Smart Grids Making Green Energy Sector a More Lucrative Target for Hackers
A report out this week from Bloomberg claims that smart grids are making the green energy sector a much more lucrative target for hackers.
The report notes that large-scale connectivity presents an increased risk of “spies or criminals” causing blackouts. This threat will only be elevated with the addition of wind, solar, and other forms of green energy to the smart grid.
And despite the report’s focus on risk potential, it makes clear the urgency at which security needs to be increased. In the past 15 months, hackers “Dragonfly” and “Energetic Bear” have gained some level of access to U.S. and European power networks.
The U.S. Government and Utilities are already taking steps to beef up security. In February, President Obama signed an executive order calling for work to begin on assessing the parts of the grid are at the greatest risk.
Utilities are responding by increasingly budgeting for cyber security. According to the report, roughly a third of the 61 power companies surveyed by Ernst & Young claim to be spending more than $3 million per year on threat prevention.
Europe is also responding similarly. The report cites a prediction that consulting and testing for threats to cyber security is expected to double by 2016, totaling somewhere around 412 million euros—or $564 million.
Utilities may not be responding fast enough, however.
According to Bloomberg, the green energy sector was the top target for hackers in U.S. last year, accounting for 59 percent of the 256 recorded attacks by the U.S. Department of Homeland Security.
Nick Hunn, Chief Technology Officer at WiFore, said that these are new challenges for utilities.
“If you talk to the utilities about what you have to protect against, it’s about transformers shorting out and trees falling on lines,” he explained. “That’s what they’ve been dealing with for the past 100 years.”
Utilities need to respond quickly, though, as the green energy landscape is becoming more vulnerable by the day.
“The amount of renewables being integrated into the grid is challenging reliability because there are more information and computer technology components being introduced in the grid,” Maurice Adriaensen, chairman of a European smart meter advising group and consultant for DNV GL, said, driving the point home. “The amount of cyber vulnerabilities is increasing.”
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.