Why Does the Cybersecurity in Energy Sector Matter?

The importance of the energy sector is indisputable. At the same time, something so crucial to the functioning of societies is also a tasty morsel for hackers. And because of its complexity, it can also be exposed to violations or malfunctions. So how to ensure cybersecurity in the energy sector?

While the energy generated by power plants is invisible, its efficiency depends on the security of purely physical components such as pumps, boilers, and valves. All these elements are managed by systems using, e.g., cloud technologies and various types of custom software that potentially can be compromised. How can we protect it? Let's start with where the weak points are.

What are the vulnerabilities of the energy networks?

Energy companies must take into account the risks at the level of:

• IT systems - all systems that keep the business running, as well as the database management software.
• OT infrastructure - including hardware and software related to the production, storage, and sale of energy, using cloud and industrial IoT solutions.

It can already be seen here that securing the vast energy supply chain is quite a challenge.

That is why the primary protection method is the mere use of cloud technologies to disperse the data crucial for the company's operation. Simply put, keeping your vital data away from the company's end-user and hardware makes it more secure.

Cloud computing in the energy sector

Thanks to the use of the cloud, the processes of energy companies can be:

• flexible,
• scalable,
• available on-demand.

And yet, due to their long tradition and relatively slow evolution, many energy companies are reluctant to digitize.

However, 81% of these, which eventually do transform, admitted they could innovate faster with the public cloud rather than on-premise solutions (report here). It's worth it if you imagine the rush of the energy industry to meet society's expectations and legal requirements regarding sustainability. People are increasingly aware of the importance of going green, which imposes certain obligations on the entire business.

As you can see, without proper care for security, energy companies will not only disappoint their customers, but it will also be even more difficult for them to switch to the green side of the force.

Fortunately, RES companies are well aware of the importance of maintaining the security of critical systems. Most of them were created recently, in a tradition where such things were a matter of course. But that doesn't yet apply to the entire industry.

Colonial Pipeline compromised

In May 2021, a group of hackers completely blocked the operation of Colonial Pipeline's IT systems. And that is the largest refined oil pipeline system in the entire US, which can carry even 3 million barrels of fuel a day.

Consequences? The East Coast had to do without 45% of fuel for six days. In addition, consumer panic erupted because gas prices jumped the most in over six years.

That is why the IT world has to work together to ensure that our crucial energy supply chains are safe and sound. And help it evolve (or better revolve) to more sustainable ones.

Physical-cyber convergence

Large physical installations are monitored and optimized through software in the energy industry. This convergence places additional requirements and challenges for the decision-makers in the business.

Thanks to the adaptation of cloud and machine learning technologies, an energy company can:

• better manage the maintenance - to accurately plan repairs, service works, and power outages,
• save resources and reduce costs - by ensuring optimal operation of the supply chain,
• cushion the effects of sudden events - by managing the inventory.

Already this shows how much there is to manage in the energy sector. So let's dwell on that for a while...

Just how BIG is the physical?

Some power plants and supply chains are so gigantic that any cloud that holds all the processes to manage them has to be gargantuan! That's one of the reasons why the cloud security market in the energy industry is predicted (report here) to register a CAGR (Compound Annual Growth Rate) of 11.2 % over the next five years (2021-2026).

And just to grasp a scale… Hydroelectric power plant The Three Gorges Dam is the largest power plant ever built, with an installed capacity of 22,500 MW. And this is twice as much as Germany's total hydroelectric power.

If we look at it this way, all the processes and systems that manage such a large structure must be designed and maintained with great care.

What makes the energy sector a particularly desirable target?

The more extensive the network of dependencies, the harder it is to take care of it, and therefore - the greater the susceptibility to malicious attacks.

What are the three reasons for the particular concern we should have for the energy industry?

1. Nation-state adversaries and money-hungry cybercriminals may benefit from sabotaging the energy supply chain - for them, it's simply worth it.
2. Installations have a huge potential attack surface - both physical and cyber - making the whole network easy to access.
3. The energy industry relies on many third-party actors in power transmission and sales - by threatening them, the attackers may put the entire supply chain and production on hold.

What is the Order Group approach to ensuring the security of the energy sector businesses?

It is best to start taking care of security from the design phase (or from the beginning of digitization if we deal with an energy company operating for a long time).

In cooperation with the Norwegian start-up KYOTO, whose idea was to provide efficient solar energy based on CSP technology, we designed the entire system to manage energy production, storage, and sales. On this occasion, we delved into the subject, thanks to which we could ensure the security of the solution from the very beginning.

The energy industry must be immune to social unrest or hostile takeover attempts. Fortunately, by ensuring cybersecurity, you can minimize threats.