The Blog - Wind energy market analysis

Posted 28/03/2018

Richard Heap


Why are Russian trolls so interested in US wind farms?

The US government has said that Russian hackers and trolls are waging war on its electricity grid and energy policies – but why? Richard Heap reports


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Russian hackers have been waging war on the US energy grid. That’s the finding of an alert put out by the Federal Bureau of Investigation and Department of Homeland Security this month, though it didn’t give detail about whether they’ve succeeded.

Meanwhile, Russian trolls are fighting an aggressive social media campaign to try to shape the views of Americans about different power sources, and affect US energy policy. That’s the conclusion of a US House of Representatives report, which also came out this month.

Naturally, both should be a concern for those investing in the US wind sector, and it may be tempting to see the first as the bigger issue. Undoubtedly, if hackers can disrupt the electricity system then that could hit production at wind farms, or cause blackouts in the whole grid, and have a significant impact on wind farm owners.

We’ve written before in our Premium newsletters about why investors must take this seriously (subscribers only).

However, given all the discussion this month about the use of social media to influence elections, we’re more intrigued by the trolls.

The House of Representatives investigation says that the Kremlin-linked Internet Research Agency – a troll factory – put thousands of posts on Twitter, Facebook and Instagram from 2015 to 2017 in order to stir up controversy about US energy policy. The aim was to help Russia to achieve its geopolitical goals.

And this is where it gets interesting for wind investors. On one hand, the Russian government has been looking to these trolls to promote messages that support de-carbonisation, which includes talking up the potential of wind farms; and, on the other, it has been looking to ramp up the debate about climate change by showing it as a ‘liberal hoax’. Why take up these two conflicting positions?

Well, Russian foreign policy is never simple. In 1939, Winston Churchill famously referred to the county as “a riddle wrapped in a mystery inside an enigma”, and it is no different under the leadership of Vladimir Putin. Even so, we'll give it a go.

In supporting de-carbonisation, the trolls were looking to make the case for ‘alternative’ sources, including wind and solar farms, in a bid to head off US support for shale gas fracking. This includes amplifying messages from green groups that it felt might be able to stop the use of fracking – and so keep the US reliant on Russia for fossil fuels. This may be beneficial for the wind industry but it still makes sense for investors to be aware of who their friends are and why.

Not that it worked. Since 2014, the US shale gas revolution has helped to drive down crude oil prices from over $100 a barrel to under $60, which has hit Russian energy interests. And the wind sector has also seen strong growth in the US since the extension of the production tax credit for the wind sector in late 2015. These are turning the US from a net energy importer into a net exporter.

Meanwhile, in spreading doubt about climate change, the trolls were seeking to sow discord in the debate about US energy policy; and breed public discontent in policies being pursued by political ‘elites', including fracking. It’s a familiar trope from recent UK and US elections, and we expect this part of the battle to continue.

And despite the evidence, there will be an enduring debate about climate change and the extent to which human beings are responsible for it. Social media will make sure of that. While it may enable people from around the interact with each other, it also gives a perfect vehicle for conspiracy theories to take root, and help people to reinforce their opinions rather than to alter them.

There are steps that can be taken to protect energy investors. The US government is aware of Russian attempts to influence the energy market, and said it’s committed to running a market free from overseas interference. This doesn't mean it will be able to control the discussion, but at least it's aware of the threat. That’s a start.

The other good point for wind investors is that support for wind and other renewables is not just about climate change any more. The falling cost of wind power means the industry’s prospects are now tied more to price and reliability than green concerns.

It won’t stop the information war – but, for now, should give US wind operators some protection from it and confidence in wind’s long-term prospects.

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