Can China Turn Off Our Power?

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* Disclosure for the quote from the Clive Maund article published on March 24, 2025

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The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.

U.S. federal government officials have found undisclosed communication devices on the power inverters of some Chinese-manufactured solar panels, according to a report published last week by Reuters.

The devices raise security concerns because Chinese companies are required to cooperate with Chinese intelligence agencies.

That could enable the Chinese government to skirt firewalls and switch off the inverters remotely, or change their settings, destabilizing power grids, damaging energy infrastructure and triggering blackouts, according to the Reuters report.

"That effectively means there is a built-in way to physically destroy the grid," one of the unnamed sources told Reuters.

According to Reuters' report, it's actually happened before. In November 2024 solar power inverters in the United States and elsewhere were disabled from China.

A Chinese government spokesperson responded to the allegations by telling Reuters, "We oppose the generalization of the concept of national security, distorting and smearing China's infrastructure achievements."

Chinese companies are the largest manufacturers of power inverters used by manufacturers of solar panels, wind turbines, and other types of renewable power components worldwide.

And according to a report this week by Jan Vermeulen for MyBroadband, the "rogue communication devices" were also found in some phone batteries from Chinese companies.

Electrical Grid Is 'World's Biggest Machine'

The electrical grid is the "world's biggest machine, and it's remarkable that it rarely breaks down," Walter Frick wrote for Bloomberg on March 30. "When it does, it can have spectacular impacts, as the shutdown of London’s Heathrow airport last week clearly showed."

Electricity demand in western countries "has been flat or falling for decades, which has led the industry to delay capital spending on new equipment and push existing equipment to sweat harder and run for longer," Frick wrote. "Now that calculus is changing. Utilities are seeing a rapid rise in electricity demand spurred by electric cars and heat pumps, along with massive buildout of data centers for artificial intelligence. That's on top of extreme weather impacts causing more outages."

The danger was highlighted recently when an electrical transformer sent Europe's busiest airport into darkness, affecting nearly 300,000 passengers, diverting or canceling more than 1,400 flights, and costing airlines an estimated 100 million pounds in lost revenue and passenger care expenses.

Flights at London's Heathrow Airport were able to resume the next day. While the cause was ruled either human error or equipment malfunction, the incident drew attention to aging electrical grids: a U.S. government report from 2024 found that more than 70% of the country's electrical grid is more than 25 years old.

Need for Solutions That Can Respond Quickly

In a report called "Innovative Grid Deployment" put out by the U.S. Department of Energy, there's a "need for greater deployment of available solutions that can quickly respond to accelerating grid pressures, including the need to cost-effectively expand transmission and distribution capacity to support demand growth, enhance system reliability and resilience, and support integration of utility-scale and distributed clean energy resources."

The report discussed many options, such as virtual power plants (VPPs) and improved energy storage, distributed energy resource management systems (DERMS), and advanced electricity transmission technologies and data management systems. Virtual power plants can use energy stored at the grid's edge in people's homes and businesses to virtually deliver power to where it's most needed at any given time. DERMS are the systems that help manage a grid and make that possible.

"Recognizing the imperative to expand and advance grid modernization in the near term, DOE has dozens of initiatives and funding programs to support the electric industry across grid research, development, demonstration, and deployment, including technology, regulatory, policy, and commercialization support," the report said.

Eguana Technologies Inc.

Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTC), a leading provider of high-performance energy systems, creates systems give utilities flexibility to increase feeder growth incrementally.

On March 24, the company announced it was collaborating with Itron Inc. "to deliver advanced utility control functionality through a standards-based integration of its energy storage systems with Itron's IntelliFLEX grid-edge DERMS solution."

Eguana and Itron will jointly, and independently, market the combined solution to respective utility customers, with a focus on utilities that are interested in ramping up distributed energy storage procurement but prefer to use a grid-edge dispatch and monitoring network that is already well established and integrated into their operations, the company said in the release announcing the partnership.

"This integrated solution marks a major milestone for the industry," Eguana Chief Executive Officer Justin Holland said. "No longer will residential energy storage systems be consigned to simply supplying backup power with the occasional optional dispatch for demand response. The integrated IntelliFLEX with Evolve opens the door to deploying energy storage assets as an essential contributor to grid capacity and infrastructure."

"Grid interactive battery energy storage is one of the most flexible assets we have available on the grid today," Itron Senior Vice President of Outcomes Don Reeves said.  "Through this collaboration with Eguana, we are demonstrating how to take advantage of IntelliFLEX, an advanced AMI-enabled grid edge DERMS, as a pathway toward local customer resource management and quantified distribution network value."

Analyst: Advantages Will Be 'Huge'

Eguana's Evolve VPP uses smart batteries at the edge of the grid (the homes and businesses that use the energy) tied to software that helps distribute and store energy in the batteries when it's not needed and makes it available to the grid at peak times.

*"The rickety traditional centralized grid structure is at or close to its limits and requires transformation," wrote Technical Analyst Clive Maund about the company on March 24. "The advantages of this transformation will be huge — a massive increase in capacity, vastly more efficient utilization of power generated, decreased demand on centralized power generation, and protection of the end user, corporate or private, from power outages."

Maund said he viewed the stock as having an "exceptionally positive risk/reward ratio" and rated it a Strong Buy for all time horizons, with targets of CA$0.20; CA$0.60, CA$0.70, CA$1, or CA$2.

Ownership and Share Structure

According to the company, about 0.5% is owned by management and insiders.

24.6% is held by the Japanese ITOCHU Corp., the company said.

The company's market cap of CA$4.29 million, according to Refinitiv. Its 52-week range is CA$0.05 and CA$0.20.