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Study on the Evaluation of Risks of Cyber-Incidents and on Costs of Preventing Cyber-Incidents in the Energy Sector Final Report

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Study on the Evaluation of Risks of Cyber-Incidents and on Costs of Preventing Cyber-Incidents in the Energy Sector Final Report Study on the Evaluation of Risks of Cyber-Incidents and on Costs of Preventing Cyber-Incidents in the Energy Sector final report Study on the Evaluation of Risks of Cyber-Incidents and on Costs of Preventing Cyber-Incidents in the Energy Sector Final report By: Lars Fischer, Mathias Uslar (OFFIS), Doug Morrill (Navigant), Michael Döring, Edwin Haesen (Ecofys, a Navigant company) Date: 30 October 2018 EC reference: ENER/B3/2017-465 Ecofys reference: ESMDE17665 Reviewer: Edwin Haesen © Ecofys 2018 by order of: European Commission Legal notice: This Final Report has been prepared by Ecofys under Contract (ENER/B3/2017-465). The information and views set out in this Final Report are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein. Ecofys - A Navigant Company Ecofys Germany GmbH | Albrechtstraße 10 c | 10117 Berlin | T +49 (0)30 29773579-0 | F +49 (0)30 29773579-99 | E [email protected] | I ecofys.com Register Court: Local Court Cologne | Chamber of commerce Cologne HRB 28527 | VAT ID DE 187378615 Managing Director Scott S. Harper, Julie M. Howard, Monica M. Weed Executive Summary The main objective of this study is to provide a consolidated view on main cyber threats and applicable cybersecurity frameworks in the European energy system, a suggested energy-focused risk management approach, and a set of regulatory recommendations with possible cost impact. This analysis is underpinned by a sound risk assessment methodology and application to the specificities of the European energy system to reasonable level, and benefits from inputs from stakeholders. The results provide a basis for policy makers to discuss this complex topic on national level and within international cooperation. It can also support the European Commission’s (EC) strategy building among others on the proposal to call for a network code on cyber security. The study considers various methods of risk management from European and international initiatives and presents approaches to conduct a risk analysis for stakeholders. It strongly integrates earlier guidance and tools from Mandate 4901 which has already proven its value in the context of standardisation. The figure below lists the main tasks of the study, which also correspond to the six main chapters of this report. Background information is provided in a set of annexes and an extensive reference list. Figure 1: Study tasks and chapters of this final report The European energy system is going through a substantial transition. In the past, discussions mainly focused on physical incidents in energy networks and cyber incidents in information technology (IT) systems. Nowadays and in the future, energy systems consist of integrated energy and communication networks. This requires an integrated view on physical and cyber requirements. Current trends in the transition period of the European energy system are the increased cross-border integration of markets and coordination needs for system operators, a proliferation of decentralised energy resources, and application of digitised solutions. In contrast to other industry sectors, the energy system includes assets with long lifetimes, which often were not intended to interact with widespread communication layers. The currently added interconnectivity in the operational technology (OT) domain requires urgent cybersecurity solutions and may expose the system to new threats as it moves from an analogue to a digitized operation mode. The energy system requires also special attention as its vast 1 M/490 is a standardization Mandate by the European Commission to European Standardisation Organisations (CEN, CENELEC, ETSI) to support European Smart Grid deployment. It includes a European framework to describe smart grids. Ecofys - A Navigant Company Ecofys Germany GmbH | Albrechtstraße 10 c | 10117 Berlin | T +49 (0)30 29773579-0 | F +49 (0)30 29773579-99 | E [email protected] | I ecofys.com Register Court: Local Court Cologne | Chamber of commerce Cologne HRB 28527 | VAT ID DE 187378615 Managing Director Scott S. Harper, Julie M. Howard, Monica M. Weed interconnectivity of users and real-time operation needs to avoid critical cascade effects where a single power system outage or cyber-attack may propagate with widespread effects. Cybersecurity solutions need to be deployed on live systems which need to maintain their integrity for operation at all time and to ensure the minimum disturbance possible. These specific requirements cannot be addressed by bringing the energy system offline as it might be possible with other IT applications. Therefore, the European energy system combines unique characteristics of the so-called OT and IT world. Chapter 1 of the final report gives a view on recent policy initiatives from the EC on cybersecurity in general and where relevant to the energy sector in specific. It also outlines the main trends the energy sector is experiencing now, including more widespread market/system operation, decentralisation of resources, and digitization. It highlights what is specific in the energy sector beyond usual IT cybersecurity needs, and why dedicated efforts are relevant in this domain. Energy systems across the globe have experienced cyber-attacks in the past. Examples of existing cases are the often quoted attack on a Ukrainian DSO (2015), the self-inflicted incident in the Austrian TSO system due to a cross- border miscommunication (2013), and the malware targeting industrial control systems at Saudi Arabia energy infrastructure (2017). These cases illustrate how the described trends of increased cross-border operational coordination, real-time system impact and new communication layers added to legacy assets, increase the need for proper cybersecurity strategies implemented by energy organisations. The complexity of the European energy system and the historically developing information and communication systems enables a variety of cyber threats. But contrary to pure physical incidents and common approaches in operational planning by system operators, it must be acknowledged that a complete list of potential cyber threats does not exist. Even more the technical grid development and operational procedures cannot ensure absolute resilience, nor can a system be designed which ensures full protection against all future cyber threats. In comparison to pure information technology (IT) systems, additional complication and increased sense of criticality for energy systems comes from operational technology (OT) vulnerabilities which are becoming more prominent. Chapter 2 of the final report describes examples of (known) cybersecurity incidents in the global energy sector in recent years. A structural framework is presented for threat scenarios. Eleven specific threat scenarios are listed that will feed into the analysis of the next chapters, and which exemplify the priority set of issues the European energy system could face. To address threats in the European energy system various mitigation measures can be applied. Regulators, standardisation bodies and industry sectors have documented best practices to deal with threats imposed to systems interfaces and business processes. This study presents an overview of basic cybersecurity principles and existing risk mitigation frameworks, describes the relation between various frameworks (e.g. ENISA2 and NISTIR76283), its system and regulatory context (which differs e.g. in EU and US), and existing gaps when mapping the catalogues. Presently most EU system operators and authorities are triggered to review and implement cybersecurity strategies 2 ENISA (2012): Appropriate security measures for smart grids, https://www.enisa.europa.eu/publications/appropriate-security-measures-for-smart-grids 3 NIST (2014): Introduction to NISTIR 7628 Guidelines for Smart Grid Cyber Security, https://nvlpubs.nist.gov/nistpubs/ir/2014/NIST.IR.7628r1.pdf Ecofys - A Navigant Company Ecofys Germany GmbH | Albrechtstraße 10 c | 10117 Berlin | T +49 (0)30 29773579-0 | F +49 (0)30 29773579-99 | E [email protected] | I ecofys.com Register Court: Local Court Cologne | Chamber of commerce Cologne HRB 28527 | VAT ID DE 187378615 Managing Director Scott S. Harper, Julie M. Howard, Monica M. Weed as a result of the implementation of the NIS directive4. This study surveyed European network operators to gain understanding on which practices are applied, which cost and other challenges their cybersecurity strategy faces and which threats and need for action they see. Chapter 3 of the final report explores various cybersecurity best practices and how these interrelate. Facts and viewpoints are presented and analysed on how EU system operators cope with energy cybersecurity. Based on the experience with the strong stakeholder interaction we see a clear need for enhanced monitoring of specific information related to cybersecurity in the energy sector, like costs, implemented measures, maturity levels or incidents. For example, this could be done in national monitoring reports of the energy sector. To assess risks, this study provides a blueprint risk management approach for the European energy sector. The methodology builds on international security standards and guidelines. The objective is to provide a framework which applies maturity levels and prioritises mitigation
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