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The myth of a secure power system

This article was first published on the Energy and Carbon Blog:

Concerns about national security are raising their ugly heads again across Europe.

Whether it is the growing threat of ISIS, the recent shootings in Paris or the ongoing dispute with Russia over the Ukraine, security is on everyone’s lips. But it is not just national security but also energy security that is causing a concern as can be clearly seen in the ongoing threats by Russia to cut off gas to the Ukraine and concerns that they may do the same for the rest of Europe.

These events have got me thinking about energy security and more particularly the resilience of our power system. The engineers will tell you that the power system is incredibly robust and will point you in the direction of average down-times to customers across the industrialised world measured in minutes per year.

But I wonder if that is the right question. Is it: what are the risks of a cyber attack? A good question and a valid risk but media concerns of unknown hackers getting into our power stations and and homes and switching off and on our washing machine are overblown. A more important question and bigger risk is: how resilient is our power system to a terrorist attack or an act of sabotage?

Now you could argue that I should not be bringing this theme into the public domain because it could put ideas in peoples heads. But I think we have to, as the European power industry has shown itself consistently incapable of assessing risks and asking “what if” questions. What if there is a shale gas boom in the U.S.? What if the price of solar collapses? What if we have a boom in decentralised power? What if there is a nuclear accident? What if the oil price falls? What if wholesale power prices collapse?
Well the industry did not ask these questions and as a result what we have is a power industry in turmoil. The impact can be clearly seen in continuing announcement by European utilities of restructuring measures, margin pressure and financial write-downs, the most recent being the Swiss utility Alpiq which announced earlier this month impairments worth c.CHF1bn or c.40% of it stock market market capitalisation. And then there is the German utility E.ON’s radical decision to split its business in two and with its core business becoming energy services, grid and renewables and the original core business of generation and trading being spun off to shareholders. Radical ex facto steps for an industry that could not ask “what if”.

So let’s assume the power systems goes down. What would it mean for us. Some months back a power cable used for the trains in Berlin was destroyed in an act of sabotage and the city had to go without its commuter trains on its main train line for three days. But that was only three days and one line and that was discomforting enough. But a week without power in a city like Berlin and all hell would break loose. The transport system would cease to work as the trains and trams remain motionless and we would have chaos on the streets as traffic lights go out. Most of us desk sitting workers would not be able to work. Buying food or clothes would be extremely difficult. Charging your mobile phones would be impossible. There would be no internet. No TV. Ordering systems would go down. Security forces communication networks would collapse and quickly we would fall into anarchy.
But the big question is how likely this would be and how easy? The answer is easier than you think.
Back in 2013 there was an attack on a power substation in San Jose, California.Someone took a high calibre rifle and shot at the station. Functionality was lost on 17 transformers. It could have been much worse: if the whole power substation had been taken out, all of Silicon Valley would have lost power for four weeks – the time it took to recover operations fully. Four weeks is actually remarkably quick. Critical components such as transformers can take three months to two years to be manufactured and shipped, depending on the size and requirements.

It is not just in the U.S. that attacks on critical power infrastructure have happened. In August last year there was an attack on the Belgian nuclear reactor Doel 4, the result of which was that the reactor was closed until the end of December. What is really interesting about the Belgian situation is the level of technical knowledge that the saboteur had. Taking out a turbine from inside the plant is not easy. What’s more, to date no one has been charged with the sabotage, and no-one knows the motive.

The final question is: how easy it is to take out the power system in a big city like Paris, New York, London or Berlin? Much easier you think. And this all begs the question: what needs to be done to protect our power system?

First and foremost, it is worth being open about where the vulnerabilities are (as they are now doing in the United States) in the interests of helping security forces pre-empt attacks. The second thing is we need to invest in the power infrastructure to make it more robust. Lessons can be learned from the internet, which because of its decentralised nature with masses of connection points is hugely robust and resilient and next to impossible to bring down in total. And the good news is that we are taking steps in this direction in power. There is a large amount of decentralised power already in our power systems but we need to increase it.In financial market terms, we call it risk diversification. Don’t put all your eggs in one basket. Spread the risk. We also need to expand the grid and make sure (as with the internet) that there are enough cables to move that power around. Finally, we need to make sure that the system will function with and without centralised controls.

This article was first published on the Energy and Carbon Blog: