energycioinsights

Energy Utopia: Building a Powerful Fort Knox

By Energy CIO Insights

It was an uneventful day for residents in the Ivano-Frankivsk Oblast, a region in Western Ukraine, but not for long. What was widely speculated to be an extended power outage in the city, turned out to be an upshot of a series of cyber-attacks at the Prykarpattyaoblenergo electric utility, jolting the routine life of hundreds of thousands of residents, forcing the city to come to a standstill.

In the aftermath of the Ukraine-debacle, U.S. intelligence head, James Clapper in his recent report to Congress had said, “Cyber attacks against the U.S. are increasing in frequencies, scale, sophistication and severity of impact.” America’s most populated and happening metropolitan cities have had their fair share of security attacks in energy and utility installations. The Department of Homeland Security on its part had investigated 79 energy grid attacks in the fiscal year 2014 alone. With many equally alarming incidents being reported, it all boils down to one question. What are we missing in the path to a safe energy environment?

Where is the Gap?

In the wake of depleting oil and gas reserves, quest for energy sustainability has been pushing global energy leaders to unanimously welcome renewable energy sources for mass generation, which now accounts for 28 percent of the world’s electricity produce. Key investors in the energy business are making subsequent changes to their electric and utility business models—like the gradual emergence of cloud infrastructures and BYOD—and regulatory policies to ensure a reliable supply.

However, in the process of upholding the supply-demand balancing act, energy providers are sidelining the security aspect that stems from the development of additional infrastructure. Findings from The Global State of Information Security Survey by PwC (PricewaterhouseCoopers) credit 38.1 percent of security threats rooting from malicious activities to current employees, both inadvertent and deliberate. Similarly, security attacks on components like the Operational Technology (OT) systems and embedded devices account for more than half the total threats.

The growing necessity to keep felons at bay thrusts the baton of responsibility to technology. Sure enough, engineers and technology providers are working alongside energy scientists, innovating newer, better, and stronger means to help energy providers shut their gates to security attacks and manage risks.

Fortifying the Energy Value Chain

The market is abuzz with an array of tools, software, network protocols, and applications that give total visibility into the energy lifecycle, right from production to distribution and consumption. Many state-of-the-art protocols are deployed inside facilities to govern a multitude of commodities, complex instruments, and control systems. SCADA system, the control system that acts as a single-point-of-contact for multiple information systems spread across the entire plant or unit has unyielding access controls to ensure secured backup of business-critical event data. Coordinated incident response management includes tools which can accurately monitor, track and raise flags in the event of a field disaster. As a prelude, video-verified access controls with face-recognition mechanisms tend to have a place in the future to reduce the IT vulnerability in energy units. The distribution chain, which comprises complex grid networks is placed under constant scrutiny, through wireless radio and video surveillance solutions. Further, endpoint security mechanisms like Geo-fencing of boundaries that can detect, activate and deactivate devices as and when it enters/ leaves the network are just around the corner.

Risk Management: Corrective Action

With adequate preventive measures in place, it goes without saying that the energy production units and distribution grids must still rise to confront and effectively manage disasters and high profile incidents. Energy companies are susceptible to a broad spectrum of risks that impact operational safety and financial readiness. Under the risk management umbrella, an organization is required to manage its critical assets, non-compliance issues, EHS (Employee Health and Safety) and demand-supply imbalance in the event of an environmental impact to tide over damage.

Top players in the energy arena are leveraging the power of big data and predictive analytics through risk dashboards to vastly improve the immunity of their organization. Robust and affordable analytics-driven incident management tools, JHA software (Job Hazard Analysis), reporting tools, and audit management are making their rounds in the energy and utility domain to help firms manage and mitigate risks. These analytics tools help energy producers and distributors gain transparency on asset databases and documents—from resources to reserves, wells to plants, and facilities—for auditing purposes, which supplies them with information on consistency metrics, and performance reports. This is important given that assets, which are the primary resources in energy production units, are liable to wear out in time despite regular maintenance and service, taking a toll on safety risks. Planting a whole slew of innovative sensors and microbots across the entire unit can catapult the process and will be useful in generating condition-based reports. Subsequent measures and tactical decisions can then be taken to predict potential equipment failures, and provide a fix or replace them if they are not aligned with expected efficiency and profit levels.

Energy: The Backbone of Economy

Surrounding the debate about the financial aspect of risk management strategies, energy managers are now observing the need to understand global energy markets, which is a high competitive and volatile marketplace. It is exceedingly imperative to forecast market trends and devise plans that will help the organization stay afloat and unscathed during times of unseen market circumstances. Given the nature of crude oil and natural gas and its role as a traded commodity that determines the global economy every day, organizations deploy valuation diagnostics tools like Value-at- Risk (VaR), intraday valuation, and foreign currency valuation. The VaR tool with built-in algorithms can compute commodity risk value, making predictions over the market value fluctuations over a given horizon with a certain confidence level. These tools are a byproduct of engineering brilliance and they leave no margin for error, assisting the business leaders of energy companies to make budgeting decisions accurately.

Global leaders in energy are investing millions of dollars in technology that enhances energy production and distribution, and boosts operational supremacy, at the same time building an unyielding fence around their organizations, and securing a place for its reputed presence in the future. We live in a time, where energy is the bloodline that powers the economy worldwide and disruptions can have major setbacks on the growth of a nation. In order to thwart away potential high-profile incidents from happening—a few that make the headlines and the rest that are never revealed—energy managers of industry followers must consider the path of pioneers in the field, the only course of logical progression to make the most of technology by securing the future of energy and making it tamper-proof.

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