US Order Curbs Foreign Bulk-Power System Gear

A new U.S. executive order declares a national emergency to secure the bulk-power system (BPS), creating significant uncertainty for energy and data-center infrastructure projects. The order invokes the International Emergency Economic Powers Act to authorize the Department of Energy (DOE) to prohibit or impose conditions on transactions involving BPS equipment designed, manufactured, or supplied by entities with ties to designated foreign adversaries, including China and Russia. The rule applies to transactions initiated after August 26, 2026, and its broad scope covers critical hardware like transformers, turbines, inverters, and battery energy storage systems, as well as associated software, firmware, and digital services. Sophisticated counsel should advise clients that the order also empowers the DOE to regulate already-installed equipment, though immediate replacement mandates are not anticipated. Project developers, suppliers, and financiers must now conduct urgent supply-chain diligence and revise contracts to allocate potential costs from procurement delays, equipment substitution, or future DOE enforcement actions. The key next development is the DOE's issuance of implementing regulations, which are due by December 24, 2026.