Addressing cyber risks in the energy sector is critical not only to energy security, but is also vital for a resilient state and economy; finds a new World Energy Council report. The report highlights that energy companies have seen a massive increase in the number of successful cyber-attacks over the past year.
The critical role that the energy sector plays in the functioning of a modern economy, with its increasing interconnection and digitisation, with the emergence of smart grids and smart devices, make the energy sector a highly attractive target for cyber-attacks aimed at disrupting operations. In a worst case scenario these attacks can result in infrastructure shut down, triggering economic and financial disruptions or even loss of life and massive environmental damage.
The report “The road to resilience: managing cyber risks”, published by the Council in collaboration with Swiss Re Corporate Solutions and Marsh & McLennan Companies, was launched at the Energy Day in Berlin, Germany, on 29 September. The report investigates how cyber risks can be managed taking into account the changing nature of the energy industry and energy infrastructure.
Christoph Frei, Secretary General, World Energy Council, says, “Cyber threats are among top issues keeping energy leaders awake at night in Europe and North America. Over the past three years, we have seen a rapid change from zero awareness to headline presence. As a result, more than 30 countries have put in place ambitious cyber plans and strategies, considering cyber threats as a persistent risk to their economy.”
“What makes cyber threats so dangerous is that they can go unnoticed until the real damage is clear, from stolen data over power outages to destruction of physical assets and great financial loss. Over the coming years we expect cyber risks to increase further and change the way we think about integrated infrastructure and supply chain management,” adds Frei.
The report illustrates the rapid growth of cyber risks highlighting past attacks and potential cyber incident scenarios plus insurance claims implications. Effectively addressing cyber risk demands much higher public awareness, in governments and utilities.
Jeroen van der Veer, Executive Chair, Financing Resilient Energy Infrastructure study, and former CEO of Royal Dutch Shell, says, “The energy sector must take a systemic approach and assess cyber risks across the entire energy supply chain, improve the protection of energy systems and limit any possible domino effects that might be caused by a failure in one element of the value chain. Nevertheless, measures that require supply chain compliance or cross-border cooperation are more difficult to implement, and require increased cross-sector cooperation.”