastructure, and substation automation.
- With overseas sourcing, utilities have limited visibility into potential security risks embedded in their supply chains.
- Tariffs are reshaping procurement strategies, with the US only accounting for around 20% of transformer demand, and China providing most imported low-voltage transformers, and Canada providing a significant percentage of high-voltage switchgear.
Simultaneously, the American Society of Civil Engineers’ recent downgrade of U.S. energy infrastructure to a D+ in their 2025 Infrastructure Report Card, citing aging grid systems and transformer shortages, underscores the urgency of securing the energy supply chain.
Securing the Energy Storage Revolution
The growth in battery energy storage systems (BESS) adds another critical dimension to supply chain security. While China currently dominates battery cell production, expanding American manufacturing capacity for both cells and electronic components is essential for true energy independence.
| Current Status | Challenges | Solutions |
|---|---|---|
| U.S. has less than 10% of global battery cell manufacturing capacity | Strategic vulnerability as demand for grid-scale storage accelerates | Expanding domestic cell production reduces dependency on extended supply chains and creates thousands of high-skill manufacturing jobs |
| Electronic components present an immediate opportunity for North American suppliers to address cybersecurity vulnerabilities | Utilizing local suppliers to enhance cybersecurity protections |
Securing battery cells is vital for grid reliability, and recent DOE investments signal recognition of this dual imperative: secure both the physical supply chain and the digital control systems.
A Bipartisan Path Forward
Remarkably, strengthening domestic manufacturing has become one of the few areas where both political parties find common ground. The Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act all passed with crucial bipartisan support in key areas.
- The Inflation Reduction Act provides incentives for domestic manufacturing, such as tax credits and grants for investments in new industries.
- The CHIPS Act prioritizes investments in advanced manufacturing and semiconductor production.
- These bipartisan initiatives recognize that energy security transcends political divides, and are about American competitiveness, national security, and job creation.
Private fixed investment in U.S. manufacturing nearly doubled from 2021 to 2023, providing a major opportunity for utilities. Domestic manufacturing means shorter supply chains, improved quality control, and greater cybersecurity protections.
American-Made, Secure-by-Design
Forward-thinking utilities are prioritizing domestic sourcing with several key strategies:
- Secure-by-Design Manufacturing: U.S. facilities integrate cybersecurity best practices from the ground up.
- Zero-Trust Supply Chain Security: Utilities verify every component before deployment.
- AI-Powered Monitoring: Artificial intelligence tracks supply chain integrity, flagging anomalies in component sourcing.
- Industry-Wide Collaboration: Utilities, manufacturers, and policymakers work together to create resilient domestic supply chains.
Major manufacturers like GE Vernova, Schneider Electric, and Honeywell have endorsed the DOE’s Supply Chain Cybersecurity Principles, signaling commitment to enhanced security measures.
The Call to Action
Utility leaders must take proactive steps to reshape procurement strategies and strengthen U.S.-based supply chains:
- Conduct comprehensive cybersecurity risk assessments on energy infrastructure under NERC CIP-013
- Support the development of a comprehensive national grid hardening plan and transformer inventory as recommended by ASCE.
- Develop sourcing roadmaps that prioritize domestic manufacturing
- Advocate for policies that incentivize U.S. battery cell and control system manufacturing
Strengthening the Grid and the Nation
The convergence of cybersecurity threats and shifting trade policies presents both a challenge and an opportunity. Utilities and suppliers that prioritize domestic manufacturing—from battery cells to control systems—will protect their infrastructure while contributing to a broader industrial renaissance that strengthens national security, creates jobs, and will result in long-term energy resilience.
This isn’t just about managing risk. It’s about building a better, more secure future for the entire energy sector—one that starts with American-made components at the heart of our evolving grid.
About Torus
Torus is a leading provider of energy industry solutions, dedicated to helping utilities and suppliers navigate the complex landscape of energy security, manufacturing, and supply chain management.
We offer a range of services, including cybersecurity risk assessments, supply chain optimization, and manufacturing strategy development.
