G NER Y SE E CU O R T I A T Y N

C E E C N T N R E E LL OF EXCE

Energy Security: Operational Highlights

No 13 2020

ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 1 Content

4 Editorial

Disruptive and enabling technologies in the energy sector 5 BY MS MARJU KÕRTS

The strategic importance of rare earth minerals for NATO, EU and the United States and its implications for the energy and defense sectors 24 BY MS MARJU KÕRTS

Securing the industrial internet of things: Policy considerations for reducing cyber risks to industrial control and safety systems 41 BY MR ÓSCAR RECACHA ORTEGA, MR VYTAUTAS BUTRIMAS

Pulling the Thread for U.S. Air Force Mission Assurance 53 BY MR MARK A.CORRELL

NATO’s Experience in the Field of Energy Efficiency for Armed Forces 55 BY MR ANDREA MANFREDINI This is a product of the NATO Energy Security Centre of Excellence (NATO ENSEC COE). It is produced for NATO, NATO member countries, NATO partners, related private and public insti- tutions and related individuals. It does not represent the opinions or policies of NATO or NATO ENSEC COE. The views presented in the articles are those of the authors alone. Interview with Commander Andrea Manfredini on his article: “The Paradox of NATO’s Inefficiency in the Field of Energy © All rights reserved by the NATO ENSEC COE. Articles may not be copied, reproduced, dis- tributed or publicly displayed without reference to the NATO ENSEC COE and the respective Efficiency for the Armed Forces” publication. 60 BY MR ANDREA MANFREDINI

2 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 3 novation in the energy sector play a key role in energy transition. The technologies impacting Disruptive and Editorial the new electricity system will be both – ena- bling and disruptive. Enabling technologies By COL Romualdas Petkevičius (LTU-AF) facilitate the integration of renewable energy Director of the NATO ENSEC COE generation technologies. Disruptive technolo- enabling technologies hen respond- gies by contrast have all of the process im- ing to security provement possibility of enabling technolo- threats and gies, but disrupt current commercial models. in the energy sector The factor determining the degree to which crises, NATO by Ms Marju Kõrts W renewable energy may become disruptive is Allies and partner coun- tries must be able to de- the development of efficient and cost-compet- hree primary drivers are transform- This article will give an overview of the new ploy their forces rapidly itive energy storage devices. ing the global energy system: decen- emerging technologies in the power sector and effectively. Techno- tralization, digitalization, and decar- including energy storage and electro-mobil- logical innovation has al- The NATO Energy Security Center of Excellence bonisation. Together, these factors ity as the main drivers of decarbonisation of ways been critical for achieving military suc- has also focused on “Smart Energy”, as to en- T are shifting the world’s power mix toward the energy sector that pave the way towards cess. Matched with creative strategic thinking, hance our armed forces’ energy efficiency that smaller, cleaner, and more intelligent tech- low carbon economy. It will also touch upon advanced technology often made a difference. means saving fuel – and this means spend- nologies. Digitalization is a key amplifier of some trends in research and development Military energy needs are changing as well ing less money on fuel. More energy-efficient the power sector transformation, enabling related to energy storage. as growing. More significant, the dramatic in- equipment also means having to transport the management of large amounts of data less fuel over long and often dangerous supply crease in electrical systems onboard military and optimizing increasingly complex sys- 1. THE NEW ENERGY LANDSCAPE AND THE platforms is driving electrification of the battle- routes. This edition of Operational Highlights tems. The growing importance of digitali- CONCEPT OF DISRUPTIVE TECHNOLOGIES field. That and the need to reduce the logistic will underline the role of new energy technolo- zation in the power sector is also a conse- gies, especially emerging technologies (energy footprint are creating requirements for distrib- quence of advances in two other innovation Providing energy access while reducing emis- storage) and energy efficiency in the military. uted and portable power generation, smart en- trends: decentralization and electrification. sions, major economies globally have commit- At the same time it will highlight that new ergy networks, improved energy storage, and Decentralization is led by the increased de- ted to decarbonisation as a way of combating technologies bring along new vulnerabilities wireless power transmission. ployment of small power generators, mainly climate change effectively. To achieve this, such as cyber security. This last point has in- rooftop solar photovoltaic (PV), connected to future power markets will need to focus on creasingly become a major concern in energy The share of renewables in the global energy the distribution grid. Electrification of trans- implementing sustainable, low-carbon energy mix should be more than double by 2030 to security as we have witnessed the recent use port and buildings (heating and cooling) in- solutions and technologies. Currently energy advance the global energy transition. Falling of cyber weapons against electric distribution volves large quantities of new loads, such as is experiencing what some have termed a technology costs continue to strengthen the grids and petrochemical plants. Energy securi- electric vehicles, heat pumps and electric “Fourth industrial revolution”, following those case of renewable energy. Solar panel costs ty is no longer just about security of supply and boilers. Technology is helping improve utili- of steam, electrification and automation. have fallen by almost 90 per cent over the last price. The technologies used to drill and run ties’ operational efficiencies through digi- Technology is powering renewable energy 10 years and onshore wind turbine prices have fuel down a pipeline, control propulsion sys- talization and the Internet of Things (IoT). On rise. The traditional model of large, top-down fallen by half in that period. The global energy tems, generate and distribute electricity can the other hand, networks are vulnerable to and centrally distributed energy production is market slowly but surely moves towards a re- be accidentally and/or maliciously disrupted being replaced by modular, consumer driven newable-centered paradigm. electronically. In other words technology must cyberattacks that many believe will become now be seen as both an enabler and as a target. more prevalent and sophisticated. and evenly distributed power generation. More clean energy means more solar panels, wind turbines, electric vehicles and large-scale This issue of Operational Highlights provides a timely overview of the emerging technologies batteries. At the same time it means more de- by Ms Marju Kõrts mand for the materials that make those tech- in the power sector including energy storage and electro-mobility, focusing on exciting new nologies possible. In a sense we have now Ms Marju Kõrts is an Estonian career diplomat who has hold several posi- entered the “Rare Metal Age” as science and trends in energy storage research and develop- tions at the Estonian Ministry of Foreign Affairs. She graduated with her Mas- human ingenuity have allowed us unlocking of ment. We also have a closer look at the stra- ters degree in political science at Tartu University in Estonia. With the current various magnetic, luminescent, heat resistant tegic importance of rare earth minerals that function as the Estonian Subject Matter Expert at the Research and Lessons and conductive properties of a diversity of met- are a critical for energy security. As well we Learned Division of the NATO Energy Security Center of Excellence in Vilnius als such as lithium, cobalt, indium, gallium, touch upon how we can reduce the likelihood she focusses on the new energy technologies. At present she is conducting a neodymium and dysprosium that are now de- of cyberattacks against control systems used research study “The use of LNG as an alternative propellant in the naval field” that will be launched this spring by the NATO Energy Security Center of Excel- livering technological innovation. to monitor and manage our critical energy in- lence. E-mail:[email protected] frastructure. Lastly, we provide fresh insights Emerging or disruptive technologies and in- on NATO initiatives in military energy efficiency.

4 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 5 Power generation technology is only one able renewable energy requires flexibility in sector we need to integrate more renewables ness models could have disruptive conse- part of the energy transformation story. Sta- the energy system which comes from 4 main to the grid and in this regards sector coupling quences regardless of technological change. tionary storage technology is improving and sources: flexible power generation, flexible is the key to a greater penetration of renewa- The discussion around energy and disruption costs are falling steeply. New energy sources demand, energy storage, and smart inter- bles in the energy sector, but it still has hur- has often focused on the work of Tony Seba6 emerge, leading to a structural and perma- connected grid infrastructure. As the need dles to overcome, both technically and on the and discussions of the clean disruption. Se- nent change in supply, demand and energy for flexibility increases, grid operators need market scale. ba’s work focuses on technology-based dis- mix. For example, hydrogen could play a to utilize each of the categories through ruptions: the convergence of technologies, significant role in low-carbon future: coun- resources such as residential demand re- Emerging or disruptive technologies and in- business model and product innovations terbalancing electricity as a zero-carbon sponse, long-term storage technologies or novation in the energy sector play a key role that are disrupting the world’s major indus- energy carrier that can be easily stored and synthetic fuels for zero-carbon dispatchable in energy transition. Much of the technologi- tries including energy, transportation and transported, enabling a more secure energy power generation. Decarbonisation is only cal innovation in the energy sector has been infrastructure. It means that traditional busi- system with reduced fossil fuel dependence. slowly taking hold beyond the power sector. of an incremental nature5. Incremental inno- ness models are challenged because of the While electricity is proving comparatively Heating, cooling and transport are other are- vations that accumulate over time can have zero marginal cost aspect of solar and wind. easy to decarbonize thanks to the dramatic as in which fossil fuels are to be gradually re- large impacts. But what is striking about the There are no fuel costs as there is no need cost reductions and uptake of renewables, placed with renewables. This can be achieved energy sector since the turn of the centuries to pay additional costs to produce more en- the other sectors (e.g transport, heat) must either by using renewables directly - for in- is the transformative nature of the changes ergy like you do with coal, gas and uranium not be forgotten. stance, by using solar thermal collectors to that are taking place. An example of renewa- powered energy production. So renewables heat a house, or by using renewable-gener- bles innovation can be found in floating solar substantially reduce the wholesale costs of Around the world the pace of developing and ated electricity in other sectors. This transfer – known as “floatvoltaics” – in which photo- energy. The business model of 20th century introducing better, more efficient renewable of clean electricity into other sectors, where voltaic (PV) panels are mounted on the sur- was based around building large power sta- energy technologies is accelerating. Renewa- it is used to reduce the amount of fossil ener- face of water bodies. With solar energy gen- tions producing a constant supply of energy bles are becoming the go-to option for many gy required, is referred to as sector coupling. eration requiring large areas for PV panels to in centralized systems. It was based, for the countries in their transition towards secure, lay, floating solar systems present a solution most part, around an active supply and pas- cost effective and environmentally sustainable As a result of energy transition, energy carri- that can address land acquisition issues ef- sive demand. This arguably all being dis- energy supply. According to the Renewables ers will become increasingly interconnected. fectively, which is particularly important in rupted because of the decentralized process 2019 Global Status Report – the Renewable Cross sector coupling involves the integrated population-dense regions. Floatvoltaics on a with smaller units around the country and Energy Policy Network’s annual look at the use of different energy infrastructures and hydro-electric dam reservoir offers easy ac- intermittency factors. Renewables arguably market – recently revealed that, globally re- vectors, in particular electricity, heat and cess to power evacuation to the grid and a enable new players to come to the fore, for newable energy is outgaining fossil fuel and gas, either on the supply side, e.g. through hydro-floating solar hybrid solution for im- example prosumers selling electricity at the nuclear capacity combined and now repre- conversion of (surplus) electricity to hydro- proved grid performance. Electric vehicles household level back into the grid. For ex- sents one-third of the world’s installed capac- gen, or at the demand side, e.g. by using re- (EVs) and electrified fleets – everything from ample, the Brooklyn Microgrid, a P2P energy ity1. Once thought to be difficult to integrate sidual heat from power generation or indus- buses to garbage trucks – are growing in trading7 microgrid project in Brooklyn, New into the grid, renewables are now serving to trial processed for district heating. On one numbers, pressuring power providers to ac- York enables to localize the energy industry strengthen grid reliability and resilience. hand, sector coupling calls for bringing more commodate charging demand. Technology by combining blockchain and microgrid tech- consumers to the grid to better utilize the with disruptive effects on markets and busi- nology. In this sense renewable energy and Renewable energy from solar, wind and bat- already plentiful generation. Looking at the ness models are gaining ground rapidly. energy storage technologies is that they are tery storage is grabbing a broader footprint same system from another perspective, the disruptive to the traditional model. by the day, along with microgrids2 and other heating sector and the automotive sector, for The concept of disruptive technologies was distributed energy sources (DER), enabling example, are mostly using energy resources. first introduced and defined by the American The technologies impacting the new electric- governments and the utilities to integrate Outside electrification or using synthetic fu- scholar Clayton Christensen in the 1990s, but ity system of the future come in two technolo- those energy sources onto the grid. In this els such as hydrogen produced with renewa- it was later updated and called disruptive in- gies - enabling and disruptive technologies. transformation process, the role of electricity ble electricity, there are not many other alter- novation with the recognition that new busi- The distinction between them is curiously will become more prominent and more cen- natives to decarbonize these sectors3. Energy 4 tral in the energy system. retrofit of the building sector and other ener- 3 Van Nuffel, L. Study: “Sector coupling: how can it be enhanced in the EU to foster grid stability and decarbonisation”, Brussels, No- gy efficiency measures may reduce demand, vember 2018. 4 Energy retrofit is an energy conservation measure in an existing building also leading to an overall improvement in the building per- The IEA report “World Energy Outlook 2018” but will not replace the underlying energy formance. highlights that increased penetration of vari- source. In order to decarbonize the energy 5 Technical innovations can be classified according to whether they are “incremental”, “radical” or “disruptive”. A disruptive innovation is something that creates a new market and value network displacing existing markets and business models, a game-changer. 1 2019 Strategic Directions: Electric Report. Repowering the Power Industry. 6 Tony Seba “Clean Disruption of Energy and Transportation – How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utili- 2 A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries acting as ties and Conventional Cars Obsolete by 2030”, 2014. a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid enabling it to operate with 7 Peer-to Peer (P2P) energy trading is the trading of energy from one person or entity (producer) to another person or entity (consumer), the grid or island-mode on its own. without the use of intermediary.

6 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 7 slim. Enabling technologies facilitate the has the potential to eliminate the need for of large, top-down and centrally distributed puter technology to create two-way commu- integration of variable renewable energy gasoline in cars, and can turn the relation- energy production is being replaced by mod- nication between all nodes of the electricity generation technologies. Such technologies ship between citizens and energy. ular, consumer driven and evenly distributed network – supply, transmission, distribution, include, among others, storage batteries, power generation. and consumption – creating a more efficient, technologies that enable the electrification of For example, carmaker Tesla is having lot reliable, and resilient system. Automated other sectors with renewable electricity, digi- of success with the sale of its revolutionary The advantages of energy storage are mani- technology relays information from sensors tal and ICT developments, and smart grid so- electric vehicles (EVs), and has a plan to sell fold. Firstly, battery storage can be effectively and smart meters employed at home and of- lutions. Smart grid is an electricity grid which 500,000 EVs by the year 2020. With the roll- used to tackle peak demand as it varies not fices, allowing the utility to adjust and control includes a variety of operation and energy out of a cheaper model, the company expects only on a daily basis, but also seasonally and power flows in real time in each individual measures, including smart meters, smart to reach more people, but a cheaper model annually. Meeting the peak demand is costly, device, or in millions of devices, from a cen- appliances, renewable energy resources, and is highly dependent on the price of the bat- as utilities have to either invest in additional tral location. energy efficient resource. Electronical power tery. This currently costs approximately one capacity by building new power plants, which conditioning and control of the production third of the price of the entire car, and will are not always optimally run, or buy power This automated system allows utilities to and distribution of electricity are important not drop until it is produced on a much larger from independent power producers during gauge shifts in demand in real time; more aspects of the smart grid. All of these devel- scale. For this reason, Tesla has worked out peak hours at higher prices compared to rapidly respond to power outages; and inte- opments bring new opportunities for inte- a grand plan with Panasonic to build a “Giga- non-peak hours. On the other hand, grid- grate intermittent sources of electricity like, grating higher shares of renewables, as they factory” in Nevada, for just such large scale connected battery storage can effectively solar, wind, and eventually electric vehicles enable new ways of operating and optimizing battery production. The disruptive part of the inject the required power into the grid at the into the grid9. The backbone of the future power systems. Disruptive technologies by idea lies in the longer term potential to move right time to meet the demand. Power from smart grid is artificial intelligence (AI), this contrast are such that have all of the process away from the current petrol engine. Mean- battery storage will not only save the utilities technology will continuously collect and syn- improvement possibility of enabling tech- while, other battery manufacturers are mak- from the above-mentioned challenges but thesize overwhelming amounts of data from nologies, but do so in a way which disrupts ing similar plans, and the first mega-invest- also help in maintaining grid balance. millions of smart sensors to make timely current commercial models. The disruption ments are expected to be made soon. decisions on how to best allocate energy comes from economics, it has to do with con- 2. THE ENABLING TECHNOLOGIES: SMART resources. Additionally, the advances made sumption of energy. For example, the objec- Beside car batteries, Tesla also wants to build GRID AND ENERGY STORAGE from “deep learning algorithms”, a system tive of the Virtual Power Plant8 (VPP) is to larger batteries for households who want to where machines learn on their own from relieve the load on the grid by smartly distrib- store their solar-panel generated energy. En- Many factors will impact the pace and scope spotting patterns and anomalies in large data uting the power generated by the individual ergy which then can be used to recharge their of the expansion of the renewable sources of sets, will revolutionize both the demand and units during periods of peak load. The biggest EV, and can be further used in the household. energy. These include federal and tax cred- supply side of the energy economy10. VPP was established in Adelaide Australia in SolarCity is the company that will provide its in the United States of America, feed-in 2016 and it boosts grid stability, reduce power both solar panels and storage technology, tariffs in the European Union, growing pres- As a result, the large regional grids will be price volatility and support the expansion of and is led by Tesla director Musk. sures of climate change, and a projected low- replaced by specialized microgrids that man- renewable energy. price environment of natural gas. But look- age local energy needs with finer resolution. The example of Tesla shows that energy ing over the coming decades to 2035, the key These can be paired with new battery tech- Innovation in energy storage represents the storage has begun to play a wider role in obstacle and/or enabler will be the degree nologies that allow power to continually flow largest and most near-term opportunity to energy markets, moving from limited and to which the grid system is modernized and to and between local communities even when accelerate renewable energy deployments niche uses, such as grid balancing to play a digitized into a smart grid; in the longer term, severe weather or other outages afflict the and bring us closer to replacing fossil fuels as larger role such as replacing conventional advancement will depend on breakthroughs broader power system. the primary source to meet the world’s con- power generators for reliability, providing in cost-competitive energy storage. To effec- tinual growth in energy demand. Energy stor- uninterrupted quality power, and supporting tively integrate growing amount of intermit- For example, the Brooklyn Microgrid11, a P2P age systems primarily offer value to power renewables integration. It is projected that tent energy sources like solar and wind into energy trading microgrid project in Brooklyn, systems by absorbing power during periods storage will represent a core component of the grid, smart grids are key. New York developed by LO3 enables to local- with low demand and injecting power during all new energy technologies moving into the ize the energy industry by combining block- periods with high demand. This technology is future, as both utility-scale and domestic en- A “smart grid” is a digitized infrastructure chain and microgrid technology. Peer-to Peer increasingly seen as disruptive technology as ergy storage solutions become more price of the electricity system, transforming elec- (P2P) energy trading is the trading of energy it is able to break through existing business competitive, eroding the advantages of tradi- tricity systems much the same way that the from one person or entity (producer) to an- models and create a whole new industry. It tional energy sources. The traditional model smartphone transformed telecommunica- other person or entity (consumer), without tions from the use of landlines. It uses com- the use of intermediary. On one hand, this

8 Virtual Power Plant (VPP) is a network of decentralized, medium-scale power generating units, such as wind farms, solar parks, and Combined Heat and Power (CHP) units, as well as flexible power consumers and storage systems. The interconnected units are dis- 9 Manning, R. “Renewable Energy’s Coming of Age: A Disruptive Technology?” Atlantic Council, Issue Brief, December 2015. patched through the central control room of the VPP, but nonetheless remain independent in their operation. 10 Wolfe, F. “How Artificial Intelligence Will Revolutionize the Energy Industry”. Harvard University newsletter on Artificial Intelligence, 2017.

8 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 9 project will make Brooklyn more sustainable Based on their energy storage capacity, energy will dominate installations with 273 GWh, or A range of energy storage technologies exist, by incentivizing local home-owners and busi- storage systems can be categorized as short- some 43 percent of the total capacity, while each with different trade-offs for particular nesses to install rooftop solar. On the other term and long-term energy storages. Short- Europe and the U.S. will account for about 31 applications. However, pumped hydropower is hand, it will make Brooklyn more energy re- term storage systems including the super- percent of cumulative capacity. Lithium-ion still dominant form of installed power system silient as the microgrid can operate autono- capacitator energy storage, flywheel energy batteries will remain the predominant stor- energy storage worldwide. Although the cost mously from the traditional grid, especially in storage and superconducting magnetic ener- age technology over the next decade, spurred of lithium-ion batteries has decreased signifi- the event of a weather incident such as Hur- gy storage are explained in detail in part 2.1.1 by the anticipated growth of the EV market. cantly in recent years, their levelized cost of ricane Sandy. The need for greater flexibility of this article. The long-term storage systems The top 10 battery manufacturers alone have energy remains higher than the levelized cost and mobility in the marketplace has opened could be subdivided into pumped hydroelectric planned some 510 GWh of annual global of energy of pumped hydropower and other the door to technologies such as blockchain energy storage (PHS), compressed air energy factory capacity by 2030, with 45 percent of gravity energy technologies. Also, gravity en- that helps provide part of the solution, pro- storage (CAES), battery energy storage, and global lithium-ion manufacturing capacity lo- ergy storage technologies, including pumped viding that real-time information in terms hydrogen energy storage. cated in China, Europe and South Korea. hydropower, have two key advantages over of power generation. The use of data has electrochemical batteries (e.g. lithium-ion, increased in tandem with the need for more The entire energy storage market has sig- Energy storage technologies can be used in lead-acid); (i) their capacity does not degrade technical solutions and the need for an ever- nificantly increased its presence in 2019. In different sectors such as defence, heat and each cycle and (ii) their power capacity is de- smarter grid. recent months, the news from the storage in- transport. The U.S example shows that battery coupled from their energy capacity16. dustry has ramped up significantly. We have storage technology can be successfully used Perhaps the factor determining the degree to seen recent announcements of large battery in the military. The U.S largest stand-alone Electricity storage technologies can be clas- which renewable energy accelerates and be- storage projects, some as big as NextEra’s battery energy storage system is developed at sified based on the underlying physical prin- comes disruptive is the development of more Manatee Solar/Storage undertaking involving Fort Carson army base in Colorado15. Battery ciples of the energy transformation process. efficient and cost-competitive energy stor- 409 MW and 900 megawatt-hours (MWh) and a storage can provide immediate, flexible pow- Accordingly, four major categories are distin- age. Coupled with falling technology costs, 495 MW energy storage project from intersect er to military installations while reducing the guished: (1) mechanical storage (including particularly for lithium-ion batteries, energy Power that may be developed in Texas, U.S13. carbon footprint, fuel demands and recurring pumped hydro storage (PHS), compressed storage is expected to play a key part in the costs of existing back-up generators. Stor- air energy storage (CAES), and flywheels); (2) global transition toward a more sustainable North-America, the Asia Pacific and West- age technology has advanced to the point that electrochemical storage (including conven- and reliable power grid. The primary driv- ern Europe were the leading regions for de- large-scale installations can provide resilient tional batteries), advanced high-temperature ers for storage are changing rate structure, ployed energy storage power capacity during power without straining defence budgets. batteries and flow batteries); (3) electro- electric vehicle charging integration, solar PV the second quarter of 201914, with lithium-ion magnetic storage (including superconduct- integration, resiliency/back-up power, and to batteries remaining the fastest growing stor- In the heat sector, high temperature heat stor- ing magnetic energy storage (SMES), su- some degree business model innovation. age technology. Triggered by electric vehi- age can be used to increase flexibility of ther- perconductors and supercapacitators), and cles’ development, battery technologies are mal power plants. Most prominently they are (4) thermal storage (including molten-salt A 2017 review of “deep carbonization” sce- progressing quickly. This progress is also considered as flexibility option for solar power technology, heat storage in tanks or rock cav- narios for the U.S. by power sector research- benefiting the large stationary batteries used plants in order to be able to feed power into erns, cryogenic energy storage and ice-based ers found that scenarios with a high penetra- for grids or small individual batteries used the grid also during times without sunshine. technology). tion of renewables require either a backup for self-consumption. system of dispatchable resources or long- The transport sector is likely to deploy a Energy storage systems work by capturing duration, seasonal storage technologies12. The majority of investment today is in battery large-base of energy-storage systems in the the available form of required energy re- The only long-duration, seasonal storage storage, and part of that is lithium-ion energy future. With the anticipated increase in the source and store it for future use. In the past, technology currently proven viable at scale source of choice for new projects because of adoption of electric vehicles (EVs), the trend electricity storage was mainly employed in is pumped hydro storage. Areas of the world the falling prices. According to the recently is projected to increase demand for EV charg- the form of large-scale, bulk, centralized such as Norway, Wales, Japan and the U.S. published report from Rethink, global en- ing infrastructure on a global scale. This will units providing fast response (batteries, fly- have used elevated geographic features for ergy storage will grow from 6 GWh installed likely lead to significant growth in the elec- wheels). Today, there is an emerging interest reservoirs, using electrically powered pumps today to 635 GWh by 2030. It can be predict- trochemical energy storage systems market. in small-scale, decentralized storage and in- to fill them. ed that the Asia Pacific region, led by China, deed, in the future power system electricity 2.1 TYPES OF TECHNOLOGIES WITH THEIR storage could fulfill a variety of functions and 11 A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries acting SUB-TYPES UTILIZED FOR ENERGY provide benefits to various stakeholders17. as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid enabling it to operate with the grid or island-mode on its own. STORAGE SYSTEMS It might be connected directly to the trans- 12 Ladislaw, S., Naimoli, S. “Transforming the U.S. and EU Electric Power Sectors: Workshop Report and Recommendations for Trans- atlantic Cooperation”. Center for Strategic International Studies, Washington D.C (August 2019). 16 Morstyn, T., Chilcott, M., McCulloch, M.D. “Gravity Energy Storage with Suspended Weights for Abandoned Mine Shafts”, Department 13 Peter Kelly-Detwiler. “Energy Vault Receives 110 million USD From SoftBank for Gravity-Assisted Power Storage”. Forbes, August 14, 2019. of Engineering Science, University of Oxford. Applied Energy, April 2019. 17 14 According to the data of the second report from the UK-based market research company “Rethink Technology Research”. It refers to ancillary services that are all services required by the transmission or distribution system operator to enable them to 15 Smart Energy International newsletter. “U.S Army develops largest battery energy storage system”, 23 August 2018. maintain the integrity and stability of the transmission or distribution system as well as power quality. Ancillary services include fre- quency control, voltage control, spinning reserve, standing reserve.

10 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 11 mission or distribution grids, to renewable PUMPED STORAGE TECHNOLOGY FLYWHEEL STORAGE TECHNOLOGIES of tons of mass uphill on railroad shuttles, generators, or to consumers. Also electric effectively storing thousands of megawatt- Pumped-storage hydroelectricity facilities Flywheel energy storage systems use electric vehicles technically can provide the different hours of potential energy to power a medium- (PHS) use energy input which is stored in energy input which is stored in the form of ki- storage functionalities. Besides electric en- sized city for several hours. Gravity is also the the form of kinetic energy. Water is pumped netic energy. Kinetic energy can be described ergy storage in the narrow sense, also ther- force underpinning pumped hydro, the most to a higher elevation for storage during low- as “energy of motion”, in this case the motion mal storage devices might see interesting widespread and cost-effective form of en- cost energy periods and high renewable en- of a spinning mass, called a rotor, is a rotating applications at consumer level or in combi- ergy storage in the world. At the same time ergy generation periods. The relatively low mechanical device that is used to store rota- nation with large, remote concentrated solar pumped hydro development is slow and cost- energy density of pumped storage systems tional energy that can be called up instan- power facilities. Thus, electricity storage can ly, requiring sites with specific topographical requires either a very large body of water or taneously. This rotor is made spin under an be located closer to generation or closer to characteristics and often involving significant large variation in height. Recent innovations enclosure with much less friction. In case of load; it could be operated in a more central- permitting hurdles. The proponents of newer have allowed PHS facilities to have adjustable power requirements, stored kinetic energy in ized or in a more decentralized manner. gravity storage options claim that installation speeds, in order to be more responsive to the the flywheel is converted into electrical en- and deployment of their technology is quick- needs of the energy grid. Pumped hydro stor- ergy. Flywheel energy storage has major ad- The following sections analyse the effective- er, easier and cheaper. age is the leading technology accounting for vantages such as fast charge capability, long ness, current status, and future scope of 97% of world’s storage capacity, with a rated lifecycle, and low maintenance requirements. some of the major energy-storage technolo- In 2018, Swiss/Southern Californian startup power of 159 GW, as it is cheaper and more Currently, flywheels for energy storage are gies mentioned in Figure 1. Energy Vault announced the commercial technologically mature than any other stor- utilized for applications in sectors such as availability of its energy storage solution that age methods available18. In 2018, pumped power, aerospace, and telecommunications. is based on the principles that underpin tra- ENERGY STORAGE hydro storage was the most widely deployed ditional gravity-based pumped hydro plants. storage technology on a large scale, account- R&D activities are underway to improve the Its new technology combines fundamentals ing for over 85% of the total energy-storage performance of flywheel energy-storage of potential and kinetic energy with a cloud- systems market. technology. For instance, research regarding based software platform to operate a newly development for new materials possessing developed six-arm crane. The crane opera- China has the largest rated power capacity of low density and high strength, which will pro- tion is automated and moves massive con- operational PHS plants with 32 GW, followed vide higher energy densities. crete bricks that provide the basis for the by Japan and the U.S., with 28.3 GW and 22.6 storage and discharge of electricity. The com- GW respectively. While pumped hydro sys- GRAVITY STORAGE TECHNOLOGIES pany Energy Vault also announced a technol- tems currently dominate total installed pow- ogy and commercial partnership with CEMEX er storage capacity, the cost of stationary bat- Most gravity storage concepts are based on SECONDS MINUTES HOURS MINUTES SECONDS the idea of using spare electricity to lift a Research Group AG (Mexican cement and 1kW 10kW 100kW 1MW 10MW 100MW 1GW teries such as lithium-ion and flow batteries building materials manufacturer) that will could fall up to 66% by 2030, in turn stimulat- heavy block, so the energy can be recovered focus on material applications which include ing 17-fold growth in storage capacity. when needed by letting the weight drop down ELECTROCHEMICAL STORAGE THERMAL STORAGE the optimization of various concrete based again. For example, Advanced Rail Energy ELECTROMAGNETIC STORAGE MECHANICAL STORAGE composite materials that will support Energy Pumped hydropower is limited by the number Storage (ARES) has developed a gravity based technology that will permit the global electric Vault’s system deployments globally. This co- Figure 1: Types of energy storage technologies of suitable locations since it requires large grid to move effectively, reliably, and cleanly operation contributes to the development of Source: De Oude Bibliotheek Academy (2017) areas of land for an upper and lower reser- a new material that would be lightweight, du- voir, which must be separated in height. This assimilate renewable energy and provide 20. rable (lasting 30 or more years), inexpensive has created interest in developing new forms significant stability to the grid ARES has 2.1.1 MECHANICAL ENERGY STORAGE and capable of incorporating multiple waste of gravity energy storage, to capture the ben- combined proven electric railroad technology materials, such as used debris concrete, coal Mechanical energy storage systems take ad- efits of pumped hydropower without its land- with modern electronics in an internationally ash and industrial slag. vantage of kinetic or gravitational forces to use requirements. A particular technology patented system that has very low technology store inputted energy. While the physics of patented by the U.S. Company Gravity Pow- risk, growing markets, limited competition, Energy Vault’s technology was inspired by mechanical systems are often simple (e.g. er is based on a large underground piston, and expected high returns to investors. ARES pumped hydro plants that rely on the power spin a flywheel or lift weights up a hill), the which is lifted hydraulically to store energy, will use surplus wind/solar or other low- of gravity and the movement of water to store technologies that enable the efficient and ef- and then released to push water through a cost energy from the grid to move hundreds fective use of these forces are particularly turbine. The cost of this system is primarily 18 Whiteman, A; Esparrago, J.; Rinke, T.; Elsayed, S.;Arkhipova, I.; Strinati, C.; Alay,L.F. Renewable Energy Statistics 2017; International advanced. High-tech materials, cutting-edge made up of excavations (approximately 57% Renewable Energy Agency (IRENA): Masdar City, UAE, 2017. computer control systems, and innovative of the total cost) and a reinforced concrete 19 Morstyn, T., Chilcott, M., McCulloch, M.D. “Gravity Energy Storage with Suspended Weights for Abandoned Mine Shafts”, Department design makes these systems feasible in real- container to resist the load pressure (approx- of Engineering Science, University of Oxford. Applied Energy, April 2019. 20 Cava, F., Kelly, J., Peitzke, W, Brown, M., Sullivan, S. “Advanced Rail Energy Storage: Green Energy Storage for Green Energy”, Storing 19 world applications. imately 25% of the total cost) . Energy with Special Reference to Renewable Energy Sources, 2016, pages 69-86.

12 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 13 and discharge electricity. The company’s so- ronments. It is the most widely used method Nebraska-based Tenaska Power Services, types of conventional storage batteries used lution is based on the same fundamentals for thermal energy storage as compared to the leading provider of energy management extensively today: the lead-acid batteries, but replaces the water with concrete bricks. its available counterparts. It works by storing services and demand-side customers in the the nickel-based batteries and the lithium- The large bricks are combined with Energy heat energy, which can be transformed into U.S to help develop up to 4 GWh of cryogenic based batteries. Lead-acid batteries are the Vault’s system design and algorithm based superheated steam. To run steam turbines in energy storage plants in the U.S. over a two- oldest type of rechargeable batteries and are software, which calibrates the energy storage order to generate electricity. This technology year period22. based on chemical reactions involving lead tower and electricity charge/discharge while is extensively utilized in solar thermal pow- dioxide (which forms the cathode electrode), accounting for a variety of factors including er plants in which molten salts are used as Thermal storage can be as basic as stor- lead (which forms the anode electrode), and power supply and demand volatility, weather a heat transfer fluid and to store the excess ing ice for later use in air conditioning. In- sulphuric acid which acts as the electrolyte. and wind. As a result, the company said that amount of heat energy. Molten-salt thermal stead of generating electricity, making ice Lead-acid batteries have high energy effi- it can deliver all the benefits of a pumped storage helps solar thermal power plants to can shift power demand, especially to peak ciencies (between 85 and 90%), are easy to in- hydro system, but at a much lower price, function as a base load power plant. A well- solar generation hours during the summer stall and require relatively low level of main- higher round trip efficiency and without the known molten salt storage is typically asso- months, with the ice later used for air con- tenance. In addition, the self-discharge rates requirement for specific land topography and ciated with the Solana concentrating solar ditioning. California-based Ice Energy is cur- for this type of batteries are very low, around negative environmental or wildlife impacts. power plan in Arizona, USA. rently installing 1,200 ice-energy systems 2 percent of rated capacity per months (at 25 Energy Vault is partnering with India’s energy under a contract with Southern California degrees C) which makes them ideal for long- giant Tata Power Company to construct an One example of an experimental storage sys- Edison (SCE). The systems will be centrally term battery storage applications. initial 35 MWh facility with an expected date tem based on chemical reaction energy is the controlled to manage peak demand and load of completion in 2019. salt hydrate technology. The principle of this shifting. The nickel-based batteries are mainly the technology is that energy is stored chemi- nickel-cadmium (Ni-Cd), the nickel-metal According to the founders of Energy Vault, cally by separating salt from water and then Siemens Gamesa offers what it calls a cost- hydride (Ni-MH) and the nickel-zinc (Ni-Zn) the system operates about 90 percent ef- released by combining them again. In Eu- competitive technology, electric thermal en- batteries. All three types use the same mate- ficiency, and delivers long-duration storage rope, the Swedish company SaltX Technology ergy storage. In this case, electricity is used rial for the positive electrode and the electro- at half the prevailing price on the market at is piloting a large scale plant with Vattenfall to heat volcanic stones in an insulated con- lyte which is nickel hydroxide and an aqueous present. The idea is to bring something to in Germany by using “salt hydrate” technol- tainer to up to 600 degrees. The heat is later solution of potassium hydroxide with some the energy storage market, for the first time, ogy21. SaltX Technology uses patented nano converted to electricity using a conventional lithium hydroxide respectively. Typical opera- will produce baseload power below the cost coating of the salt, which is claimed to offer steam turbine, achieving a 45 percent round- tional life and cycle life of Ni-Cd batteries is of fossil fuels. In order to achieve this goal, several advantages. One of them includes trip efficiency. This technology could be used also superior to that of the lead-acid batter- Energy Vault must succeed where several preventing the salt from becoming sticky to retrofit fossil-fired power plants and the ies. Despite the above advantages of the Ni- mechanical storage startups, with their own and thus to retain its original single crystal company plans to begin operation at a pilot Cd batteries over the lead-acid batteries, Ni- takes on seemingly simple technological so- form, which in turn increases the number of facility later this year. Cd and the rest of the nickel-based batteries lutions, have failed. A full scale Energy Vault charge-discharge cycles it can undergo. In have several disadvantages compared to the plant, called an Evie, would look like a 35-sto- addition, salt is non-corrosive and also it is 2.1.3 ELECTROCHEMICAL ENERGY STORAGE lead-acid batteries in terms of industrial use ry crane with six arms, surrounded by thou- non-toxic and recyclable. or for use in supporting renewable energy. Electrochemical energy storage systems sands manmade concrete bricks, weighing Ni-Cd battery may cost up to 10 times more have the potential to make a major contri- 35 metric tons each. Another emerging potential competitor for than the lead-acid battery. bution to the implementation of sustainable longer duration storage is cryogenic storage energy. Three important types of this storage (liquid air). England-based Highview Power The third major type of battery storage tech- 2.1.2 THERMAL STORAGE TECHNOLOGIES system are rechargeable batteries, fuel cells began operating a pilot-scale 5 MW cryogen- nology is the lithium-based battery storage (INCLUDING MOLTEN-SALT THERMAL and flow batteries. ENERGY STORAGE) ic energy storage facility near Manchester technology. Lithium-ion battery storage sys- in June 2018. The technology uses electric- tems represent one form of electrochemical BATTERY STORAGE TECHNOLOGIES Thermal energy storage is achieved with wide- ity to chill and liquefy air at -160 degrees of energy-storage system. Globally, electro- ly differing technologies. Depending on the Celsius, store the liquid air in insulated, low Storage batteries are rechargeable elec- chemical energy storage market accounted specific technology, it allows excess thermal pressure tanks and later expose the liquid air trochemical systems used to store energy. for over 3,200 MW installed capacity in 2018, energy to be stored and used hours, days, or to ambient temperatures to rapidly re-gasify They deliver, in the form of electric energy, of which lithium-ion battery storage ac- months later, at scales ranging from the indi- the air, expanding it to 700 times its liquid the chemical energy generated by electro- counted for the dominant share. Lithium-ion vidual process, building, multi-user-building, volume in order to provide power to turbines. chemical reactions. There are three main batteries store power in the form of chemi- district, town, or region. When energy needs In July 2019, for example, Highview Power, a to be stored, rocks, salts, water, or other ma- global leader in long-duration energy stor- 21 Engerati network newsletter. “Salt storage shows promise in Germany”, 30 August 2019. terials are heated and kept in insulated envi- age solutions, announced a contract with 22 Driscoll, W. “A non-battery year for advancing non-battery storage”, PV Magazine, September 2019.

14 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 15 cal energy, offering major advantages such species outside the cell not only increase SUPERCAPACITATOR STORAGE The ultracapacitator system recuperates the as low self-discharge rate, high round-trip the life of battery, but allow the flow battery TECHNOLOGIES braking energy of the trams and uses it for efficiency, and longer lifetime. Research is capacity to be scaled up independently; this re-acceleration, saving energy and decreas- Following Elon Musk’s speech at Cleantech ongoing to further enhance the amount of addresses the GW-scale energy storage re- ing costs. This project in Germany is further Forum 2011, there has been a lot of interest in energy density for lithium-ion batteries. For quired for grid power back-up. This drives proof that ultracapacitators will be the key supercapacitators and for sure the potential instance, high-voltage electrolytes and sili- the importance in flow batteries to be better enabler for smart city transportation systems offered by nanotechnologies is keeping high con anodes are some of the techniques being solution for long-term energy storage, this is in Germany and across the globe. looked at to further increase energy density most likely the best means of storing the in- hopes that at some point in the future, super- capacitators might reach a point where they of these batteries. Ongoing research in en- termittent energy from renewables. 2.1.4 HYDROGEN STORAGE TECHNOLOGIES ergy storage technology has resulted in re- equal the performance of batteries. Superca- duced cost of lithium-ion (Li-ion) batteries Flow battery is a type of rechargeable bat- pacitators (or ultracapacitators) are very high One of the technologies to store excess en- and an increase in their performance. With tery where electricity is generated by the ion surface areas activated capacitators that use ergy produced by renewable energy sources this trend to continue, utility companies in exchange process between two electrolytes. a molecule-thin layer of electrolyte as the is generation and storage of hydrogen. The future are expected to switch to large bat- The electrochemically active components in dielectric to separate charge. The superca- system includes the major components of tery banks as an alternative to building new the electrolytes circulate against each other pacitator resembles regular capacitator ex- an electrolyser, hydrogen storage tank, and power plants. to generate a charge and are charge sepa- cept that it offers very high capacitance in a a fuel cell. The excess from the renewable rated by a thin membrane and surrounded small package. Supercapacitators rely on the sources (e.g. solar and wind) is directed to- Another type of electrochemical energy- by a positive and negative electrode. The con- separation of charge at an electric interface wards an electrolyser to generate hydrogen storage system – sodium-based battery stor- struction principle of a flow battery is based that is measured in fractions of a nanometer, by electrolyzing water into hydrogen and oxy- age – is considered as a future alternative to on directly converting chemical energy to compared with micrometers for most poly- gen. Hydrogen-based energy storage system lithium-ion based battery storage. The main electricity directly. Flow batteries developed mer film capacitators. is one of the promising technologies favora- reason for this move forward toward the based on this requirement are redox, hybrid, ble for long-term large-scale energy storage Energy storage is by means of static charge sodium-based battery is simply because of membrane less, semisolid, organic, metal applications. While receiving rapidly-growing rather than of an electro-chemical process sodium is one of the most abundantly avail- hydride, and nano-network. attention, hydrogen-based energy storage so- inherent to the battery. While comparing able resources in the Earth’s crust. In addi- lutions for such applications areas yet to be the key parameters of Li-ion batteries and tion, sodium can be recovered from seawater. further developed. Only 7 projects were re- supercapacitators, it shows that one of the Moreover, chemical composition of sodium ported to be operational globally by 2016, hav- key benefits of the supercapacitator is its ex- provides inherent protection to the battery ing a combined capacity of just over 7 MW. Ac- tremely high cyclability, meaning that it can in case of overcharging. This fact makes cording to a recent report published research be charged and discharged virtually an un- sodium-based battery storage safer than its in August 2017, the hydrogen-based energy limited times. For systems designers having lithium-ion-based counterpart. storage and technology market reached 3.6 to power systems in harsh environments, su- billion USD in 2016 and is expected to reach percapacitators will operate in very low to high 25 One possible drawback is that sodium-based around 5.5 billion USD by 2021 .The round trip temperatures without degradation, which is battery storage is expected to be physically efficiency today is lower than other storage not the case for batteries. On the downside heavier than lithium-ion-based battery stor- technologies. Despite this low efficiency the supercapacitators self-discharge from 100 to age. Nonetheless, R&D efforts are underway interest in hydrogen energy storage is growing 50 percent in 30 to 40 days, whereas lead and to commercialize sodium-based batteries due to the much higher capacity compared to lithium-based batteries self-discharge about in the near future owing to their aforemen- batteries (small scale) or pumped hydro and Figure 2. Flow battery consists of two tanks of electrolytes 5% during the same period, but technol- tioned advantages. This option will provide pumped against each other separated by a membrane. compressed air energy storage. ogy is improving daily and supercapacitators low-cost storage facilities for large-scale so- Source: www.sciencedirect.com/topics/engineering/ are becoming better. For example, Skeleton lar and wind projects in the future. redox-flow-battery POWER-TO-HYDROGEN (OR OTHER FUELS) Technologies, the European market leader for ultracapacitators and energy storage It is another established technology, at least Flow-based electrochemical energy stor- The Redox flow battery is a type of recharge- systems for transportation and grid applica- for installations of modest scale. Hydrogen age systems have many advantages over able flow battery based on the principle of tions will supply ultracapacitator systems to that is produced using electrolysis can be the solid-state rechargeable batteries. The chemical reduction and oxidation in the pack- power Škoda trams in Mannheim Germany24. stored and used later to generate electricity electroactive species involved in the electron age to store energy in liquid electrolyte solu- transfer is outside the cell and makes battery tions, which flow through negative and posi- capacity independent of quantity present in tive electrodes. Most popular and extensively 23 Dinesh, A., Olivera, S., Venkatesh, K, Santosh, S.M., Priya, M.G, Asiri, A, Muralidhara, H.B. “Iron-based flow batteries to store renew- able energies”, Environmental Chemistry Letters, February 2018. the cell package unlike solid-state recharge- studied redox flow batteries are Vanadium 24 www.skeletontech.com/news/skeleton-technologies-ultracapacitators-to-power-skoda-trams-im-mannheim able batteries. In addition, the electroactive Redox Flow batteries23. 25 Biswas, R. Hydrogen Storage: Materials and Global Markets; bcc Research: Wellesly, MA, USA, 2017.

16 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 17 via fuel cells. This is a potential long-duration AEG Power Solutions in 2018 to build a hy- instance, Shenzhen has over 16 000 electric finding suitable materials for electrodes and energy storing option at least three small in- brid energy-storage system. This system will buses in operation (The Guardian, 2018). To- electrolytes that actually work well together dustrial installations have been announced combine electrochemical and thermal energy- gether with advancement in energy storage without undue compromise to other aspects over the past year, all using the proton ex- storage technology, with the goal of aiding the technologies and the convergence of differ- of a battery design. change membrane (PEM) electrolysis tech- utility’s grid-frequency regulation. ent technologies across different sectors, it nology to produce “green hydrogen” by using paves the way for a radical transformation in With the need to cut down on fossil fuels, solar or wind power to electrolyze water into In October 2017, the utility company RedT the next decades. automotive companies have all been mak- hydrogen and oxygen. The resulting hydrogen provided a hybrid energy-storage system to ing a push into electric cars. For example, may be stored in pressurized vessels, while it Monash University in Australia26. This system This transition is also linked to the electricity Volkswagen and BMW have invested a lot in waits use in fuel cells. As the hydrogen stor- utilizes battery/battery type of hybrid energy- sector for two reasons. Firstly, the increased the development and production of electric age is separate from the electrolyzed units storage system that leverages a vanadium- demand fosters mass-production of batteries cars and therefore the European owned car there is no technical limit to hydrogen stor- based flow battery and lithium-ion based which causes decreasing battery prices which makers are investing in the Swedish start- age capacity. battery. In this system, vanadium-based flow also helps to introduce storage systems in the up Northvolt to build a battery farm to rival battery provides majority of power, while Li- electricity grid. Secondly, the battery storage Tesla’s gigafactory in Europe. It is planned to While PEM and other electrolysis technolo- ion battery provides power during a surge in systems of the traffic sector can also be used produce 16 GWh from the plant annually, but gies are well-established, achieving econo- power demand. as grid storage during times when the vehi- once fully operational, it will be one of Eu- mies of scale is challenging. Hydrogen tech- cles are plugged-in for charging. The link be- rope’s larger battery cell factories and pro- nology may need to expand its foothold across 2.2. ELECTRO-MOBILITY AND ITS tween these two sectors causes major tran- duce 32 GWh worth of capacity annually. For a range of markets, scaling up and driving POTENTIAL ROLE AS STORAGE OPTION sitions in the traditional world of utilities as example, in mid-2018, battery production at costs down before it can become a cost- automobile manufacturers start to produce Tesla’s Gigafactory 1, reached an annualized competitive storage option. The scaling-up In the energy sector, we witness a new phe- their one “green” electricity for their elec- rate of rough 20 GWh. The plan is to build an- process has already begun. In February 2019, nomenon – the convergence of different tric vehicles fleet. On the other hand, utility other factory in Germany in the near future. Hydrogenics Corporation announced plans technologies. Technology convergence is the companies start getting involved in the mo- Although reports show that China is ahead to build 20 MW PEM electrolyzed system in integration of a number of disparate tech- bility sector as they deploy the charging in- when it comes to battery production. Canada for the company Air Liquide. Also last nologies or functions into a single integrated frastructure and develop business models for February, a framework contract for a 30 MW system. The internet and digital convergence electricity supply for e-mobility. Both trends According to Bloomberg data, based on electrolysis project in Switzerland was an- are classical examples of this. A new wave of result in a closer link of these two important planned and existing production plants, 80% nounced by a division of Norwegian-based energy innovation is remaking the transpor- branches of industry. For example, in 2016 the of global capacity for lithium-ion batteries hydrogen company Nel ASA. Another possi- tation, electricity and manufacturing sectors. world’s first fully commercial vehicle-to-grid is likely to be in Asia, and most of it (69%) in ble storage solution is to use green hydrogen (V2G) hub was opened in Denmark in co-op- China. The risk is that, particularly brewing to manufacture ammonia. Japan’s JGC Cor- In particular, the electric mobility revolu- eration between global automotive manufac- trade dispute between China and the US that poration has reported an efficient method of tion is gaining pace. Besides the integration turer Nissan, multinational energy company this will create problems for European car converting hydrogen to ammonia, which can of renewable electricity generation the most Enel, and California-based company Nuvve, manufacturers. There are already factories later be combusted to generate electricity. active field of development for electricity a leading V2G services provider27. With V2G being built in Hungary and Poland by Asian storage systems is the electrification of the technology, electric vehicles will play an inte- actors. Amid the risk of falling behind, the transport sector. The demand for especially 2.1.7 HYBRID ENERGY STORAGE gral part in the energy management systems EU under the Horizon 2020 program has set lithium-ion battery systems rises rapidly due of the future. This technology helps enhance aside 1 billion USD for battery projects and Hybrid energy-storage systems combine sev- to the introduction of plug-in hybrid and full grid stability, further enabling the integration financing building facilities and the Euro- eral different energy-storage technologies electric vehicles. Electric vehicle (EV) sales of renewables into the generation mix. pean Investment Bank. For example, in May to form a single energy-storage system. The (both battery-electric and plug-in hybrids) 2019, EIB committed 350 million euros in a potential of these systems is the advantage of surpassed 2 million units in 2018, a 58 per- Battery technology is an area of constant in- loan to Northvolt for the building of Europe’s better reliability and availability, as well as an cent growth over the previous year. In Norway, novation. To meet the future needs of our so- home-grown gigafactory for lithium-ion bat- increase in overall efficiency. EV sales grew 40 percent in 2018, with nearly ciety, a huge improvement in the performance tery cells. However, it is not the only battery half of all passenger sold being electric that of batteries is key, with new designs that need project in the EU. French battery-maker Saft, Currently, some of the types of hybrid energy- year (Elektrek, 2019). The switch to electricity specific purpose. Although batteries were in- Polish Umicore and the Swedish renewable storage systems under pilot-stage implemen- is not just happening with cars. Electric bus- itially a simple technology their development battery manufacturer Nilar are some of them. tation are thermal/battery, battery/battery, es are making large-in-roads, particularly has been slow compared with other areas of and ultracapacitator/battery. For instance, a in China, where some cities have converted electronics. A major research hurdle lies in To sum it up, the storage developments have utility in Bremen, Germany contracted with their entire public bus fleet to electricity. For

27 Biswas, R. Hydrogen Storage: Materials and Global Markets; bcc Research: Wellesly, MA, USA, 2017. 26 Engerati network newsletter. “Hybrid battery system: the best of both worlds”, 18 September 2019.

18 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 19 A Number of New Lithium-ion Factories Planned in Europe age increases, the deployment of fast-charg- senger vehicles, buses, and delivery trucks ing infrastructure is anticipated to be key to are all rapidly becoming electric, and local drive faster EV adoption. Another significant heavy trucking is expected to follow. While LIB GIGA FACTORIES impact of EV growth will be the scaling of en- global electric vehicle forecasts vary, the con- CAPACITY BY 2025 32 GWh by 2023 ergy storage. The demand for batteries driv- sensus is that EV will grow significantly over is looking at 600 en by the growth of EVs will continue to trans- the coming decades. This growth in EVs will

launching battery GWh production in Europe form the battery supply chain, reduce energy substantially impact electricity ecosystem. 300 storage costs, and accelerate its adoption. The increase in electricity demand will provide 7.5GWh by 2020 new opportunities for electricity suppliers, but At the same time, energy is changing, as we unique EV requirements can create overloads 0 US Europe China Built a 4GWh fplant are moving toward energy systems that are on local grids. In the future, EVs will also cost signed a deal to Source: Benchmark Minerals and plans to triple it build a factory that cleaner and increasingly decentralized, with significantly less per mile than vehicles with would launch Built a 3GWh factory energy generated, stored, and distributed internal combustion engines for personal use production in 2023 closer to the final customers, with renewa- – by as much as 40 percent – and could also bles and storage technologies. At the same reduce congestion and traffic incidents. time, digitalization will allow customers To set up a lithium ion and electricity system operators to control, Hydrogen and fuel cell technologies offer batteries assembly selecting the final plant and would where, when, and how electricity is being greater personal choice in the transition to a site for a large-scale consider producing used and new business models to emerge. low-carbon economy. That is also the reason lithium-ion cell, cells on the site plant tn the EU And finally, new and more energy uses are why hydrogen and fuel cells are seeing a re- in the future going to be electrified – mobility being one of surgence in interest: large-scale production the critical ones. of fuel cell vehicles has begun, and hundreds Announced plans Favors Germany of thousands of homes are now heated and for a 24GWh battery as the location for 28 $230M in German EV The next decade in transportation is expected powered by fuel cells . By 2030 it is anticipat- plant in Germany its first European battery factory plan to dramatically change due to three major ed that the number of hydrogen refueling sta- Gigafactory Infinity Lithium Corporation trends – electrification, autonomous driving, tions will increase across China, the United and the shared economy. The exponential States, Japan and South Korea from the cur- Modified from: Infinity Lithium Corporation 2019 technological progress, combined with dis- rent figure of 1,000 up to 8,500. Battery pow- ruptive social dynamics, make forecasting ered electric vehicle exhibit higher overall ef- the speed and magnitude of change difficult. ficiency as long as they are not too heavy due shown that battery storage is not the only For example, in a pilot project in Denmark, This is the position we find ourselves, where to large battery sizes, making them ideally game in town. Other technologies that are Enel and Nissan set up the first vehicle-to- the automotive sector is concerned. Accord- suited for short-distance and light vehicles. capable of long-term storage are also mov- grid (V2G) commercial hub: by selling fre- ing to the forecasts, 60 percent of car man- ing forward. quency regulation services for system bal- ufacturers intend to have some form of au- The transformations happening in the fields ancing purposes to the Danish transmission tonomous vehicle on the market by 2025, but of energy and mobility are inevitable, influ- 3. CONVERGENCE OF TECHNOLOGIES IN system operator (TSO), a car can generate back in 2016 only 1 percent of all vehicle sales enced by market factors and megatrends that THE ENERGY SECTOR around €1,500 in annual revenue. New busi- came equipped with any form of autonomous are virtually unstoppable. Their convergence ness models are possible, where the drivers driving capability. Currently only 5 percent is the opportunity. The energy sector will have With the implementation of disruptive tech- and fleet operators of EVs could play as pro- of cars sold around the world have electric to accelerate the path toward a cleaner, more nologies we can see a new trend, convergence ducer-consumers of energy services, such as vehicle powertrains. However, we at present digitalized and decentralized system, yet one of different technologies, e.g. energy systems vehicle-to-everything (V2x) and smart charg- know that 50 percent of the new models de- that is more connected and customer centric. and mobility assets help each other. Electric ing. These new energy services will create veloped up to 2021 will have this facility. We The mobility sector will have the opportu- vehicles can be used as a decentralized en- additional opportunities for revenue sharing are also seeing massive consumer shifts in nity to develop new business models based ergy resource and provide new, controllable between the vehicle owners and the energy the areas of in car connectivity and shared on service and sharing models, and the new storage capacity and electricity supply that is suppliers that would reduce the total cost mobility. All these abovementioned changes uses and services associated with EVs as useful for the stability of the energy system. of ownership of the EVs and accelerate their will transform the way transport consumers, decentralized energy resources. The conver- In markets where regulation allows EVs to be market penetration. There will be a need to fleets, and companies consume energy. Pas- gence of IoT, software, Big Data29, analytics used as a source of flexibility, energy players augment existing and build new grid infra- start betting on this vision, with cars working structure in order to accommodate charging 28 Staffell, I., Scamman, D., Velasquez Abad, A., Balcombe, P., Dodds, P.E, Ekins, P., Shah, N., Ward, K.R. “The role of hydrogen and fuel cells in the global energy system”, Energy &Environmental Science Journal, 2019, 23 as “batteries on wheels.” EVs. As EV batteries grow in scale and mile- 29 Big data is a term often used to describe sets of data characterized by high volume, high velocity, and high variety, and for which the use of advanced analytical tools is required in order to process data into actionable information by identifying patterns, trends, and relationships.

20 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 21 and the growth of renewables is revolutioniz- intermittent and less reliable. The govern- ing non-battery storage”. PV Magazine, Sep- 18. NAVIGANT. Energy Cloud 4.0. Capturing ing the energy system. A new energy world is ments face a significant challenge in creating tember 2019 Business Value through Disruptive Energy Plat- emerging, in which digitally enabled services a dynamic energy market that can success- forms, White paper, March 2018, Chicago, USA allow opportunities for increased savings fully accommodate the spectrum of green 8. Engerati network newsletter. “Salt storage and greater efficiencies. Blockchain technol- and disruptive technologies into the energy shows promise in Germany”, 30 August 2019 19. Nissan International press-release “Nis- ogy has gained significant levels of attention generation mix. If this is going to be achieved, san, Enel, and Nuvve Operate World’s First across several industries and is believed to innovative disruptors in the market have a 9. Engerati network newsletter. “Hybrid bat- Fully Commercial Vehicle-to-Grid Hub in be a disruptive technology. At its core, Block- key role to play. In much the same way tech- tery system: the best of both worlds”, 18 Sep- Denmark”, 2016 chain technology is a ledger that is shared, nology and innovation has had transformative tember 2019 replicated, and distributed. It can be used to effect on sectors such as retail, so it can have 20. Van Nuffel, L. Study: “Sector coupling: manage and record transactions across mul- a similar effect in the energy sector. 10. International Energy Agency (IEA). World how can it be enhanced in the EU to foster tiple network participants, on which the trans- Energy Outlook 2018. grid stability and decarbonisation”. Novem- actions can be triggered based on predefined Disruption in the energy industry is happen- ber 2018, Brussels conditions. These core characteristics of this ing at many levels, and the huge increase in 11. Institut für Stromrichter Technik für Ele- technology seem to be well-fit to accelerate renewables over recent years, innovations ktrische Antriebe. Technological Overview of 21. Seba, T. “Clean Disruption of Energy the digitalization, decarbonisation, and decen- in technology and consumers taking a much Electricity Storage. Overview on the potential and Transportation – How Silicon Valley Will tralization trends transforming energy indus- more active interest, are going to have a huge and on the deployment perspectives of electric- Make Oil, Nuclear, Natural Gas, Coal, Electric try. Artificial intelligence is another technology impact on the sector. It is a landscape that is ity storage technologies. June 2012, Germany Utilities and Conventional Cars Obsolete by that is in its early stages of implementation shifting continually and the goal posts can 2030”, 2014 and poised to revolutionize the way energy is change very rapidly. 12. International Renewable Energy Agency produced, transmitted, and consumed. (IRENA). Innovation Landscape for a Renew- 22. Skeleton Technologies press-release. BIBLIOGRAPHY: able-powered Future: Solutions to integrate “Skeleton Technologies’ Ultracapacitator to 4. CONCLUSIONS variable renewables. Abu Dhabi, 2019 Power Škoda Trams in Mannheim, Germany”. 1. Renewables Global Status Report: 2019 22 August 2019 The energy sector is in the midst of a major Strategic Directions: Electric Report. Repow- 13. Kelly-Detwiler, P “Energy Vault Receives global transformation that is primarily be- ering the Power Industry 110 million USD from SoftBank for Gravity-As- 23. Smart Energy International newsletter. ing fueled by multilateral efforts focused sisted Power Storage”. Forbes, August 14, 2019 “U.S Army develops largest battery energy on decarbonizing the global economy to ad- 2. Biswas, R. Hydrogen Storage: Materials storage system”. 23 August 2018 dress climate change and a shift toward an and Global Markets; bcc Research: Wellesly, 14. Ladislaw, S., Naimoli, S. Transform- increasingly clean, intelligent, mobile, and MA, USA, 2017 ing the U.S. and EU Electric Power Sectors. 24. Staffell, I., Scamman, D., Velasquez Abad, distributed energy ecosystem. Linear value Workshop Report and Recommendations A., Balcombe, P., Dodds, P.E, Ekins, P., Shah, chains supporting one-way power flow from 3. British Petroleum (BP). BP Technology for Transatlantic Cooperation. August 2019, N., Ward, K.R. “The role of hydrogen and fuel centralized generation to end-customers will Outlook 2018. March 2018, London Center for Strategic International Studies cells in the global energy system”, Energy give way to a more sustainable, highly digi- (CSIS), Washington D.C &Environmental Science Journal, 2019, 23 tized, and dynamic energy system. 4. Capgemini. WEMO (World Energy Markets Observatory), 2018 15. Lambert, M. Power-to-Gas: Linking Elec- 25. Whiteman, A; Esparrago, J.; Rinke, T.; El- Disruptive technologies will be a key factor tricity and Gas in a Decarbonizing World?” sayed, S.; Arkhipova, I.; Strinati, C.; Alay, L.F. of the energy sector over the coming years. 5. Cava, F., Kelly, J., Peitzke, W, Brown, M., Oxford Institute for Energy Studies, Oxford Renewable Energy Statistics 2017; Interna- There are two other factors as the carbon Sullivan, S. Advanced Rail Energy Storage: Energy Insight: 39. October 2018, London tional Renewable Energy Agency (IRENA): agenda and increased customer engagement. Green Energy Storage for Green Energy”, Masdar City, UAE, 2017 The energy dilemma – affordability, safety and Storing Energy with Special Reference to Re- 16. Manning, R. “Renewable Energy’s Coming security – can be dealt with by the growth of newable Energy Sources, 2016, pages 69-86 of Age: A Disruptive Technology?”, Atlantic 26. Willuhn, M. “Toshiba to Start Power-to- renewables as well as improved electric ve- Council, Issue Brief, December 2015 Gas supply chain demonstration facilities in hicles infrastructure, demand driven smart 6. Dinesh, A., Olivera, S., Venkatesh, K, San- Japan”. PV Magazine, 30 May 2018 meters and blockchain which contribute to the tosh, S.M., Priya, M.G, Asiri, A, Muralidhara, 17. Morstyn, T., Chilcott, M., McCulloch, M.D. move toward a decentralized energy system. H.B. “Iron-based flow batteries to store re- “Gravity Energy Storage with Suspended 27. Wolfe, F. “How Artificial Intelligence Will newable energies”, Environmental Chemistry Weights for Abandoned Mine Shafts”, De- Revolutionize the Energy Industry”. Harvard However, increased renewables will also Letters, February 2018. partment of Engineering Science, University University newsletter on Artificial Intelli- present challenges, since while sources like of Oxford. Applied Energy, April 2019 gence, 2017 wind and solar are stable, they can also be 7. Driscoll, W. “A non-battery year for advanc-

22 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 23 generation and storage (e.g indium, lithium, als. Many rechargeable batteries are made The strategic importance of cobalt, vanadium, and gallium). with REEs compounds and the demand for batteries is driven by the demand for portable Rare earth elements (REEs) are a group of 17 electronic devices such as cell phones, port- rare earth minerals for NATO, chemical elements that occur together in the able computers, and cameras. The volatile na- periodic table. The group consists of yttrium ture of wind and solar energy creates a prob- EU and the United States and and the 15 lanthanide elements1. To date, lem for utility companies that need to match more than 250 rare earth minerals have been the amount of energy supply at all times to the discovered containing rare earth elements. amount of demand. Storage technologies, in- its implications for the energy The concentration of rare earth elements in cluding batteries, offer a way to maintain the minerals ranges from 10 to 300 ppm (parts supply-demand balance by drawing electric- per million used as a unit of concentration)2. ity from the grid when renewable energy are and defense sectors The challenge lies in discovering REEs that abundant and sending it back when demand can be mined and processed economically. picks up. Compared to other technologies, by Ms Marju Kõrts lithium-ion batteries are lightweight and com- Despite the fact that chemically these ele- pact with high storage capacity for their size. ABSTRACT 1. RARE EARTHS AND CRITICAL MINERALS ments have been lumped into one group, Looking ahead, improvements in redox or flow are earth materials such as cobalt and AS GEOPOLITICS OF UNEQUAL DISTRIBUTION they are often divided into groups of “light” batteries are making them an increasingly lithium have become a cornerstone of With the increasing concerns about climate and “heavy”, as defined by their atomic num- promising option for stationary applications. global government initiatives aimed at change and reliability of supply of fossil fuels, ber. The distinction generally indicates their improving energy efficiency, increasing growing attention has been drawn to the in- geological occurrence, light being more Rare earth elements are essential for the de- R abundant, heavy being less so. Scandium is fense sector. The military uses night-vision renewable power generation capacity and re- troduction and implementation of renewable ducing greenhouse gas emissions. Rare earth energy, and emerging technologies such as found in most rare earth element deposits goggles, precision-guided weapons, commu- minerals are a critical aspect of energy security photovoltaics, fuel cells, and wind turbines. and is sometimes classified as a rare earth nications equipment, GPS equipment, batter- and independence, both directly affecting na- As a consequence, the raw materials are element. All rare earth elements are met- ies and other defense electronics. Rare earth tional security. Furthermore, it is their applica- required for these technologies, which are als, often referred to as “rare earth metals”. metals are key ingredients for making the tions in clean energy technologies and defense indispensable or can hardly be substituted, These metals have many similar properties, very hard alloys used in armored vehicles and systems that have brought global attention to have become the focus of concern. Among and often are associated in geologic deposits. projectiles that shatter upon impact. Alterna- rare earth elements. Due to the growing eco- these materials, rare earths (referred to as They are also referred to as “rare earth ox- tives to rare earth metals in some defense ap- nomic and the persistent strategic importance REEs) have become critical and important. ides” because many of them are typically sold plications can be found; however, those substi- of these sectors, continuous access to these re- as oxide compounds. tutes are usually not as effective and diminish sources is strategically important. The current Strategic minerals also known as critical min- the performance of military material. global production and the availability of several erals is a broad-based category that consti- REEs are indispensable and non-substitutable critical metals is insufficient for a transition to tutes various minerals and elements, the ma- for emerging technologies due to their unique To meet the rapidly rising demand, produc- a renewable energy system. However, the dis- jority of which are minor metals. Geographic physical and chemical properties. Historically, tion of most minerals has significantly in- tribution of rare earth elements over the world availability of domestic supply often defines REEs were widely used for metallurgy, petro- creased over the past few decades. However, is uneven. The supply chain of rare earth met- which minerals are deemed critical for any leum, textiles, and agriculture. As knowledge production of many high-demand minerals is als is overwhelmingly controlled by China that particular country or region. Critical miner- and development expanded, a broad range of concentrated in just a few industrialized coun- 3 dominates the mining, processing and manu- als include compounds that are economically applications that rely upon their chemical, cat- tries, mainly in China and Malaysia , creat- facturing of the metals. This has some negative important and subject to risks of supply. In alytic, electrical, magnetic, and optical prop- ing increased risk of price spikes and supply effects which became obvious during the ‘rare this article, the term “minerals” includes me- erties emerged, especially in many high-tech disruptions. Due to its dominant role in the earth crisis” lasting from 2010 to 2012, when tallic and non-metallic elements and miner- applications. The REEs are used in very small field of technology metals, it is crucial to un- a territorial dispute between China and Japan als (sensu stricto), which in most cases are quantities and act as so-called technological derstand China’s political and economic ambi- escalated into a trade embargo. compounds of elements. Critical minerals spice metals in catalysts, alloys, magnets, so- tions and the drivers of its behavior. China to- include the rare earth elements (REEs) used lar systems and computers. During the past day produces at least 80 percent of antimony, This article highlights the risks of strategic for building wind turbines, magnets and new twenty years, there has been an explosion in bismuth, gallium, magnesium and tungsten, vulnerability of the western countries due battery types. Other uses are for special alloys demand for items that require rare earth met- and more than 65 percent of natural graphite, to the Chinese monopoly on rare earths and (e.g tungsten, rhenium, and niobium), chemi- 1 Lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, discusses possible mitigation measures in cal catalysts (e.g rhenium, platinum-group erbium, thulium, ytterbium and lutetium. the international context. elements or PGEs) and for renewable energy 2 Yufeng Chen and Biao Zheng “What Happens after the Rare Earth Crisis: A Systematic Literature Review”. Sustainability 2019, 11, 1288. 3 https://minerals.usg.gov/minerals/pub/mcs

24 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 25 germanium and scandium4. It is well-known The underlying driver for both lithium and armed groups and earned the epithet “Afri- technology minerals and the Chinese govern- that China possesses most proven reserves of cobalt demand is the electric vehicles revo- ca’s World War”. The militia groups are still ment’s ability to constrain supply has shifted REEs. Concurrently, it is the largest exporter lution, which is gathering pace. Cobalt is a involved in ongoing insurgencies and con- the focus of the debate to the international and consumer of rare earths in the world. cathode material in lithium-ion batteries that flicts with resource extraction fueling militia trade dimensions of this challenge. China has supplied more than 90 percent of needs addressing urgently as it has a risky violence and weapons purchases. Most of the the world demand in past decades. Conse- supply chain partly due to geopolitical issues. cobalt in the DRC is located in the former Ka- In the current trade dispute between the quently, the rest of the world, including the Half of the world’s current cobalt reserves lie tanga province (which was split into Tanganyi- United States and China since 2018, rare United States, Japan, and the European Union in the Democratic Republic of Congo (DRC), ka, Haut-Lomami, Lualaba and Haut Katanga earths have been brought into play by the has developed a strong reliance upon the ex- and the country is expected to account for provinces in 2015) in the country’s far south. Chinese as a possible means of pressure. The ploitation and exportation of China’s rare earth about 70 percent of global supply by 20205. Katanga’s rich resource wealth has driven dominant position of China in these strategic minerals, which make them concerned about Ominously, the DRC has a history of being ex- political events in the DRC for decades. For commodities constitutes a structural mar- the risk of the supply of rare earths in view of ploited for its natural resources, first by the instance, Katangan secessionists were heav- ket problem with technological and security the dominant position of China in the world Belgium colonial regime, then mining corpo- ily involved in the 1961 killing of Patrice Lu- implications for western industrialized coun- market of rare earths. In 2010, China decided rations and foreign powers that were deeply mumba, the Congolese independence leader tries. While China may not be cutting off rare to implement a stringent exportation policy, involved in the First and Second Congo Wars. and the DRC’s first prime minister. earth minerals yet, it is not afraid to show which directly resulted in a surge of the price The Second Congo war broke out in 1998, and that all options are on the table. Without a re- for rare earth products. If mineral supplies officially ended in 2003 when a Transitional Geopolitics and economics of rare earth liable domestic supply, the U.S. must rely on from China were suddenly interrupted, other Government took power. It was the widest metals is not only about China: Brazil is the rare earths from China to supply their indus- Nation’s economy and national security could inter-state war in modern African history world’s dominant producer of niobium and, tries of strategic importance. Although there be threatened. There has also been a growing that directly involved 9 African nations (e.g. the United States produces over 90 percent of are different alternatives in terms of techno- recognition that mineral scarcity can hamper Namibia, Zimbabwe, Angola, Chad, Uganda, the world’s beryllium. Production of platinum logical innovations (recycling, substitution, the speed of key technology development. Rwanda, Burundi and etc.) as well about 20 group metals is concentrated in Russia (pal- re-use and recovery of critical minerals), it ladium) and South Africa (iridium, platinum, is difficult to substitute these metals within a rhodium and ruthenium), while Australia specific application due to their unique prop- Countries accounting for the largest share of global critical minerals supply and Turkey are significant producers of spe- erties. Another option on the basis of the U.S cific metals such as neodymium and boron example will be to rebuild their rare-earths respectively. Europe and the U.S. are over- industry in order to increase its domestic Russia whelmingly dependent on China, which is in supply, but it would take at least 10 years. Palladium 46% a position to control global supply – a position That may leave enough time for China to win that could be easily abused6. a trade war against the U.S., during which - China’s de facto monopoly on the production According to the United States Geological of rare earths will help it to control the pro- Survey, the most recent estimate of the total ductivity of the U.S. high-technology sector. USA France Hafnium 43% China world reserve of rare earths is approximately Beryllium 90% Antimony 87% Helium 73% 140 million tons. China with 55 million tons The U.S, Japan, the European Union and Baryte 44% Turkey Bismuth 82% and India (35 million tons), hold over 2/3 of South Korea have all been keenly focused Borate 38% Coking coal 54% the world REE reserves while the United on securing mineral supply for their do- Fluorspar 64% States have 13 million tons. Although the mestic industries through a range of politi- Gallium 73% United States have significant reserves, their cal initiatives. These efforts included World DRC Rwanda Germanium 67% Tantalum 31% Cobalt 64% Indium 57% demand for minerals far outweighs domestic Trade Organization (WTO) dispute resolution Brazil Magnesium 87% 7 Niobium 90% Thailand supply as it has only one U.S domestic pro- mechanisms , as well as, research and de- Natural graphite 69% Natural rubber 32% Phosphate rock 44% duction plant. This means that the U.S. de- velopment investment in finding alternatives. South Africa Phosphorus 58% pends on China, a nation with its own rising Generally, the risk of price spikes and supply Iridium 85% Scandium 66% Platinum 70% demands for the minerals. China supplies disruptions may change over time as a result Silicon metal 61% Rhodium 83% Tungsten 84% about 80 percent of the rare-earth elements of geopolitical shifts, rapid increases in de- Ruthenium 93% Vanadium 53% imported by the United States. The domi- mand, or happen due to other supply chain LREEs 95% nance of China as a global supplier of many factors. The focus has also shifted towards HREEs 95% 4 Mineral Commodity Summaries, United States Geological Survey (USGS), 2018 and Deloitte Sustainability, BGS, BRGM and TNO, Study Modified from: European Commission (2018) Report on critical raw materials and the circular on the review list of Critical Raw materials, European Commission, June 2017, pp. 44-45 economy. [https://publications.europa.eu/] 5 Ross, Nick. “The cobalt boom: recharging trouble in the Congo” Foreign Brief (10 September 2017). 6 Johnson, Keith, Groll, Elias “China Raises Threat of Rare-Earths Cutoff to U.S” Foreign Policy (21 May 2019).

26 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 27 considering strategic stockpiles of minerals tors (catalysts, glass, polishing, and LaNiH tive9 suggests that global electric vehicle pro- flow cells, the industry hopes for an alterna- from internal sources, an approach that goes batteries). For example, in the energy sector, duction will increase from 3,2 million units in tive that works with less cobalt. as back to the Cold War era strategies of ma- the development of wind power (requiring 2017 to 13 to 18 million units by 2025 reaching terial security. The potential solutions may several REE’s) and domestic energy storage 26 to 36 million units in 2030. As cobalt is a Although consumption and demand for REEs include diversifying mineral supplies, devel- (mainly requiring cobalt and natural graphite) by-product of copper or nickel and so its sup- will change with technology, many of the cur- oping substitutes for materials and technolo- are expected to drive up the critical mineral ply also depends on demand of these parent rent geographic, social, economic and geo- gies that use specific minerals, increasing demand in the coming decades (Figure 1). materials. A recent deal between the South political questions associated with natural recycling, and ensuring that critical minerals Magnets in wind turbine generators are a mix Australian state government and billionaire resources exploitation remain: where are are efficiently used. of iron, boron and REEs which improve their Elon Musk’s Tesla to build the world biggest these resources situated, who holds the keys performance. Smaller and lighter permanent lithium-ion (Li-ion) battery is a prominent ex- for production, and are there risks of supply 2. DEMAND AND SUPPLY OF CRITICAL magnets generators that require less REEs ample that portends a boom of cobalt mining. shortages? MINERALS are being adopted across Europe (e.g. Ger- man company Enercon developed a gearless In nine out of twelve cases listed, China plays 2.1 SECURING ACCESS TO CRITICAL RAW A low carbon future will be significantly more design for wind turbines that is REE free). The a significant part either as a producer or as MATERIALS AND CRITICALITY mineral intensive, for example global de- largest concern pertains to so-called perma- a refiner of the mineral. These mineral com- mand for strategic minerals such as lithium, nent magnets from the rare-earth elements modities were identified as critical minerals For decades energy security has been high graphite and nickel will skyrocket by 965 per- neodymium and dysprosium. Dysprosium for the United States. up on the agenda of politics and defense. For cent, 383 percent and 108 percent respective- allows magnets to maintain their magnetic fossil fuels the issues of supply threats, inter- ly by 2050 according to the latest report by the properties when operating a high heat. There are notable industry efforts to lower national relations, and security have been ex- 8 World Bank . the cobalt content of batteries, but if electric tensively analyzed in energy policy. Currently The ever increasing demand for smaller and vehicles are to make up a significant share of the global energy security focus shifts from The future demand for REEs is forecast to more powerful portable devices, and the trend the fleet, cobalt will remain in demand and fossil fuel supply and the Middle-East region be primarily driven by the demand for per- towards “all electric vehicles” is fueling the risks associated with its supply will persist10. to rare metals and China, leaving the world manent magnets, with a smaller (but still in- future of battery technologies. The latest esti- Despite some attempts to develop alternative vulnerable to new geopolitical dependencies. creasing) demand for the other key REE sec- mates from McKinsey’s Future Mobility Initia- technologies, such as Toyota’s work on so- dium solid-state batteries11, the importance Criticality of raw materials is, however, all a of cobalt in rechargeable battery electrode matter of degree, and the criticality of any MINERAL COMMODITIES USED IN BIGGEST PRODUCERS production is not expected to diminish. The given mineral at any time is both dynamic and context specific. The definition of criticality Brazil, China, Madagascar, battery industry already consumes approxi- Beryllium Wind energy Mozambique, Portugal mately 42 percent of global cobalt production derives, on one hand, from the concentration of raw materials in certain geographic areas, Cobalt Batteries, energy storage, electric vehicles The Congo, Biggest refiner China and it is expected to increase significantly over the coming years due to the rise of in- and on the other hand, the impossibility of Gallium Solar power systems Biggest refiner China dustrial-use batteries, including commercial replacing them with similar materials in the production process. Supply options include Germanium Solar power systems, fiber-optic cables Canada, China, Finland, the Congo power-storage facilities, household energy- storage units and electric vehicles12. developing new sourcing strategies, end of China (50%), Belgium, Canada, Indium Solar power systems life recycling, and increasing production of Japan, South-Korea To prevent supply shortfalls, the focus of the material (through either new mining op- Graphite Battery technology, electric vehicles China (67%), India, Brazil numerous research projects is on the devel- erations or processing yield improvements). Lithium Battery technology China, Australia opment of alternatives to replace cobalt in Demand option solutions include materials electric vehicles batteries. The automotive and manufacturing optimization, material Niobium and Tantalum Energy storage Brazil (90%), Canada industry aims at reducing the amount of co- substitution and system substitution. balt per battery. Through the development of Rare earth elements Clean energy applications China (90%), Australia solid-state battery cells, fuel cells or redox Recycling critical metals seems to be a good Japan (51%), Belgium, Canada, Selenium Solar power systems Japan and the United States 7 World Trade organization (WTO). DS509: China – Duties and Other measures concerning the Exportation of Certain Raw Materials. Tellurium Solar power systems China, Sweden 8 World Bank. The Growing Role of Minerals and Metals for a Low Carbon Future (2017). 9 McKinsey/Bloomberg New Energy Finance. An Integrated Perspective on the Future Mobility (2016). Vanadium Battery technology China, Russia, South Africa 10 Olivetti, E.A, Ceder, G., Gaustad, G.G. and Fu, X. Lithium-Ion Battery Supply Chain Considerations: Analysis of Potential Bottlenecks in Critical Metals. Joule.1 (2), pp. 229-243. 11 These batteries (a form of lithium-ion battery) are often considered to represent the next big leap in battery technologies, and are Figure 2: Mineral commodities most frequently used in wind energy, photovoltaic or battery technologies. likely to be in use in the foreseeable future. They are potentially suited for a large variety of applications: energy storage, electric vehi- Modified from: Schulz et al. (2017), Jorgensen (2002). cles and portable electronics. 12 Conca, James. “Energy’s Future – Battery and Storage Technologies”. Forbes (26 August 2019).

28 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 29 solution to supplement growing demand. China enjoys the global dominance on metals, ply. A home supply (strategic storage) of rare of “critical minerals”, by providing low-inter- It can also help reduce the need to search both base metals and REEs that are required earths is also an aspect of the raw materials est loans to mining companies and requiring for new source of battery materials. Cobalt, to supply technologies in carbon concentrated initiative. Since 2010 the EU has funded pro- defense companies to “buy American”. for example is fully recyclable and roughly future. This applies both to production and jects for the exploration of rare earth deposits. 15 percent of the U.S. cobalt used is from reserve levels even when compared with re- At present, three REE projects are currently AUSTRALIA recycled scrap today. In the European Un- source rich developed countries (such as Can- being explored or being technically and eco- ion, recycling of rare earths is high on the ada, the United States and to a lesser extent nomically assessed, and have reached an ad- In 2019 Australia published its critical miner- agenda. According to a 2018 report, 39 mil- Australia). When China started to strengthen vanced stage of exploration and development als strategy “Critical minerals in Australia: lion of Euros from EU funds have been spent its protection of rare earth resources, some (pilot beneficiation and extraction studies; Review of Opportunities and Research Needs”. on research and development of rare earths nations immediately took action to reduce the pre- and/or final feasibility studies). These According to this report, Australia has the po- recycling in the last decade. Although there Chinese domination in the rare earth sector. include Kvanefjeld and Kringlerne, in South tential to become a major global supplier of are two important factors (technological Countries with own resources of rare earths Greenland, the Norra Kärr, in Sweden15. The critical minerals. It is one of the world’s prin- complexity and the availability of secondary have ramped up their domestic production of REE-reserves for each of the abovementioned cipal producers of several major mineral com- material) that determine the uncertainty con- rare earths (e.g. Lynas Corporation in Austral- projects could potentially secure European modities including bauxite, coal, copper, lead, cerning recycling. Technical complexity relies ia). This company has a mining concentration REE supply for decades to come. However, it gold, ilmenite, iron ore, nickel, rutile, zircon, in the fact that materials are often combined plant at Mount Weld, Western Australia and a should be stressed that no mining company and zinc. Although some critical minerals are and alloyed to enhance and create functional refining facility in Malaysia. is obliged to sell their product to domestic or mined as primary products, many critical min- properties. This in term makes them difficult near-by market. To sum it up, despite prom- erals are extracted as companion products from general mineral production. Consider- to separate and recover. For example, the THE EUROPEAN UNION ising discoveries of potential mines, market Belgian company Umicore, a global leader conditions and price volatility is preventing ing Australia’s leading expertise in mining and of recycling manages to recover only 8 of 25 Much of Europe’s industry is heavily de- them from launching production. processing as well as its extensive mineral critical metals from a smartphone. Although pendent on international markets to secure resources which are likely to contain critical the raw materials it requires. The European minerals, there is potential for Australia to recycling is a good solution to supplement THE UNITED STATES Commission has launched the “European develop into a supplier of critical minerals. growing demand, it is technologically com- 13 plex due to the small size of some of these Raw Materials Initiative which was adopted With China currently controlling 90 percent of Australia’s opportunity to develop into a lead- the world market, the U.S. economic and na- components, which makes recovery costly in 2008, followed by the “European Innovation ing supplier of critical minerals is significant- 14 tional security depends on China for rare earth and time-consuming. The use of waste ma- Partnership on Raw Materials” in 2012. ly affected by a number of factors, including imports. As one of the largest consumers of terials is a new resource for critical minerals geological studies dedicated to assessing and metals and minerals, the U.S. Department and poses an opportunity to recycle. Within the context of the “European Raw Ma- facilitating the discovery of critical mineral re- terials Initiative”, the European Commission of Defense uses as much as 750 000 tons of sources. There is also a need for new mining minerals each year. Thus, the U.S. govern- A combination of innovations, breakthrough has published several lists of critical materi- technologies and services to economically ex- ment has recognized the strategic importance in R&D, and public incentives will be needed als. The first was published in 2011 and iden- tract critical minerals. of rare earths for America’s economy and to secure the long-term availability of these tified 14 materials as being critical for Euro- military. Namely, the present administration critical natural resources. These include the pean society and welfare. So far the list has In order to overcome China’s global REE has taken steps to reduce the dependency on development of new, resource-lean technolo- been revised twice in 2014 and in 2017, and market dominance new strategies and new China, including regulatory relief and other gies that would provide the same functionali- the list of critical raw materials was expand- investments are necessary. On the long run, measures to enable the identification and de- ties but with the use of much less resources, ed to 61 materials. Nine new materials (six some new technologies may reduce the need velopment of critical resources on U.S soil. In e.g. the development of nanotechnologies is abiotic and three biotic) were added, and 15 for rare earths in many current uses, such addition, the U.S. has recently launched the offering such possibilities for a wide range of rare earth elements and five platinum group as for example in nanotechnology. However, Energy Resource Governance Initiative ac- applications. metals (with the exception of osmium) were in the near future rare earths still possess now analyzed separately. Figure 1 highlights cording to which it will share mining expertise a pivotal position in modern industry and the key world producers for the metals and with other countries. For example, the U.S. economy. Therefore, sustainability of rare GLOBAL RESPONSES AND SUPPLY OPTIONS minerals identified as being critical to the will team up with Canada and Australia to help earths supply remains a complex challenge The shift to low carbon energy will produce EU’s economy. The issue of critical materials countries around the world develop their re- for western nations. global opportunities in different continents is not about being resource independent, but serves of minerals like lithium, copper and with respect to a number of minerals. In Asia, rather focuses on the diversification of sup- cobalt. This is a part of a strategy to reduce 2.2 OVERVIEW OF THE CRITICAL global reliance on China for materials crucial MINERALS MARKET: THE MAIN 13 COM (2008) 699 Final, “The raw materials initiative – meeting our critical needs for growth and jobs in Europe”. This strategy involves to high-tech industries. In June 2019, the U.S a) assessing the risk of shortage in the supply of critical minerals, with the view to promoting diversification of the sources and imports Commerce Department recommended imme- SUPPLIERS AND POSSIBLE of raw materials; b) supporting R&D in products’ and processes’ substitution efforts and c) formulating European policy proposals in the CONSEQUENCES OF CHINA’S DOMINANCE framework of the European 2020 industrial and knowledge base economy. diate steps to boost U.S domestic production 14 European Commission (2012) focusing on the reduction of import dependency, improving supply conditions from European and other resources. 15 Antoine Monnet, Amar Ait Abderrahim “Report on major trends affecting future demand for critical raw materials” (2018)

30 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 31 The main characteristic of the global rare CHINA’S EVOLVING MONOPOLY During the same time, China’s lax regulation per year, compared with the estimated 55 000 earths market is that it is considered a com- and cheap labor virtually pushed international tons of non-Chinese demand. When coupled Over the last decades, China has sought to take plicated niche market. Its financial volume competitors out of the market, thereby gain- with the alleged embargo on Japan from Sep- advantage of its rich deposits of rare earths by is about 8 billion dollars, a fairly small sum ing almost complete market dominance. The tember to November 2010, supply risks sud- supporting technological innovation and eco- compared to the iron, aluminum or zinc in- combination of these factors demonstrates denly became clear to western nations. nomic development in a wide range of sectors, dustries16. In addition, it is a rather compli- the long-term strategy of the Chinese govern- from space to defense and energy. It achieved cated industry. ment to gain global control of the REE market. In recent years, China has rapidly adopted a its leading rare earth position through a series strategy of venturing further up value chains of aggressive actions such as attempts to ac- Manufacturing these products requires cut- The liberalization of global trade and invest- and not simply being a cheap supplier of raw quire any physical mining territory and mining ting-edge technology in order to separate ment, and China’s liberalization in particular materials. China has used concerted efforts to companies available. China has purchased and purify the rare earth elements mixed to- allowed globally acting companies to estab- lead entire value chains. As of 2017 a cluster mines outside its own territory, most notably gether in the ore and to produce magnetic al- lish subsidiaries or cooperative enterprises in of more than 200 companies working through- in Australia and Africa20. Between 2005 and loy according to the specifications of industri- China. In turn, it allowed Chinese companies out the value chain from extraction and refine- 2017 China invested 58 billion USD in the sub- al users. This requires leading edge research to acquire technological know-how in the rare ment to the production of permanent mag- Saharan African mining and energy sectors. in metallurgy and materials science, areas in earth sector from abroad. This not only enabled nets, special alloys, batteries, and magnetic Despite currently falling commodity prices, which research is particularly strong in Asia. China to become the dominant upstream pro- sensors exists in the city of Baotou, a hub for China continues to be a leading investor in the For many sensitive raw materials, in the sup- ducer of rare earth oxides, but also to increas- the extraction of light rare earth elements in global mining industry. ply chain that runs from geological expertise, ingly dominate the value chains of some rare China. The focus of the Chinese government upstream to mining operations, metallurgy earth applications such as NdFeB magnets. is on becoming the leader of five value chains and materials science, downstream, the step These magnets were commercially introduced for rare earth elements: permanent magnets, RARE EARTH ELEMENT PRODUCTION of criticality lies in the phases of metal ex- in the early 1980s and they are widely used for polishing powders, luminescent materials, (Metric tons - rare oxide equivalent) traction and purification and in the produc- many different applications (e.g wind turbines, materials for storing hydrogen gas, and cata-

tion of semi products. Today, much of the cut- 140,000 electric cars). In the wind sector, NdFeB mag- lytic converters. Close co-operation between

ting edge experience in metallurgy is found 120,000 nets are used by a number of turbine manufac- industry, universities and research institutions in Asian countries. The key factor here is 100,000 turers to enable “direct drive” systems that are combined with large-scale state funding has the extraction and processing expertise and 80,000 lighter and require less maintenance, a feature been the key to this development. This not only technology that is increasingly owned and 60,000 that is particularly attractive for offshore usage. challenges the European and American man- controlled by China. 40,000 Whereas 23 percent of today’s wind turbines ufacturing industries, but also poses a risk to 20,000 use rare earth containing magnets, the figure is western nations defense industries, which de- 22 The absolute quantity of rare earth elements 0 expected to grow to 72 percent by 2030 .These pends on critical metals.

needed in consumer products is relatively 1994 1995 1996 1997 1998 1999 2000 2001 2002 2004 2006 2010 2017 special high-performance magnets are pro- 2003 2005 2007 2008 2009 2011 2012 2013 2014 2015 2016 low, and the price is governed by the domi- duced outside of China only in Japan. The few Recent trends23 indicate that China’s share of nant Chinese producers. Rare earth ele- Others Russia China remaining European magnet producers have global rare earth mineral production has fallen ments are not standard raw materials traded United States India Austalia almost relocated all of their manufacturing fa- slightly as a handful of new rare earth mines like iron ore, gold and copper; on exchange cilities to China, where they can obtain the rare have become operational outside of China. markets. REEs are traded on so-called OTC earths materials much cheaper. The Chinese However, while China’s share of the mine pro- 17 Figure 3 – Rare Earth Element (REE) production by na- markets with direct agreements between a tions between 1994 and 201721: China’s (red bars) domi- share in global magnet production is estimated duction has fallen, its share of downstream val- 18 few buyers and sellers . Consequently, it can nance in the production of rare earth elements between at more than 80 percent. From the ore to the ue adding capacity to convert rare earth mine be difficult for a new player to gain a market 1994 and 2017 is evident. The United States (purple final product, China is and remains for many outputs in oxides, metals, alloys and magnets share. A specific example is the bankruptcy bars) were a significant producer through the 1990s, REEs a monopolist on several levels. has continuously expanded. This shows China’s of the vertically integrated American pro- but low-priced materials being sold by China forced growing focus on dominating the downstream mines in the United States and other countries out of ducer Molycorp in 2015 as the company was operation. As China limited exports in 2005; and prices Until 2010, very little attention was paid to where profit margins are greater and activities unable to generate profits following the price increased rapidly in 2009 and 2010, mines in Australia the concentration of rare earth production in are environmentally cleaner. drop of rare earth elements after 201119. and the United States became active again. China. Supply and trade in the raw materi- als were seen as stable and, the associated For a producer bringing online a new rare earth

16 Seaman, J. Rare Earth and China: Review of Changing Criticality in the New Economy (Policy Center for the New South/Center for Asian Studies 2019) risks of market concentration were simply mine outside of China in the coming years – be 17 OTC – over the counter. overlooked. From July 2010 on, China set it in Greenland, Canada, Australia or anywhere 18 Report on “Innovation-critical metals &minerals from extraction o final product – how can the state support their development”. Growth stringent quotas on REE exports: 30 000 tons else – there is high probability that these rare Analysis 2017. 19 The Molycorp Silmet plant is now opened by Neo Performance Materials and is still in operation. 22 WindEurope, “Research and Innovation Needed to Provide Substitutes for Rare Materials Used in Turbines” WindEurope News, 2018, 20 King, Hobart.M. REE-Rare Earth Elements and their Uses. Link: https://geology.com/articles/rare-earth-elements/ Last accessed: 26.06.2019 www.windeurope.org 21 Graph by Geology.com using data from the United States Geological Survey. 23 Adams Intelligence. “Rare Earth Elements: Market Issues and Outlook Q2 (July 2019).

32 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 33 earth mine outputs are being further processed newed attention and appear to have a promis- Monitor on Energy Storage released in March long-lasting utility-scale chemical battery in China’s value chain. This, leaves the produc- ing environmental performance. Salt storage 201926. New growth drivers will emerge as the storage to deal with rapid intermittency in ers and end consumers subject to a higher de- produces no emissions during operation and Clean Energy Package27 is enacted and we both generation (renewable energy) and de- gree of market opacity and uncertainty. more than 99 percent of the overall weight can expect E-mobility to become a significant mand (rapid changes in use throughout the of the battery materials can be recycled (the new application for stationary energy storage commercial day). To sum it up; unless the rest of the world steel, the copper and aluminium). Recycling to support the charging infrastructure. At the starts investing in critical downstream link- sodium and sulphur remains a challenge, global and EU level, lead acid technologies The latest technology to emerge is the va- ages to take rare earth mine outputs and however. The major drawback for molten-salt are expected to still prevail in 2025 in terms nadium redox battery, also known as the upgrade them into market-desired materi- technologies is that they need to operate at a of volume, but the lithium-ion market is ex- vanadium-flow battery. These batteries are als, such as NdFeB magnets, all end-users high temperature (300-350 degrees Celsius). pected to become greater in terms of value fully containerized, nonflammable, compact, outside of China will remain reliant on and from 2019 onwards. The use of lithium-ion reusable over semi-finite cycles, discharge vulnerable to China’s monopoly. This will be In the molten form it is now commercially battery is expected to accelerate in the near 100 percent of the stored energy and do not at least true for the foreseeable future – ir- available for the storage of heat from con- future. Their design is likely to evolve during degrade for more than 20 years. Redox flow respective of how many mines are brought centrated solar power on timescales of days. this time, but scientists believe that they may batteries are well suited for stationary energy online elsewhere. In the dry form on the other hand, the tech- soon reach their performance limits in terms storage as they can store energy for a long nology is still emerging, with the potential of energy density. Thus, in addition to efforts time and release it quickly when needed. They 3. STRATEGIC IMPORTANCE OF THE RARE to open the way of storage on timescales of to develop future evolutions of lithium-ion, are durable with a long lifespan (in terms of EARTH MINERALS FOR THE ENERGY AND months and to support the integration of high the quest is now on to identify potential alter- both cycle life and calendar life), efficient, MILITARY SECTORS IN NATO levels of renewables. For example, Swedish natives that offer better performance with an and have reasonable capital costs. In future company SaltX Technology is a pioneer of improved environmental profile28. they can replace lithium-ion batteries as the 3.1 A NEW ENERGY PARADIGM this “salt hydrate” technology and is piloting predominant energy storage battery technol- At the same time, the system is changing and ogy for stationary applications30. Besides the Battery storage is transforming the global a large-scale plant with Vattenfall in Germa- due to the seasonal nature of the renewable earth’s crust has much more vanadium than electric grid and is an increasingly important ny. In this case the pilot plant with a 0.5MW energy, seasonal storage that last for weeks lithium, e.g. on yearly basis twice as much element of the world transition to sustainable power output/input and total storage capacity and months is required. Technology such as vanadium as lithium is produced each year. energy. Firstly, carbon neutral sources, like of 10MWh was commissioned at Vattenfall’s compressed and liquefied air energy storage, wind turbines, solar PV are variable renew- Reuter combined heat and power plant in 24 or flow batteries are needed. The innovative In particular, energy storage will be critical in ables. Due to the volatility of the renewable Spandau, Berlin earlier this year . projects like balloons in the sea, using grav- the coming years for military specific innova- energy, the energy grid based on renewables ity, carbon nano-tubes or ultra-capacitators tion, electric grid security and clean energy cannot answer to the spikes in demand very At present, the most widely used storage – we will see a lot of technology evolving in development. For example, the Otis Air Na- quickly. Simultaneously, battery technolo- method is pumped hydro storage, which uses the next few years29. Solid-state batteries, tional Guard base on Cape Cod, Massachu- gies are getting better, recently Jack Good- surplus electricity to pump water up to a res- for example those being developed by French setts boasts the military’s first wind-powered enough, the inventor of Li-ion battery, came ervoir behind a dam. Later, when demand for battery maker Saft, are a promising future microgrid. The installation, which includes out with a new fast-charging battery tech- energy is high, the stored water is released technology, since they will have energy den- one wind turbine, a diesel generator, and bat- nology that uses a glass electrode instead of through turbines in the dam to generate elec- sity and less risk of spontaneous combus- tery storage, can power the base for up to 120 a liquid one, sodium instead of lithium, and tricity. Currently around 96 percent of storage tion. As well, there are other gravity-based hours in the event of an outage. The project may have three times as much energy density is pumped hydro and of the remaining 4 per- energy storage systems like Advanced Rail was funded in part by the state of Massachu- as lithium-ion batteries. cent, by far the biggest share is lithium-ion. They are the fastest growing form of battery Energy Storage that uses surplus wind and setts (U.S.) with the aim to develop renewable solar energy to move millions of pounds of energy on military bases31. In addition to batteries, we do have other on the worldwide market, with the potential rock uphill in special electric rail cars that technologies for storing intermittent energy to dominate the market in the short term. roll back downhill, converting this gravita- To sum it up, the mineral requirements for such as thermal energy storage, which al- The global battery market could be worth 250 tional potential energy to electricity that goes the deployment of solar panels (mainly sili- lows cooling to be created at night and stored billion euros per year from 2025 onwards ac- out onto the grid. We need large, stable and con, indium and gallium) should become less for use the next day during peak times. Salt cording to the European Commission25, and

is gaining ground as a contender for thermal batteries are likely to play a key role in de- 27 Based on the European Commission proposals published in November 2016, the Clean Energy for all Europeans package consists of 8 energy storage. Salt storage as one form of carbonizing the road transport sector. Stor- legislative acts (e.g the recast of renewable energy directive, amending the directive of energy efficiency to name some of them). After political energy storage is not a new technology, but age capacity in Europe will reach 5.5 GWh agreement by the Council and the European Parliament in 2018 and early 2019, enabling all the new rules to be in force by mid-2019, the EU countries have 1-2 years to transpose those directives into national law. these technologies are receiving much re- by 2020, according to the European Market 28 European Commission/Science for Environment Policy. “Future Brief: Towards the battery of the future”. Issue 20 (September 2018). 29 Clerens, Patrick. “Storage is the backbone of the energy transition”. EASE newsletter (30 August 2019). 24 Engerati network’s newsletter. “Salt storage shows promise in Germany” (30 August 2019). 30 Weber, A.Z, Mench, M.M, Meyers, J.P., Ross, P.N, Gostick, J.T. and Liu, Q. Redox flow batteries: a review. Journal of Applied Electrochemistry. 25 Battery 2030+ Initiative focuses on the future battery technologies that are essential for electric vehicles, clean mobility, renewable energy 41 (10), pp.1137-1164. storage, and a range of emerging applications (including robotics., medical devices, and aerospace) 31 Nexus Media. “US military Bases using Solar, Wind &Battery Storage for Energy Security (17 November 2018). 26 EASE. “European Market Monitor on Energy Storage” (March 2019). Link: www.ease-storage.eu/category/publications/emmes

34 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 35 critical by 2035 due to improvements of ma- tor, they have a strategic importance for the and operated by both conventional manned earths are also sold by Brazil, Russia, Aus- terial efficiency. Thus, the rare earth miner- functioning of increasingly networked high- platforms and autonomous Unmanned Aerial tralia, Burundi or the United States. A sig- als (REEs) will be the prime enablers of the tech armies. For example, an American sub- Vehicles (UAVs)37. nificant rise in the global price would make global energy transition and its low carbon marine of the Virginia class requires about mining in those countries feasible. Some technologies and systems. This also means four tons of rare earth materials, an Arleigh According to the most recent U.S Geological rare earth minerals can even be profitably that global production of rare earth minerals Burke class destroyer more than two tons, Survey Mineral Commodity Summary 2019, produced from recycling. The measures to used in solar panels and wind turbines must and an F-35 fighter jet more than 400 kilo- the U.S. is 100% dependent on foreign sup- reduce China’s dominance at the rare earth grow twelvefold until 205032. grams. Further areas of REE use are aero- ply for 20 metals and minerals, and 50% or market require a realistic assessment of space engineering, surveillance systems and more dependent for another 43 metals and the resources, the economic, political and Important drivers to monitor in this sector lasers. The more sophisticated the military minerals. That is nearly half of the naturally geostrategic constraints and development of include policies to further reduce carbon equipment becomes, the more diverse is the occurring elements on the Periodic Table. joint approaches. dioxide emissions, incentives for distrib- demand for rare earths for the armed forces Such deep dependency is the main concern uted power generation, power and storage in the future. This is a trend that no army of expressed in the President’s Executive Or- Even in the hypothetical absence of China’s requirements related to the deployment of NATO countries can deny, however, a present, der on Critical Minerals, issued in December erratic political behavior, the market of rare electric vehicles33. NATO’s import dependency on China’s rare 2017. The strategic problem of critical min- earths would always be prone to wild fluctua- earths is nearly 100 percent. erals dependency was raised most recently tions due to its small size. To cope with this 3.2 THE NATO’S DEFENSE SECTOR when the Commerce Department released challenge, western allies need to obtain an 4. INCREASED INTEREST IN CRITICAL a report requested by President Trump to accurate, and up-to-date picture of this com- Securing the supplies of critical minerals is investigate the U.S. access to rare earths in paratively small and non-transparent com- vital for NATO members and its allied part- MATERIALS AVAILABILITY – NATO, THE U.S. AND THE EU case of an emergency. According to the re- modities market. It would be desirable that the ner countries not only from an economic, but port, the United States is heavily dependent western allies get a clear idea of how strongly also from a security point of view. The west- For rare earths materials, NATO countries on critical minerals imports. China dominates the field. NATO planning ern allies’ military sector increasingly relies and the rest of the world depend on China. circles and defense sector politicians need to on dual-use equipment and depends on glo- Based on recent trends of Chinese exports If China (and/or Russia) were to stop exports obtain the full picture of which raw materi- balized supply chains. Military equipment for and in compliance with the evolving strategic to the U.S. and its allies for a prolonged pe- als and components for which weapon sys- the modern battlefield includes communica- priorities of China, it becomes obvious that riod – similar to China’s rare earth embargo tems are provided by which companies and tions technologies, robotics and computer China will cease to export rare earth mate- in 2010 – an extended supply disruption could which mines, processors and suppliers they systems. Military technology will continue rials and actually become a net importer of cause significant shocks for the NATO allies. depend. This would allow to assess existing to change rapidly and will be increasingly these materials within the next few years36. and future procurement risks along the long 34 shared with NATO members and partners . The United States Geological Society esti- Although other countries like France, Es- and complex value-added chains. However, Defense supply chains are therefore less dis- mates that China controls only 60% of the tonia, and Japan also have some rare earth this knowledge is still lacking. tinct from those in the broader economy, and rare earth minerals distributed around the deposits, much of their production is sent to the dual-use nature of a broad range of assets planet. Therefore, the rest of the world has China as concentrates for refining. For NATO, the EU and other nations, long- means that many supply chains are more in- some options at its disposal, including the term cooperation between industry and poli- ternational than ever. Moreover, “higher risk exploitation of rare earth oxide mines in the In Europe, the situation is as worrying as it tics within the nations and at a European and of and uncertainty about supply disruptions U.S., Australia and Canada. But even with al- is in the U.S. The European Union is entirely transatlantic level would be desirable. The owing to the fragmentation of global supply ternate sources of elements, the supply chain dependent on imports of rare earth supplies, US, the EU and Japan could intensify their 35 chains can further threaten assured access required to convert these materials into us- most of them coming from China. For many ongoing commodity dialogues and expand the to critical minerals. Much of today’s defence able material is currently non-existent out- raw materials, the EU is absent from the security and armament policy dimensions. equipment is purchased directly from civilian side China. This lack remains a main issue upstream steps of the value chain. To access So far, little attention has been paid to the vendors and designed to meet both civilian for producing for example future NATO weap- these raw materials, the EU member-states American-Japanese commodity dialogues and military needs. Since these civilian tech- ons system (e.g. the next generation preci- have no other choice than to import the con- between politics, economics and science. nologies are also used in the military sec- sion-guided munitions that can be carried centrates or the refined materials from other Australia as a country with a still function- countries to feed their industries and markets. ing rare earth production should be included. 32 Van Exter, P., Bosch, S., Schipper, B., Sorecher, B., Kleijn, R. “Metal Demand for Renewable Electricity Generation in the Netherlands: Navigating a Complex Supply Chain” Metabolic, Universität Leiden, Copper (2018). The aim of this dialogue format should con- 33 Antoine Monnet, Amar Ait Abderrahim “Report on major trends affecting future demand for critical raw materials” (2018). In this context it can be asked what possible sider developing rare earth deposits outside 34 Parthemore, Christine, “Elements of Security: Mitigating the Risks of U.S Dependence on Critical Minerals” Center for New American solutions are available for the U.S., Europe of China, to keep them alive, and to bring Security (June 2011). 35 Ibid. and other western countries. Finding suppli- at least some of the value chain back to the 36 “Impact of Scarcity of Materials on Military Structural, Mechanical, Propulsion and Power Systems” (NATO Science and Technology ers other than China is essential, and in real- Western allied nations. Organization 2017). ity alternatives do exist, although the price of 37 LtC Francesco Esposito. Precision-guided Munitions of the Future and the Related Challenges to NATO. Joint Air Power Competence Center’s Publications (2019). rare earth from China is less expensive. Rare This means that e.g. the EU should classify

36 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 37 this market as being of high strategic impor- with known rare earth reserves. Another ef- rently economically or systematically developed and increased technological efforts. tance and re-position itself with a coherent, fort might be to seek alternative methods to to make an impact on cobalt supply up to 2030. inter-ministerial raw materials and industrial extract rare earth elements. For example, Despite this tendency, recycled cobalt from used REFERENCES: 38 strategy . In Germany, the so-called “Rohst- the U.S and other countries might invest in batteries will be a significant source of cobalt in 1. Adams Intelligence. Rare Earth Elements: 39 offallianz” was already trying to set up a and promote the research and development the long term, potentially matching 70 percent Markets Issues and Outlook Q2 (July 2019) purely private industrial consortium of leading of cost effective methods of recycling. More of primary supply by 203040. German companies to jointly buy raw mate- than 80% of rare earth materials could be 2. Australian Government/Geoscience Aus- rials on the world markets. This commodity recycled by, better handling of the manufac- Critical metals have many applications besides tralia. Critical minerals in Australia: A Review alliance was founded following the last high turing and recycling of products. Today all solar and wind energy. Neodymium and pra- of Opportunities and Research Needs (2018) price phase in 2011/12, but ended in 2015. The lead-acid car batteries must be returned to seodymium are crucial components in electric participating companies were no longer inter- recycling centers to remove the lead, and it is vehicle technology. The next critical question 3. Beatty, D et al. Cobalt Criticality and Availa- ested, because the prices for rare earths and possible to use those same centers to recover will be which metals will experience strong bility in the Wake of Increased Electric Vehicle other raw materials declined and the German other critical materials for recycling, includ- increases in demand. The answer remains Demand: A Short-Term Scenario Analysis. The government had not supported the project ing magnets from electric vehicles’ motors. far from clear, for the ways in which metal de- Minerals, Metals & Materials Series (2019) from the onset - a missed opportunity to better mand will increase depend on both inter-tech- position Germany as an attractive industrial CONCLUSIONS AND OPEN QUESTIONS nology choices, such as the balance between 4. Biello, D. “Rare Earths: Elemental Needs location in case of future raw material crises. wind and solar power, and intra-technology of the Clean-Energy Economy,” Scientific The first step in addressing the issue of critical choices, such as the balance between onshore American (13 October 2010) materials for sustainable energy applications is With so much at stake, it is imperative that the and offshore wind. Another unsolved question to examine resource scarcity from the perspec- 5. Basov, V. The Chinese Scramble to mine western nations develop methods to acquire a is future choice between different types of so- tives of both supply and demand. Increasing Africa (2015).bij http://www.mining.com/fea- secure, long-lasting source of rare earth ele- lar PV cells, and the extent to which vehicles worldwide adoption of renewable energy tech- ture-chinas-scramble-for-africa ments. A further option is to substitute criti- become fully electric and what types of batter- nologies and growing electrification of transport cal minerals of unreliable supply with easier ies will dominate in industrial production. will require one to two orders of magnitude larg- 6. Christmann, P. Rare Earth metals: it’s the to find materials, and recycling, in which even er and more complex systems than presently value chain that is at stake, not just the sup- products like cellphones and iPods can yield exist in order to generate, store, and distribute Other triggers for alarm are high dependency ply chain. Paris Innovation Review 2013 small quantities of rare earth elements. this energy. However, these new technologies levels coupled with strongly concentrated re- are dependent on various metals, including serves and actual production in certain coun- 7. Clerens, Patrick. “Storage is the backbone Other countries relying heavily on rare earth lithium and cobalt. Availability of other metals tries. The raw materials identified as critical of the energy transition”. EASE newsletter elements, such as Japan and South-Korea are (e.g. silver) is deemed even more critical, but for have changed according to the demand and (30 August 2019) scrambling to secure future supplies. Japan, cobalt the researchers find that with assump- supply structure of the industries. One possible as a huge manufacturing hub of high technol- tions of a global clean energy transformation, solution is to mitigate future supply shortages 8. Grand View Research. Rare Earth Ele- ments Market: Market Analysis. 2018 ogy equipment, has been carefully monitoring cumulative demand for cobalt for period until and technological bottlenecks is to create a the rare earth industry and trying to come up 2050 can exceed known global resources by European value chain for rare earth elements. 9. Esposito, F (LTC ITA). Precision-Guided with solutions to protect its own needs. Japan almost 200 percent. Understanding cobalt criti- However, this is associated with a considerable Munitions of the Future and the Related Chal- should strengthen its relationships with cur- cality and availability is necessary as lithium-ion risk as a result of Chinese dominance because rent supply countries and also pursue new China could use its market power and strong lenges to NATO. Joint Air Power Competence battery demand is projected to increase expo- Center’s Publications (2019) frontiers. Efforts are underway to extract ele- nentially throughout the next decade. Due to the government protection to outcompete any Eu- ments from lower quality resources. Lithium, ropean value chain that is able to compete with projected increase in demand over the coming 10. European Commission. Communication along with materials such as vanadium and the state controlled Chinese cluster. decade, lithium-ion batteries will continue to from the Commission to the European Par- uranium, is present in seawater in small con- be the largest end-use sector of cobalt. With liament, the Council, the European Economic The recent trade dispute between the U.S and centrations. Researchers have recently devel- expected lifetimes between eight and twelve and Social Committee and the Committee of oped a method for extracting these materials years and high cobalt recovery rates at end of China highlighted the dependence of the United the Regions on the 2017 list of critical raw from seawater. Japan is increasingly looking life, electric vehicles lithium-ion batteries will States on China. It was a wake-up call at the materials for the EU. (COM/2017/0490/final to secure further resources supplies from provide a significant source of secondary supply international level that concerted efforts are Australia, with focus on rare earths, to stem for cobalt. Due to relatively high recycling rates required to reduce the dependency and strate- 11. European Commission. European Union In- the dominance China has on the market. (up to 50%), recycling programs of small con- gic vulnerability on China. This is a global chal- novation Partnership on Raw Materials. 2012 sumer electronics may also play a future role lenge, impacting many geographical regions The U.S. could use Japan as a role model and in secondary cobalt supply? Short-term projec- and cutting across different industries. To solve 12. European Commission/Science for Envi- pursue joint ventures with other countries tions indicate that battery recycling is not cur- it requires international political cooperation ronment Policy. “Future Brief: Towards the bat- 38 Ibid. 40 39 Raw material alliance. Beatty, D et al. “Cobalt Criticality and Availability in the Wake of Increased Electric Vehicle Demand: A Short-Term Scenario Analysis”. The Minerals, Metals & Materials Series (2019). 38 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 39 tery of the future”. Issue 20 (September 2018) tary Structural, Mechanical, Propulsion and Power Systems (2017) Securing the industrial 13. EASE. European Market Monitor on En- 25. Nexus Media. U.S. Military Bases Using ergy Storage (March 2019). Link: www.ease- Solar, Wind &Battery Storage for Energy Se- internet of things: storage.eu/category/publications/emmes curity (17 November 2018) 14. Van Exter, P., Bosch, S., Schipper, B., 26. Olivetti, E.A, Ceder, G., Gaustad, G.G. and Policy considerations for Sorecher, B., Klejin, R. “Metal Demand for Fu, X. Lithium-Ion Battery Supply Chain Con- Renewable Electricity Generation in the siderations: Analysis of Potential Bottlenecks Netherlands: Navigating a Complex Supply in Critical Metals. Joule.1 (2), pp. 229-243. reducing cyber risks to industrial Chain” Metabolic, Universität Leiden, Copper (2018) 27. Parthermore, C. Elements of Security: 1 Mitigating the Risks of U.S. Dependence on control and safety systems 15. Hess, B. Critical Defense Minerals: REEs Critical Minerals. (Center for New American By Mr Óscar Recacha Ortega*, Mr Vytautas Butrimas** (NATO Association of Canada 2015). http://na- Security 2011) toassociation.ca/critical-defence-minerals-rees/ 28. Ross, Nick. The cobalt boom: recharging ABSTRACT strengthen these critical systems from threats 16. Johnson, K., Groll, E. China Raises Threat trouble in the Congo. Foreign Brief (10 Sep- emanating from cyberspace. of Rare-Earths Cutoff to U.S. Foreign Policy tember 2017) his report explores ways through which (21 May 2019) we can reduce the likelihood of cyber- 29. Seaman, J. Rare Earth and China: A Re- attacks against control systems used KEYWORDS 17. Karlsruhe Institut für Technologie. „Sce- view of Changing Criticality in the New Econ- to monitor and manage our critical in- cybersecurity, cyber-attack, industrial con- nario 2050:Lithium and cobalt might not omy (Policy Center for the New South/Center Tfrastructure such as in the energy sector. The suffice:With the increased significance of trol systems (ICS), critical infrastructure, for Asian Studies 2019) main purpose is to convey the need to raise lithium-ion batteries, the pressure on the industry, Industrial Internet of Things (IIoT), awareness on the importance of securing our availability of relevant resources rises“ Sci- 30. Sprecher, B. When materials become intelligent electronic device (IED) and SCADA. control systems, to review the technologically ence Daily, 14 March 2018. critical: lessons from the 2010 rare earth cri- based vulnerabilities by taking a look back into sis. (Leiden University 2016). 1. INTRODUCTION 18. King, Hobart.M REE- Rare Earth Ele- recent history, and to give policy makers and ments and their Uses (2018). Biju https://ge- 31. Swedish Agency for Growth Policy Analy- security practitioners recommendations to Technology has entered in almost every as- ology.com/articles/rare-earth-elements sis. Innovation-critical metals &minerals from extraction to final product – how can the 19. Kulak, J. Under deem Radar. Die strategist state support their development” (2017). Bedeutung Seltener Erden für die wirtschaftli- By Mr Óscar Recacha Ortega, and che und militärische Sicherheit des Westens. 32. U.S Department of Energy. Critical Mate- Mr Vytautas Butrimas, NATO ENSEC COE (Bundesakademie für Sicherheitspolitik, Ar- rials Summary Strategy. 2010 beitspapier Sicherheitspolitik No 12/2019) 33. Weber, A.Z, Mench, M.M, Meyers, J.P., Mr Oscar Recacha Ortega studied at Campus Universitario Duques de Soria (Universidad de Valladolid) in Spain and 20. Lusty, P& Gunn, A. Global Mineral Re- Ross, P.N, Gostick, J.T. and Liu, Q. Redox flow in 2018 was an intern at NATO Energy Security Center of source Security (2014). batteries: a review. Journal of Applied Elec- Excellence. trochemistry. 41 (10), pp.1137-1164. 21. McKinsey/Bloomberg New Energy Fi- Mr Vytautas Butrimas is a cybersecurity consultant who nance. An Integrated Perspective on the Fu- 34. World Bank. The Growing Role of Miner- has worked from 2016 until January 2020 as Cybersecurity ture Mobility (2016) als and Metals for a Low Carbon Future. 2017 Subject Matter Expert for the NATO Energy Security Center of Excellence in Vilnius. He has contributed to various reports on cybersecurity and critical infrastructure 22. Monnet, A., Ait Abderrahim, A. Report 35. World Trade Organization (WTO). DS509: (for OSCE, EU ENISA, IEA, NATO and other international organizations), published articles and have been an on major trends affecting future demand for China – Duties and Other Measures concerning invited speaker at various conferences and trainings on Cyber Security and defence policy issues. In 2019, he critical raw materials. (Horizon 2020 Pro- the Exportation of Certain Raw Materials (2019). completed a cyber risk study of the NATO Central Europe Pipeline System. gramme Project SCRREEN 2018) 36. Wind Europe. Research and Innovation

23. Nassar, N.T. Limitations to elemental sub- Needed to Provide Substitutes for Rare Materials * Intern in 2018 at NATO Energy Security Centre of Excellence, Institution, Šilo g. 5A, LT-10322 Vilnius, Lithuania stitution as exemplified by the platinum-group Used in Turbines (2018). www.windeurope.org ** NATO Energy Security Centre of Excellence, Institution, Šilo g. 5A, LT-10322 Vilnius, Lithuania metals. Green Chemistry 17, 2226-2235 (2015) E-mails: [email protected]; [email protected] 37. Yufeng Chen and Biao Zheng “What Happens 24. NATO Science and Technology organiza- 1 This is a product of the NATO Energy Security Centre of Excellence (NATO ENSEC COE). It is produced for NATO, NATO member coun- after the Rare Earth Crisis: A Systematic Litera- tries, NATO partners, related private and public institutions. It does not represent the opinions or policies of NATO. Views expressed in tion. Impact of Scarcity of Materials on Mili- ture Review”. Sustainability 2019, 11, 1288. this article are those of the authors and do not represent the official view of any institution they are associated with.

40 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 41 pect of our lives. Its constant development these devices via Internet and/or over closed us. With every innovation, potential vulner- awareness on the importance of securing our has simplified and added powerful enablers internal networks allows for remote man- abilities also come along. The omnipresent systems, to state the present vulnerabilities to the way we live. It is time-saving and cost- agement and control of an activity or process. connectivity amongst devices nowadays is a and to give policy makers and security prac- effective, and it has provided us with the If one such device, such as a surveillance double-edge sword that presents a serious titioners recommendations to strengthen the capacity of instant communication, tearing camera or a smart home thermostat carries quandary: if you can use the new Information stated vulnerabilities in the future. down the distance barriers that seemed in- data to the owner’s smart phone over the In- Technology (IT) and communication tech- surmountable before. The evolution of PCs ternet, we call this device part of the Inter- nologies to remotely monitor and manage an 2. WHAT IS CRITICAL INFRASTRUCTURE into intelligent small devices in conjunction net of Things (IoT). To be more specific ‘IoT industrial or process control system used to AND WHAT ARE THE SECURITY with the expansion of the Internet, is ush- is a distributed network system that typically produce and distribute electricity, so can an CHALLENGES? ering in a world where ubiquitous comput- employs the internet/cloud for some aspect adversary. ing is becoming a reality.2 In ‘Click Here to of its communication and usually includes Critical infrastructure (CI) refers to both Kill Everyone,’ Bruce Schneier says, ‘We no sensors/control systems, a storage compo- Since new information and communications physical and cyber-based systems (along longer have things with computers embed- nent, a compute component, a user-interface technologies have become the foundation with their assets) that are so vital and es- ded in them. We have things with computers component, and possibly gateways.’7 Outside that supports commerce and our daily ac- sential that the disruption, incapacity, or de- attached to them.’3 A good example of this of the consumer sector, these devices have tivities, the potential consequences of a ma- struction of such systems would have a de- is the automobile. Depending on the model, similar but more serious functions in terms liciously motivated and/or unintentional al- bilitating impact on the state’s health, safety, they can have from 30-50 processers embed- of supporting an industrial process and safe- teration, not to mention a successful attack security, economic well-being, or any combi- ded in its systems, permitting them to control ty. For example, if a sensor on a gas pipeline against it, can result in physical damage to nation thereof.10 Attacks on CI target Industri- their steering, braking, and throttle control.4 sends information about flow rates or pres- property, environment, and loss of life. There- al Control Systems (ICSs). ICS is a collective sure to a control centre remotely monitor- fore, Safety and Cybersecurity are important term used to describe the integration of both The so-called Industry 4.0 - considered to be ing and controlling fuel flows over a wide factors of concern as these technologies are hardware and software with network connec- the 4th Industrial Revolution5 - is changing the geographic area, we can refer to this device further developed and applied. tivity that allows us to remotely monitor and way humans live.6 Autonomous machines are as part of the Industrial Internet of Things control sensitive processes characteristics of now communicating with other machines. (IIoT). IIoT is what makes connectivity pos- When we think about the worst-case sce- critical infrastructure. Were attackers to find Thus, humans no longer need to do all the sible for the remote management and con- narios that could possibly take place, it turns and exploit existing vulnerabilities in the ICS, work manually on site. This has both good trol of industrial operations such as in power out that the bulk of them involve indus- the operation of CI could be severely degrad- and bad sides. On the one hand, there is im- generation and oil refining found in complex trial systems. In the ‘Industrial Internet of ed or completely disrupted, resulting in dam- proved efficiency and lower costs; on the oth- and geographically distributed environments. Things Volume G4: Security Framework,’ it age to property and even loss of life. er hand, fewer humans are in direct control However, the application of these connected is stated that ‘A successful attack on an IIoT of the process, which makes it more neces- devices interacting with each other over wide system has the potential to be as serious as Having briefly described the technical parts sary to have faith that the machines will have areas raises reliability and safety issues. As the worst industrial accidents to date (e.g. of an industrial control system, it is impor- the sufficient embedded intelligence to work opposed to consumer IoT, IIoT’s security, la- Chernobyl and Bhopal), resulting in damage tant to understand some of the cybersecurity properly and safely without constant human tency, and applications issues make cloud to the environment, injury or loss of human challenges. There are three main concerns intervention. use (over the Internet) more difficult to inte- life.’9 And the IIoT encompasses a myriad of in defending a critical control system from a grate and less practical due to the complexi- critical industries such as: nuclear, chemi- cyber-attack: A key new enabling component is the Intel- ties of the manufacturing or industrial envi- cal, manufacturing, energy, oil and gas, wa- ligent Electronic Device (IED) which is more ronment.8 ter and wastewater, to name but a few. Hence First, we have to understand that the addi- frequently found in various applications and the urgent need for implementing an effec- tion of cyber threats to ICS is something rela- environments from the home and small of- But we should not be blind about the nu- tive industry-specific policy framework upon tively new. It was not present at such a scale fice to manufacturing. The interconnection of merous benefits that high tech has given to which all the security measures must be har- some twenty years ago when many of these monised. systems were designed and put into the field.

2 Kagermann, H., Whalster, W., and Helbig J. “Securing the future of the German manufacturing industry: Recommendations for im- Since the threat of a cyber-attack from the plementing the strategic initiative INDUSTRIE 4.0. Final report of the Industrie 4.0 Working Group,” trans. Joaquín Blanco and Helen This report will explore ways to reduce the outside - from cyberspace - was not a major Galloway. April, 2013: 15. http://alvarestech.com/temp/tcn/CyberPhysicalSystems-Industrial4-0.pdf. Accessed July 24, 2018. likelihood of cyberattacks against control sys- security concern, designers and operators 3 Schneier, B. “Click Here to Kill Everyone.” New York Magazine. January 27, 2017. http://nymag.com/selectall/2017/01/the-internet-of- things-dangerous-future-bruce-schneier.html. Accessed July 24, 2018. tems used to monitor and manage our criti- rarely considered the fact that all these de- 4 Mertl, S. “How cars have become rolling computers.” The Globe and Mail. May 16, 2018. https://www.theglobeandmail.com/globe- cal infrastructure. This will be done by raising vices will be increasingly remotely accessi- drive/how-cars-have-become-rolling-computers/article29008154/. Accessed July 30, 2018. 5 Also known as the Industrial Internet of Things (IIoT) discussed later in this article. 9 Schrecker, S., et all. “Industrial Internet of Things Volume G4: Security Framework” Industrial Internet CONSORTIUM. September 19, 6 Marr, B. “Why Everyone Must Get Ready For The 4th Industrial Revolution.” Forbes. April 5, 2016. https://www.forbes.com/sites/ber- 2016: 16. https://www.iiconsortium.org/pdf/IIC_PUB_G4_V1.00_PB.pdf. Accessed July 24, 2018. nardmarr/2016/04/05/why-everyone-must-get-ready-for-4th-industrial-revolution/#29334d5f3f90. Accessed July 19, 2018. 10 Radvanosky, R., and Brodsky, J. “Handbook of SCADA Control System Security.” CRC Press. May 10, 2016: 3 - 5. 7 Wong, W. “What’s the Difference Between Consumer and Industrial IoT?” Electronic Design. September 21, 2016. https://universalflowuniversity.com/Books/Computer%20Programming/Software%20Security%20and%20Privacy/Handbook%20 https://www.electronicdesign.com/iot/what-s-difference-between-consumer-and-industrial-iot. Accessed August 1, 2018. of%20SCADA%20Control%20Systems%20Security.pdf. Accessed August 1, 2018. 8 Ibid.

42 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 43 ble and subject to external attacks one day.11 security in an industrial environment since physical damage to an industrial process.17 Furthermore, leaving aside the problems of there have been few reported incidents and It was most significant in that instead of at- maintenance, improvement, or management things seem to be working just fine. Thus, tacking an office computer or server, it tar- that these devices present, we should re- vulnerabilities are present that an actor can geted an industrial control system which suc- mind that these IED’s, were designed to reli- exploit that would not normally be present ceeded in taking away the view and control of ably perform a simple task and do it reliably in an IT environment office where the cyber a critical process from the operator. For the in manufacturing or outdoor environments threat has long been understood and steps first time a doubt was introduced for opera- for many years without frequent replace- taken to address them. tors of critical infrastructure: ‘can we trust ment. For this reason, their technical powers what our engineering systems are doing and are limited in comparison to the computing Secondly, one of the primary characteristics Figure 1. Protecting critical infrastructure is not just telling us?’ power found in an office PC. For example, of industrial systems today is their extensive about protecting the enterprises IT assets in the office one device used to monitor control processes connectivity. The current trend towards in- or “SCADA”. Industrial control systems (ICS) and IED’s Even though no one has publicly admitted to in a pipeline has about the same computing creasingly autonomous devices with added (PLC’s, Relays and Switches) are found closest to the the Stuxnet operation, the creation, excep- power as a notebook pc purchased in 1992. It computing power and communications capa- physical process. Shown with permission of Bob Rad- tional flawless development, and subsequent vanovsky http://icsmodel.infracritical.com/ has a 32Mhz CPU and 4 megabytes of RAM.12 bility brings a new challenge —making sure launching of Stuxnet is widely attributed by It also uses an insecure decades old com- the ability to remotely monitor and control some analysts to governments seeking to munication protocol (Modbus) where anyone a system is secured. If you lose the ability substations. The company did a simple net- ‘derail or at least, delay the Iranian nuclear can learn how to use by downloading the field to communicate with all the devices work- work scan to see what was on the network program.’18 technicians’ user manual from the Internet.13 ing in the system there will be trouble. This and knocked out all the relays which needed A simple anti-virus scan, for example, could is exactly the situation that developed in the to be reset by hand (several hundred of them) Although no official numbers have been re- consume the available computing resources December 2015 cyber-attack on control sys- in order to get the control back and restore leased, it is estimated that Stuxnet destroyed of this and other IEDs and degrade or even tems of three power distribution companies normal operations.16 over 984 enriching centrifuges, resulting in a deny its functions. For example it could slow in Ukraine which resulted in a quarter of a loss of 30% of production.19 Stuxnet opened down the device’s communication of criti- million people being deprived of electricity 3. EXAMPLES OF CYBER-RELATED Pandora’s box for a new type of war beyond 15 cal data to a control station. There are many in the wintertime. This will be further dis- ATTACKS AND INCIDENTS ON CRITICAL anybody’s imagination at the time - cyber IED’s (sensors, actuators, PLSC’s and drives) cussed later. warfare.20 The success of this novel kind of INFRASTRUCTURE that are used to remotely monitor and control high tech and intelligence operation which the movement of trains on a railway line or The last and perhaps most important chal- In this part, we will discuss the principal used cyber means to achieve a physical re- fuel in a pipeline of several hundred kilome- lenge is addressing the lack of understand- sources of concern that are illustrated in a sult and the lack of international reaction and tres in length. A sensor based alarm about ing on what really needs to be protected and few selected cybersecurity cases: Stuxnet, prosecution were surely noticed and conclu- a train approaching on a track or a sudden from what kind of cyber threats. It is not fully Ukrainian ICS, and Trisis. sions made by the cyber institutions of other increase in pressure on a pipe, if delayed, appreciated that an exhaustive and thorough states. For example, after Stuxnet the hack- can result in serious consequences. A good evaluation of operational risk is essential in A) Stuxnet ing community took notice and courses and example is an unresponsive gasoline pipeline order to determine what critical assets and First made public in 2010, this malware is workshops on attacking SCADA systems control system (SCADA) which contributed processes need to be protected. What is im- considered to be one of the first publicly soon appeared at hacker conferences such 21 to an explosion of the Bellingham pipeline in portant is that if a contract is won to secure known cyber-weapon’s developed and deliv- as BlackHat. 14 1999 . a critical industrial operation, the company ered to its target by a state. For the first time needs to have the expertise in the opera- ever, a malware was capable of expanding B) Ukrainian ICS While new and more capable devices are tional technology employed by the customer. beyond the digital layer, causing real-world Having been targeted multiple times since available, the implementation costs could be For example, an IT company that was used to cost-prohibitive for an enterprise to replace auditing data centers was invited by an elec- 16 Weiss, J. “Are the Good Guys as Dangerous as the Bad Guys – an Almost Catastrophic Failure of the Transmission Grid.” CONTROL. them all at once. It can be hard for a security tric power company to test their control net- November 2, 2017. https://www.controlglobal.com/blogs/unfettered/are-the-good-guys-as-dangerous-as-the-bad-guys-an-almost- practitioner to justify spending to upgrade works that are used to monitor and control catastrophic-failure-of-the-transmission-grid/. Accessed on August 17, 2018. 17 Zetter, K. “An unprecedented look at Stuxnet, the world’s first digital weapon.” Wired. November 3, 2014. https://www.wired. com/2014/11/countdown-to-zero-day-stuxnet/. Accessed August, 2018. 11 Schrecker et all. “Industrial Internet of Things Volume G4: Security Framework,” 16. 18 Fruhlinger, J. “What is Stuxnet, who created it and how does it work?” CSO. August 22, 2017. https://www.csoonline.com/arti- 12 SCADAPack 4203, Schneider Electric Brochure http://download.schneider-electric.com/files?p_enDocType=Brochure&p_File_Name=SE- cle/3218104/malware/what-is-stuxnet-who-created-it-and-how-does-it-work.html. Accessed August 1, 2018. DataSheets-SCADAPack4203-A4-TBU-v24.pdf&p_Doc_Ref=SCADAPack+4203+Datasheet+%E2%80%93+A4. Accessed August 16, 2018. 19 Holloway, M. “Stuxnet Worm Attack on Iranian Nuclear Facilities.” Stanford University. July 16, 2015. http://large.stanford.edu/cours- 13 Chipkin, P.“Modbus for Field Technicians.” Chipkin Automation Systems. 2010 http://www.chipkin.com/files/liz/ es/2015/ph241/holloway1/. Accessed August 1, 2018. MODBUS_2010Nov12.pdf. Accessed August 16, 2018. 20 Ivezic, M. “Stuxnet: the father of cyber-kinetic weapons.” CSO. January 22, 2018. https://www.csoonline.com/article/3250248/cyber- 14 Determines Probable Cause Of Pipeline Rupture in Bellingham, Washington, NTSB 10/8/2002 News Release https://www.ntsb.gov/news/ warfare/stuxnet-the-father-of-cyber-kinetic-weapons.html. Accessed August 1, 2018. press-releases/Pages/Determines_Probable_Cause_Of_Pipeline_Rupture_in_Bellingham_Washington.aspx Accessed August 20, 2018 21 Assessing and Exploiting Control Systems (Course description). https://www.blackhat.com/us-15/training/assessing-and-exploiting- 15 Lee, R., Assante, and M., Conway, T. “Analysis of the Cyber Attack on the Ukrainian Power Grid.” E-ISAC. March 18, 2016. https://ics. control-systems.html. BlackHat. Accessed August 16, 2018. sans.org/media/E-ISAC_SANS_Ukraine_DUC_5.pdf. Accessed July 23, 2018.

44 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 45 the conflict in the east of the country broke C) TRISIS/TRITON/HATMAN out in 2014, the attacks against the Ukrainian In August 2017, a cyber-attack targeted the CI that took place in 2015 and 2016 are the safety systems of an important petrochemical most notorious. Evidently, the situation of in- plant in the Middle East. Although it is believed stability and turmoil that Ukraine is currently Saudi Aramco was the victim of the attack, the undergoing, makes this troubled country the evidence is far from conclusive and it still re- ideal laboratory where an adversary can — mains officially unknown.25 The malware de- without fear of retribution— experiment and ployed has been named in different ways, such develop cyber-attacks and perhaps apply the Trisis, Triton, or HatMan depending on which results to achieve a political objective at the security expert is writing about it. same time. This is the fifth publicly known ICS-tailored In December 2015, three power companies malware, but it is the first ever to target underwent highly coordinated cyber-attacks Safety Instrumented Systems (SIS). This is an which resulted in circuit breakers at over event of significance and worth a digression. 30 substations being opened remotely while the operator watched his hijacked control The intentional attempt to compromise a screens in disbelief.22 The next part of the at- safety system represents a serious escala- tack activated previously installed malware tion of the cyber threat to critical infrastruc- which acted to ‘brick’ the serial-to-ethernet ture. Control and safety systems are used in devices used to communicate between the central control room and the substations on an industrial process to protect property and the grid. This resulted in a ‘lost SCADA’ situa- most importantly, people from serious harm tion giving the operator no choice but to send resulting from an industrial process that has technicians out in the field to restore the gone outside of set parameters. These pa- functions of the substations. In completing rameters are used to program an automatic response in the SIS to bring a system back Figure 2. The importance of Safety Instrumented Systems and consequences of their failure are illustrated in the their attacks and in order to make the work of Deep Water Horizon oil drilling platform explosion. For some reason all safety systems that could have avoided this the recovery operation more difficult, the at- to a safe state when changes in temperature, disaster failed. tackers erased the control work stations hard flow rates, pressure, frequency, or other sys- Source: https://en.wikipedia.org/wiki/Deepwater_Horizon#/media/File:Deepwater_Horizon_offshore_drilling_ drives. The attacks caused more than a quar- tem state indicators exceed pre-set levels. unit_on_fire_2010.jpg” ter of million people to go without electricity. These are the systems that automatically re- spond to open or close valves on a gas pipe- the functions of these systems, serious harm used in many industrial plants around the Ukraine suffered the second attack on its ICS line when pressures or flow rates go beyond can result if a system state exceeds set pa- world. If the perpetrators have developed nearly a year after when part of Kiev, the cap- pre-set parameters. These are the systems rameters. It is like disabling the breaks and a technique against the equipment of Sch- ital city of Ukraine, experienced a power fail- that automatically shut down a nuclear re- seat belts of an automobile traveling down a neider Electric, they can in theory apply the ure. The complexity of the malware was quite actor when something goes wrong with the highway without the knowledge of the driver. same technique in any of the plants that use impressive and it marked an advancement in monitored critical industrial processes as for Nothing immediately bad will happen to the this or similar equipment. While the cyber- capability by adversaries.23 However, it ap- example occurred at the Hatch nuclear pow- driver of the car but if there was a sudden attack was directed at a specific version of pears that the attackers restrained them- er station in 2008 when a software upgrade need to stop or turn the steering wheel the the device and software, the potential escala- selves, for according to one commentator was interpreted by the SIS as an adverse consequences could be most serious. In oth- tion for disruption of Trisis is unsettling.27 they clearly could have caused more harm.24 event (lack of data on the reactor cooling sys- er words, safety systems are the last line of Perhaps it was just more an experimentation tem) causing the shutdown of the reactor.26 If defence provided by automated technologies Trisis/HatMan had in many ways a ‘game- and testing? something is done to intentionally neutralize to save us from having to deal with something changing’ impact for the future cybersecurity ‘going boom in the night.’ of ICS. The fact that it specifically goes after 22 “Watch How Hackers Took Over a Ukrainian Power Station.” filmed December 2015, video, 1:27. https://www.youtube.com/ the last line of defence tells us that adversar- watch?v=8ThgK1WXUgk. Accessed August 17, 2018. 23 Dragos. “CRASHOVERRIDE Analysis of the Threat to Electric Grid Operations.” Dragos. June 12, 2017. https://dragos.com/blog/cra- What is of most concern is that this attack al- ies are growing not only wiser but are will- shoverride/CrashOverride-01.pdf. Accessed July 24, 2018. most succeeded in fully compromising safety ing to overlook the physical consequences of 24 Zetter, K. “Everything we know about Ukraine’s power plant hack,” Wired. January 20, 2016. https://www.wired.com/2016/01/every- instrumented systems made by Schneider their acts. For this reason, HatMan should be thing-we-know-about-ukraines-power-plant-hack/. Accessed July 24, 2018. 25 Groll, E. “Cyberattack Targets Safety System at Saudi Aramco.” Foreign Policy. December 21, 2017, https://foreignpolicy. Electric’s. These and similar SIS devices are taken as major wake-up-call for the need to com/2017/12/21/cyber-attack-targets-safety-system-at-saudi-aramco. Accessed July 18, 2018. 26 Krebs, B. “Cyber Incident Blamed for Nuclear Power Plant Shutdown.” Washington Post. June 5, 2008, http://www.washingtonpost. 27 Perlroth, N. and Krauss, C. “A Cyberattack in Saudi Arabia Had a Deadly Goal. Experts Fear Another Try.” New York Times. March com/wp-dyn/content/article/2008/06/05/AR2008060501958.html Accessed August 16, 2018. 15, 2018. https://www.nytimes.com/2018/03/15/technology/saudi-arabia-hacks-cyberattacks.html. Accessed July 15, 2018.

46 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 47 defend against and manage this destabilising ed from the Internet is not sustainable. There is important to remember the words of Andy the risks, if it is not done comprehensively the behaviour in cyberspace.28 is always an ‘open window’ or ‘unlocked door’ Bochman: results may be disappointing when an unfore- to cyberspace that will be missed. seen incident takes place that was never con- 4. SHEDDING SOME LIGHT ON CYBERSE- ‘Here’s the brutal truth: It doesn’t matter sidered. For example, if the main threat is de- CURITY MYTHS AND MISCONCEPTIONS Myth Nr. 2: Industrial Control Systems are how much your organization spends on the termined to be from cybercrime the measures engineered to be safe and cannot be inten- latest cybersecurity hardware, software, taken to defend against on-line crime will fall What do these case examples tell us about tionally harmed training, and staff or whether it has seg- short in defending against a state resourced the problem of protecting ICSs from cyber- regated its most essential systems from and executed cyber-attack. The determination The belief that ICS is protected from external attacks and incidents? the rest. If your mission-critical systems of risk is challenging. Think of the story of the threats by being built according to high en- are digital and connected in some form or ‘Three Little Pigs’. In the end, only one of them gineering standards and have safety systems Myth Nr. 1: ‘We are safe, our critical systems fashion to the internet (even if you think judged the threat correctly (possibility of an to protect them against catastrophic failure is are not connected to the Internet’ they aren’t, it’s highly likely they are), they attack from a wolf) and took the appropriate simply not true. The manipulation of the laws can never be made fully safe.’34 protective measures to secure the chosen as- The belief that no one would ever notice your of physics also need to be considered. system or try to attack it because it is too set (the house) by building with bricks. Keeping the above in mind here are some technically difficult or because it is isolated The Idaho National Laboratory (INL) in the recommendations: This effort at risk analysis will allow for the de- is false. In 2014, two ICS engineers decided United States in a 2007 experiment called velopment of a contingency plan that ‘allows to test the assertion that there are no criti- ‘Aurora’, executed a deliberate remote cyber- To develop a plan for implementing cyber- for the safe operation or shutdown of opera- cal infrastructure devices that are visible on attack on a diesel generator used in power 29 security practices tional processes in the event of ICS compro- the Internet in a test called ‘Project Shine’. plants to demonstrate if a cyber-attack could mise. These plans should include the assump- They added engineering search terms to the wreck large rotating equipment. The test Within the enterprise, the first step in cyber- tion that the ICS is actively working counter to search engine ‘Shodan’ and the results were demonstrated that rapidly disconnecting and security for any organization is to perform a the safe operation of the process.’36 surprising. According to one of the research- reconnecting a generator to the grid, but out risk assessment and impact analysis of their ers, ‘The sheer number of devices exposed of phase - via physical or cyber intrusion of operations. The result of this work should Another advantage in taking the time to an- and the wide geographic area these devices control systems conducted maliciously or un- clearly indicate which critical assets need to 30 swer the three questions is that the security were located in was staggering.’ As dem- intentionally - could have serious effects on be protected and from what cyber threats. practitioner will be fully prepared to provide onstrated in this project, the hard-fact is sig- systems operations including physical dam- Once this information is available then it clear and comprehensive answers to man- nificantly different. The operators sometimes age.33 It must be remembered that the Aurora should be possible to answer the last ques- agement on why a security measure needs to are not aware that they have devices on the vulnerability is neither a ‘virus’ nor a ‘design tion in the risk analysis - how to protect cho- be funded and implemented. A useful tool to network that are indeed visible from the In- flaw’, but comes from the laws of physics sen assets from the identified threats in the apply when funding requests have to compete ternet. They may forget to close a temporary that if manipulated intentionally will result in most cost-effective way.35 with the requests coming from other parts of connection or allow a remote connection to physical damage. the enterprise. a vendor who has a compromised computer. Resources for security are scarce, especially Some enthusiastic Industry 4.0/Industrial In- 5. POLICY CONSIDERATIONS FOR in the private sector where allocations for se- ternet of Things31 vendors offer cost savings When developing something new include REDUCING CYBER RISKS TO INDUSTRIAL curity or other kind of improvement need to be and efficiencies by providing a solution which security in the design process from day one CONTROL AND SAFETY SYSTEMS approved by management who in turn need to integrates office, control system, and safety answer to the stockholders. It is hard to get Ensuring security by keeping the design and/ 32 instrumented systems. Problem is if one There are lessons learned based on meas- approval for financing measures to improve or implementation method a secret is called has a link to the Internet, both the control and ures to improve the safety and reliability of cybersecurity when things seem to be run- security through obscurity (STO).37 The appli- safety systems are put at risk. Thinking that control systems in the context of today’s dy- ning just fine. On the other hand, even if one cable counter-measure ought to be security you are safe if your critical systems are isolat- namic cyberspace environment. However, it does appreciate the importance of assessing by design that is, the application of security

28 Dragos. “TRISIS Malware. Analysis of Safety System Targeted Malware.” Dragos. December 13, 2017. https://dragos.com/blog/tri- sis/TRISIS-01.pdf. Accessed August 1, 2018. 34 Bochman, A. “Internet Security.” Harvard Business Review. April 27, 2018 http://alertlogic.qa.hbr.org/2018/04/internet-insecurity. 29 Rashid, F. “Project SHINE Reveals Magnitude of Internet connected Critical Control Systems.” Security Week. October 6, 2014, htt- Accessed on August 16, 2018. ps://www.securityweek.com/project-shine-reveals-magnitude-internet-connected-critical-control-systems. Accessed July 17, 2018. 35 Butrimas, V. “In seeking to protect industrial control systems are we clear about what is being threatened and from what threats?” 30 Ibid. SCADASEC MAGAZINE. November 8, 2016. http://scadamag.infracritical.com/index.php/2016/11/08/in-seeking-to-protect-industrial- 31 List of IIoT benefits by a major ICS vendor can be found here: https://www.uruman.org/sites/default/files/articulos_congreso_10/ control-systems-are-we-clear-about-what-is-being-threatened-and-from-what-threats/. Accessed July 28, 2018. iiot_-_industrial_internet_of_things_by_honeywell.pdf. Accessed July 31,2018. 36 ICS-CERT. “Cyber-Attack Against Ukrainian Critical Infrastructure,” February 25, 2016. Homeland Security. https://ics-cert.us-cert. 32 Integrated Control and Safety, Siemens: https://www.industry.siemens.com/topics/global/en/safety-integrated/process-safety/ gov/alerts/IR-ALERT-H-16-056-01. Accessed July 26, 2018. safety-integrated-systems/integrated-control-safety/pages/default.aspx. Accessed August 1, 2018. 37 “Security through obscurity (STO) is a process of implementing security within a system by enforcing secrecy and confidentiality of 33 Swearingen, M. et all. “What You Need to Know (and Don’t) About the AURORA Vulnerability.” POWER. September 1, 2013. http:// the system’s internal design architecture. Security through obscurity aims to secure a system by deliberately hiding or concealing its www.powermag.com/what-you-need-to-know-and-dont-about-the-aurora-vulnerability/ Accessed July 31, 2018. security flaws.” https://www.techopedia.com/definition/21985/security-through-obscurity-sto. Accessed July 25, 2018.

48 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 49 measures from the very beginning rather than may, when compared to the rising security ample is Schneider Electric’s openness about Take the time to find out the cause of failure: patched on later after the system has been im- costs for adding digital technologies, be the the HatMan malware and disclosing what they it’s a great learning tool plemented or put out as a product to sell in the most cost-effective means to reduce com- knew at a recent security conference.41 To get In looking back at the question raised at the market. A good example is the Windows oper- plexity and security management overhead.40 started the customer needs to inform the ven- beginning of this article and cyber myths just ating system. It was sold throughout the world dor of the security needs and requirements discussed, it does not seem prudent to go to consumers for years before the CEO Bill The creation of an Industrial Security Op- that apply specifically to their operation. A back to business as usual after a failure in Gates wrote that famous e-mail in 2002 order- erations Centre (ISOC) good dialogue between the operator and ven- energy infrastructure. Regardless of wheth- ing his employees to make the security of its dor/service provider will do much to reduce In addition to the operators of critical in- er the outage was caused by a cyber-attack, products top priority.38 By then it was too late the likelihood of unpleasant surprises at prod- frastructure assigned with watching over technical failure, or management error the to redesign Windows from scratch. So, this is uct installation and system start time. the day-to-day operations of an industrial event should be taken as an opportunity to one of the reasons why all Windows users the process, a new section needs to be created take a long look at the security of our increas- world over spend time each month waiting for Be careful about implementing Industry 4.0 with the task of monitoring and reacting to ingly vulnerable critical infrastructures. This the latest security patch or update to install on malicious or unintentional changes in pro- The arguments for the benefits from increas- on the other hand, may not be an easy task their computing device at home or work. Put- cess flows, equipment performance, and ing digital complexity in manufacturing and for an operator of a real-time system produc- ting security into the beginning of the design data flows that go beyond expected norms. industrial environments42 as have become ing and distributing electricity or sending fuel process can be hard, as it may increase the Namely an Industrial Security Operations associated with the so called 4th Industrial down a pipeline to stop operations to conduct development cost and contribute to further Centre (ISOC). The intent would be to estab- Revolution, also known as Industry 4.0,43 are a cyber forensic investigation. Before doing delay in putting the product out to market. Not lish a monitoring capability that could detect difficult to question. However, there are some this, there are several issues that need to be a good thing to say to management and to the a malicious intrusion within 24 hours. It is concerns that need addressing when consid- considered such as safely shutting down a stockholders. However, it will lead to cost sav- not enough to look after the cybersecurity of ering going down this path. For one, it must system and making sure services continue to ings in the long run in terms of safer systems the business side of the facility; the security be understood that there are security implica- be provided to customers. and better company reputations. needs of the manufacturing plant operations tions - regardless of the perceived attractive on the plant floor also need addressing. This cost benefits and increased efficiencies - for Get the IT and Operational Technology (OT) An effort must be made to think whether a will also demand resources in personnel and increasing the level of automation by introduc- security people to work together as a team new IT feature is needed for the new equip- funding, but the benefits must be weighed ing more device self-configuration in respect ment. Will the new feature also introduce a An integrated approach to cybersecurity that against a dynamically changing cyber threat to different situations.44 The challenge to de- new exploitable vulnerability that can be used takes into consideration not only the IT priori- environment. Arguments for or against the termine whether there has been a cybersecu- in a malicious cyber-attack? If so, then safety ties of Confidentiality, Integrity, and Availabil- creation of an ISOC will come from answering rity incident will be very high when a self-con- features need to be added to the device and ity, but also the OT concerns for Safety and the three critical questions discussed above. figuring Industry 4.0 device makes a change. Reliability needs to be developed. This means instructions provided on how to best config- The question may arise: how to tell whether that the contribution of information and com- ure the device in the particular operational To start a dialogue about cybersecurity be- this change is legitimate or malicious?45 munication technology specialists who deal environment. However, the additional secu- tween the operator and vendor with cybersecurity in the office needs to be rity may also add to the cost that would make The tendency to integrate safety, control, and part of the system risk evaluation and design application of a large number of sensors for The operator of a pipeline, power genera- business networks into one network in spite process performed by control system engi- a pipeline of thousands of kilometres cost- tion and distribution facility, water utility, or of the advantages in lower overhead and sav- neers. The IT guy who may not understand prohibitive. Not all of the new functionalities any larger manufacturing enterprise needs ings is to be resisted and if implemented, what his OT colleague is doing needs to make and connectivity options offered as ‘selling to engage in a dialogue with their equipment wisely managed.46 Take some time to explore his security concerns known to the OT guy and features’ by manufacturers are needed (for vendor/service provider about security. Op- the implications of Industry 4.0 before jump- the OT guy needs to take some time to listen example adding an IP address to an aquari- erators, for example, need to ask the vendor ing into the movement and make sure that to the IT guy. A wide range of risks needs to um thermometer or thermocouple.)39 Adding about the manufacturers’ security practices: the ability to know and manage what is in be evaluated and accounted for if we are to unnecessary features that need more secu- is the customer notified when software patch- your critical systems is not diminished. avoid and defend against future failures in the rity can be costly and even cost-prohibitive. ing is performed? Are there any ‘backdoors’ Instead, a return to a simpler non-digital or placed by the manufacturer on the equipment 41 that allows outside access to it? A good ex- Kling, A. and Forney, P. “TRITON – Schneider Electric Analysis and Disclosure,” filmed January 2018 at S4 Events, video, 25:51, ‘hard-wired to the device’ analogue approach https://www.youtube.com/watch?v=f09E75bWvkk&feature=youtu.be. Accessed August 2, 2018. 42 Read “World Energy Investment 2018.” International Energy Agency. July 2018. https://www.iea.org/wei2018/. Accessed August 2, 2018. 43 Known in the United States as the Industrial Internet of Things (IIoT). 38 Gates, B. “Trustworthy Computing.” Wired. January 17,2002. 12:00 pm. https://www.wired.com/2002/01/bill-gates-trustworthy- 44 Watch “Brave New Industrie 4.0” presented by the man who analysed Stuxnet, Mr. Ralph Langner. https://www.youtube.com/ computing/. Accessed July 31, 2018. watch?v=ZrZKiy2KPCM. Accessed August 2, 2018. 39 1732E ArmorBlock Dual-Port EtherNet/IP 4-Point Thermocouple and RTD Input Modules. September, 2012. http://literature.rock- 45 Ibid. wellautomation.com/idc/groups/literature/documents/in/1732e-in005_-en-e.pdf. Accessed August 2, 2018. 46 Here is one manufacturer proposing to do just that by integrating safety systems. Selega, R. “How to remain safe and profitable 40 Brodsky, J. “Remember why ICS happened in the first place.” SCADASEC MAGAZINE. August 14, 2018 http://scadamag.infracritical. during Industry 4.0.” ABB Conversations. January 23, 2018. https://www.abb-conversations.com/2018/01/how-to-remain-safe-and- com/index.php/2018/08/14/how-ics-security-shoots-itself-in-the-foot/ Accessed August 16, 2018. profitable-during-industry-4-0/. Accessed August 2, 2018.

50 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 51 critical infrastructures our societies depend 6. CONCLUSION upon so much for their well-being. In the digital world we live in, automatization Pulling the Thread for U.S. has increasingly taken a larger and crucial Finally, the engineers trying to defend these role in industrial operations. Remotely con- systems need some help. They cannot be ex- trollable robots and machines have come to Air Force Mission Assurance pected to defend in isolation systems that are replace humans. The running of major en- targeted by a state with all its technical and terprises is now dependent upon a connected by Mr Mark A. Correll intelligence resources. It is not a fair contest. network of many devices that communicate Very similar to the kind of contest between a more and more with each other than with High School soccer team and a FIFA cham- their human managers. Since current socie- ABSTRACT: to operations and improve the resilience of pionship team. Without significant help the ties rely on services from a safe and available defense installations and surrounding areas outcome is certain that the school team will s the operating environment be- critical infrastructure, securing their control as a means to guarantee availability of En- lose. What is needed to counter the odds, comes ever more dependent on devices and safety systems is a vital part of the terprise capabilities. As the operating envi- is an international institution based upon a energy – and therefore suscepti- work to ensure the well-being of the econo- ronment becomes ever more dependent on legal framework developed by cyber knowl- ble to its interruption – the USAF my and society of a nation. Several technical A energy – and therefore susceptible to its in- edgeable politicians and diplomats working is becoming increasingly cognizant of the measures have been proposed in this report terruption – the USAF is becoming increas- together with professionals from the engi- need to better identify, assess, and mitigate that can be implemented with the help of IT ingly cognizant of the need to better identify, neering community. In questions where the these vulnerabilities to ensure mission suc- and OT security professionals and engineers. assess, and mitigate potential vulnerabilities need is recognised and where it really mat- cess under a wide range of threat and hazard Nevertheless, this effort should not just be to ensure mission success under a wide range ters, states have banded together and signed conditions. The process creates pathways to left to the technology professionals to worry of threat and hazard conditions. Through its international agreements and conventions. best integrate technologies to protect and about. The increased pervasiveness of the Mission Thread Analysis (MTA) process, the This has been especially so, for example, with enhance Enterprise readiness and lethality technologies applied combined with their in- USAF is reshaping how energy security is un- prohibiting the use of weapons of mass de- by assessing how an energy denial of service ternational dimension requires a much larger, derstood within a mission context. struction. One possible model that can be ref- may jeopardize mission success. multi-disciplined, and coordinated approach. erenced for dealing with the production and The improvement of the ICS’s security ought Through an MTA, the USAF expands the scope use of cyber weapons by nation-states is the MISSION THREAD ANALYSIS to be the product of a common effort between of how it identifies key assets that could lead International Convention on Chemical Weap- engineers, private sector, and governments. As United States Air Force (USAF) core mis- to unacceptable mission impacts in a denial ons.47 Still perhaps remembering their use sions increasingly depend on larger and of service event. This process provides lead- in World War I and in recognition of the ad- What’s more, we can be sure that past and more complex and intertwined networks, the ers with the information they need to account vances in technology that could facilitate the present attacks, being largely unanswered USAF exposure to risks from energy system for and address potential mission gaps. The use of chemical weapons and amplify their by the international security community, will interruptions also increases. A significant first key step to this analysis is decompos- potential for harm, a convention entered into serve as blueprints (even provide encour- storm or well-orchestrated physical or cy- ing the mission into core functions, tasks and force in 1997. Over 190 nations have signed it, agement as an effective, cheap and deniable ber-attack on an installation or the national capabilities, and engaging key stakeholders representing most of the world’s population. means to an end) for future malicious cyber grid could cripple an installation’s electrical from across a mission’s “kill chain”. Associated with the agreement, the Organiza- activities directed against the industrial con- system, compromising the USAF’s ability to tion for the Prohibition of Chemical Weapons trol systems that keep critical infrastructure conduct its missions. It is vital for the USAF Second, an MTA links these assets to the (OPCW) was created to monitor and report on up and running. Together, we need to work on to mitigate the threat of energy interruptions electrical grid to examine potential vulner- implementation of the Convention.48 developing systems that will be safe and reli- able and to cooperate and share information This would be a concrete proposal for one among the community of interest. This is vital confidence building measure for states to fol- by Mr Mark A. Correll in order to deal with future advanced and per- low in cyberspace. In this way, the monitoring sistent cyber threats that jeopardise the safety institution would act as a lever of soft pres- Mark A.Correll is the Deputy Assistant Secretary of the Air Force for Environ- and availability of critical infrastructure we all sure on states putting them in the spotlight of ment, Safety and Infrastructure, Headquarters U.S. Air Force. Washington depend on for our everyday activities and lives. D.C. He provides executive leadership on all matters pertaining to formulation, world opinion as a violator of an international review and execution of plans, policies, programs and budgets for Air Force agreement which they have signed. built and natural infrastructure, environmental, safety and occupational health programs.

47 Chemical Weapons Convention. Organization for the Prohibition of Chemical Weapons. http://www.opcw.org/chemical-weapons- convention/. Accessed on August 1, 2018. 48 The Organization for the Prohibition of Chemical Weapons. https://www.opcw.org/about-opcw/ Accessed on August 1, 2018.

52 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 53 abilities from grid-level disruptions. An MTA marketplace. By implementing processes like challenges participants to realize the inter- an MTA, organizations can make smarter in- NATO’s Experience in the connected nature of their missions and how vestment decisions into technologies, pro- inherently distributed enabling systems, like cesses, and risk management approaches energy, support a variety of missions and that enhance energy security and system re- Field of Energy Efficiency functions. By breaking down functional silos silience. Understanding the USAF operates among different mission components and within a larger network of domestic and in- bringing attention to how these components ternational partners, it’s important that com- for Armed Forces are linked together at an energy level, the panies and organizations across the globe USAF can better recognize and manage risks. similarly take a step back and evaluate their by Mr Andrea Manfredini analysis approaches and policies to ensure Third, an MTA helps leaders understand po- they are aligned with the changing threats and tential compromises to mission success that hazards to mission from energy interruptions. fficially, the road to energy efficien- ciency has one of the focus points over the may be introduced through dependencies on cy in NATO began in 2012, during past seven years. At this stage, the following internal and external partners. These identi- Though the USAF is pursuing opportunities the Chicago Summit, when the Al- questions arise instinctively: how have these fied areas of susceptibility can prompt dis- to temper potential resilience gaps in the O lied Heads of State and Government policy guidelines mentioned above been cussions with industry partners to ensure electrical system with more robust analy- agreed that NATO should work “towards sig- translated within NATO both, at both the stra- mission needs and requirements are proper- sis approaches and policies, it recognizes it nificantly improving the energy efficiency of tegic and the operational level? Can we con- ly defined and communicated to those upon cannot solve every problem on its own. Such our military forces”. Then they declared at sider the Alliance as efficient from an energy whom the USAF depends. Through this pro- considerations need to be institutionalized the Wales Summit in 2014 to “continue to point of view? cess, the USAF can shed light on how its mis- throughout the U.S. Department of Defense work towards significantly improving the en- sion capabilities may be tethered to shared and its industry partners, but also within key ergy efficiency of our military forces, and [...] It could be argued that some initiatives have energy assets. international military alliances like NATO. note the Green Defense Framework”. Two been done within NATO from a bottom-up ap- Only through cross-cutting recognition of the years later, the Warsaw Summit contained a proach only, for the purpose to further push Ultimately, the USAF is prioritizing energy interrelated susceptibility to energy interrup- similar paragraph on energy efficiency with this topic among the Allies. The main pur- resilience investments by pursuing solutions tions can the full picture of how technologies some additions: “…we will further improve pose of this article is to list the most relevant that can most effectively advance mission as- can be best used to reduce collective risk be the energy efficiency of our military forces examples of such ventures. It also reflects surance within a budget-constrained environ- understood. through establishing common standards, re- the author’s opinion that what has been done ment. The MTA process helps identify where ducing dependence on fossil fuels, and dem- so far is only the beginning and quite far from investments should be made and encourages onstrating energy-efficient solutions for the - considering NATO forces as being energy collaboration with industry and other part- military”. The last Summit held in Brussels, efficient. ners. From there, the USAF can better assess in July 2018 read that “…we will also further which technologies – traditional or disruptive improve the energy efficiency of our military SMART ENERGY TEAM (SENT) – might best reduce identified mission assur- forces, including through the use of sustain- This initiative has the merit of being the first ance gaps. Doing so maximizes the impact of able energy sources, when appropriate”. to take stock of the situation within NATO limited resources to both enhance Enterprise immediately after the Chicago Summit Dec- resilience and retain an operational edge. As we can see, although with different lev- laration. Its results are still current today: This analysis approach, coupled with addi- els of sensitivity, the issue of energy effi- tional efforts the USAF is pursuing to explore disruptive technologies, like wireless energy transmission, or cutting edge business mod- by Mr Andrea Manfredini els, like Energy-as-a-Service, are helping put the USAF at the forefront of tackling energy Figure 1: USAF missions rely on a system-of-systems CDR Andrea Manfredini (ITA Navy) is Head of the Doctrine and Concept De- resilience from multiple angles. network geographically distributed across the globe. A velopment Division at the NATO Energy Security Centre of Excellence (NATO denial of service to systems such as energy and water ENSEC COE) in Vilnius. E-mail: [email protected] The threat environment is changing, so em- that enable this network could have impacts that ripple bracing new approaches and polices to tackle across the mission. The USAF is tackling this chal- energy assurance must come first in order to lenge with an innovative approach to enhance enabling maximize the benefits of those energy tech- system resilience. nologies that are and will disrupt the current Source: USAF 2019

54 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 55 reducing fuel consumption in the military is THE SMART ENERGY LIBGUIDE There are two projects under the SETAC’s INNOVATIVE ENERGY SOLUTIONS FOR an operational imperative. Energy efficient umbrella that are funded by SPS: This useful online library on energy topics in MILITARY APPLICATIONS (IESMA) solutions will not only save money when less the military was created in 2011 and is still CONFERENCE AND EXHIBITION fuel is used, but can above all save soldiers’ 1. Harmonized energy monitoring & simula- maintained and update by the Emerging Se- lives, and help improve the mobility, as well tion tools; In line with the NATO mandate of raising curity Challenges Division at NATO Headquar- as the resilience and endurance of military awareness of energy developments with se- ters. It serves as an information sharing plat- 2. Innovative Energy Solutions for Military forces. curity sector implications, IESMA is a forum form. Applications (IESMA). that brings together military experts from Following the Chicago Summit Declaration, academia, industry and the defence to ex- a proposal for the establishment of a Smart SMART ENERGY TRAINING AND HARMONIZED ENERGY MONITORING & change experiences and discuss the imple- Energy Team (SENT) was submitted to na- ASSESSMENT CAMP (SETAC) SIMULATION TOOLS mentation of emerging energy technologies in the military sector. tions. The project had to be funded for two SETAC is a sustained effort to build Smart En- Making an interoperable energy monitoring years under NATO’s Science for Peace and ergy capabilities with the aim to make NATO’s kit and energy simulation tool available, a This is a bi-annual event organized by the Security (SPS) Program. The SENT concept armies more resilient and effective by reduc- harmonized data collection and analysis ap- NATO ENSEC COE, the first of which took was approved by all Allied nations through ing the fossil fuel dependency of deployable proach is going to be developed in order to place in 2011, with the aim of providing a the Political and Partnerships Committee field camps while securing the interoperabil- help generate a common multi-national un- platform - in the form of a conference and an (PPC) in October 2012. According to the con- ity of NATO’s missions. One of the ideas to derstanding of deployed camp energy flows exhibition - for information exchange on best cept, SENT was established as an interdis- improve energy efficiency on military bases is to promote energy reduction initiatives. ciplinary ad-hoc group of experts from vari- to create a test base facility in which troops practices, policies and technologies in the area of energy efficiency in the military do- ous relevant fields. It was tasked to generate can train and energy used is measured: new This ongoing project, led by Canadian re- main. Experts across the world discussed the cross-cutting knowledge and contribute to technologies and energy management tools searchers at CanmetENERGY addresses cutting-edge technical energy developments, the integration of energy efficiency related can then be applied to measure the differ- the energy saving challenge by developing a material and non-material aspects, and their issues into the NATO Defence Planning Pro- ences in power usage and requirements. This harmonized, interoperable solution for NATO relevance for the military operations. The cess, and in the medium and long term, inte- training and assessment camp must be com- organizations, members and partner nations, exhibition provides an opportunity for pri- grating Smart Defence. The roles and goals plementary to the already existing test camps to better monitor, predict and ultimately iden- vate enterprises, militaries, Ministries of De- of SENT included an examination of how re- of several nations. The expected goal of this tify suitable energy reduction strategies for fence (MoDs), universities, organizations, and ducing the energy requirement can shrink initiative is to gain more detailed information deployed camps. It is a multi-national col- agencies to display the latest energy tech- the logistical footprint, thus improving opera- about the use of utilities like energy and wa- laborative effort, to collect deployed camp nologies and systems that could improve en- tional capabilities, minimizing the potential ter on a manned compound, and to test new energy consumption and energy efficient ergy efficiency during military operations and environmental consequences of NATO mili- systems to improve energy efficiency. The technology data to support the development which could also enhance practical coopera- tary activities and reducing force protection dependency on fossil fuels might decrease of a universal deployed energy simulation tion between military, industry and academia. requirements. SENT’s most important goal significantly by testing new techniques and in tool. The main research thrust of the pro- Over the years IESMA has become a recog- was to identify and highlight the best practic- making troops more aware of the importance ject is to evaluate and forecast the power and nized platform for bringing together the mili- es and opportunities for multinational smart of energy reduction. energy requirements and/or savings of a de- tary, academia and industry, as well as gov- energy projects within the Smart Defence ployed camp. To achieve this, two interrelat- ernmental representatives from the capitals framework and SPS Programme. Finally, This initiative lead by NATO Headquarters ed sub-projects are underway, both of which and from NATO’s command structure. IESMA SENT sought to identify and extend the pool Emerging Security Challenges Division also include training to ensure the successful events allow them to update each other on of energy experts within NATO, which in turn (ESCD) has not yet aroused a high level of transfer of equipment: was expected to result in proposals or incen- interest among nations, probably due to the material and non-material solutions and to initiate cooperative activities. tives for more multinational NATO energy ef- lackluster definition of the objectives and on a. Development of an interoperable, portable ficiency activities. During the preparation of how these should be concretely achieved. and non-intrusive energy monitoring kit. This the SENT concept, it was concluded that for Support for interoperability in the field of en- supports harmonized collection of deployed HYBRID POWER GENERATION AND now the focus would be on activities to ad- ergy efficiency is a point that deserves atten- camp energy consumption and energy effi- MANAGEMENT SYSTEM (HPGS) tion, although to date, beyond any declara- vance energy efficiency for land operations. cient technology data; The HPGS generates stable electric power tions, solid results have not yet materialized. This pertains especially to power generation wherever it is needed, being able to use re- Up until now, the participation of the “SETAC and management as well as to soldier power b. Development of a deployed camp energy newable sources, battery storage and, if re- which had lagged behind the advances made flag” in the CAPABLE LOGISTICIAN exercises simulation and energy prediction tool, vali- quired, conventional diesel generators. for naval and air force capabilities. The final both in 2015 and 2019 at the moment does not dated with the multi-national deployed camp th report on SENT was delivered on 6 of May seem to have marked significant progress at energy data collection initiative. The deployable modular HPGS is a proto- 2015. the doctrinal level.

56 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 57 type of a power generator which uses both which is downloaded from the NATO ENSEC The overall objective of this ongoing activity is The above list represents the most important renewable energy sources (wind and solar) COE website. to contribute to energy security within NATO, examples of activities recently, or currently and conventional fuel generators with energy NATO Nations and Partner Nations, by shar- carried out by NATO in the field of energy ef- storage and management solutions. It con- For more information about the HPGS pro- ing information and approaches to enhancing ficiency. As presented, there are different ways sists of two diesel generators, a photovoltaic ject, download the NATO ENSEC COE report energy efficiency, and promoting best prac- and many tools available to improve energy ef- array, a wind turbine, and an EMS includ- regarding the experimentation phase: tices amongst NATO nations. ficiency in the military. Several of these pro- ing a battery pack and power electronics. It https://enseccoe.org/data/public/up- jects have been implemented by individual na- is capable of supplying to different types of loads/2019/03/phase-1-report-hpgs-perfor- The overarching objective of SAS 119, estab- tions, which has led to a lack of coordinated camps and infrastructure, and can be easily mance-analysis.pdf lished in November 2015, is to contribute to effort within the NATO sphere. Additionally, transported and deployed as required, be- military aspects of energy security within energy efficiency tools, whether material (e.g. cause all components are housed in 20 feet ENERGY MANAGEMENT IN MILITARY the NATO Alliance and Partner nations, by technologies) or non-material (e.g. energy ISO containers. This project was initiated in ENVIRONMENT (EMMEE) examining several key technical areas of in- management techniques) in nature, need to 2015 by NATO ENSEC COE with the drafting terest, sharing information and approaches be standardized in order to obtain and main- One tool for achieving energy efficiency is en- of specifications, requirements and an opera- to enhancing energy efficiency, and promot- tain interoperability among NATO allies. ergy management, which the NATO ENSEC tional energy usage scenario definition. The ing best practices among NATO members COE recognize as an instrument that can be with respect to enhancing energy efficiency More information on what is going on within HPGS was funded by the Canadian Govern- implemented in the immediate-short term, ment in order to the increase the relevance in those areas. This activity supports NATO’s the NATO energy efficiency domain can be with low economic impact, and which can be energy security agenda by focusing primarily found in my interview “The Paradox of NATO’s of energy security in the Baltic Sea Region. standardized for interoperability. After its launch it was formally transferred on enhancing energy efficiency through ap- Inefficiency in the Field of Energy Efficiency for to the Lithuanian Armed Forces in February plied technical solutions. It relies mainly on the Armed Forces” by Vitalia Petrone, 2019. As large users of energy, it is believed that the qualitative research; including subject mat- 2016 in order to be used and tested in NATO armed forces of NATO nations could benefit multinational exercises and trainings, as well ter expert interviews and/or surveys within For any clarifications or further information greatly from the application of a standardized the MOD’s of the member states to determine regarding this article you are kindly asked to as in military installations and barracks. The approach to energy management. The EM- testing period of this system during military relevant already sponsored, initiated, or con- contact CDR Andrea Manfredini (ITA-Navy): MEE project takes a case study approach and ducted projects throughout the Alliance. [email protected]. exercises has demonstrated that with HPGS compares energy use at operational camps troops can improve their energy efficiency before and after the implementation of the and ultimately reduce dependence on fos- principles of a “militarized” version of the sil fuels. All these benefits are enablers for ISO 50001 energy management handbook. It enhancing the operational effectiveness is expected that the benefits for the military of forces, through the maximization of au- of using a standardized approach include: a) tonomy, increasing the availability of assets, improvements in safety for military person- strengthening resilience, as well as reducing nel; b) reductions in energy resource con- the logistic footprint. The HPGS is an intel- sumption; c) reductions in logistical burdens ligent Energy Management System (EMS), related to the supply of energy; d) financial which allows surplus energy coming from savings; e) improvements to environmental different types of sources to be stored in its protection. The principles of the militarized battery pack for future use. version of the ISO 50001 handbook promote the efficient use of energy through improve- The project’s goals have been to verify and to ments in three key areas; organizational demonstrate the advantages of using a hy- management (or, to use a more military term, brid power generation system in a Deployed Command and Control – C2), technological Force Infrastructure (DFI) environment and to application, and behavior change. The results analyse whether a HPGS would be beneficial of the case studies are expected to demon- for military use by saving fuel and increasing strate the possibilities for the future develop- energy security. More than two years of us- ment of energy efficiency related concepts, age and testing has given the NATO ENSEC standards and doctrine. COE the opportunity to define the system’s advantages as well as weaknesses. A com- SYSTEM ANALYSIS AND STUDIES (SAS) – plete analysis is presented in a final report, RESEARCH TASK GROUP 119 Smart Energy Headquarters at the Capable Logistician 2019 exercise, Drawsko Pomorskie, Poland [Photo: W. Rusow]

58 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 59 If, for a moment, undertaking a dutiful ges- Manfredini: NATO is not entirely passive to Interview with Commander ture of self-criticism, NATO tried to look these pressures; indeed, over time there ahead instead of looking back at what it has have been some examples of initiatives with- done or is struggling to do, and tried to de- in NATO coming bottom-up, which have tried Andrea Manfredini on his article: fine clear objectives on energy security and to push on this topic. These are the most rel- shared strategies on how to reach them, im- evant examples: mediately it would realize that the road ahead “The Paradox of NATO’s Inefficiency is still long and full of curves. • The Smart Energy Team project from 2013 until 2015, composed of eight experts with in the Field of Energy Efficiency Continuing with the initial provocation, I the aim of exchanging best practices on na- would like to say that I perceive what NATO tional and multinational efforts among NATO has done so far to the extent of 10% of what Nations and Allies. Their conclusions were for the Armed Forces” it should have done, proceeding with this rate summarized in a comprehensive report on of progress it will take about 70 years more need for energy in military activities, focus- before achieving the concrete goals, which in ing on a comparison of the effectiveness of by Mr Andrea Manfredini the meantime will inevitably change! national approaches to reduce energy con- sumption; his interview was conducted in June sels. Almost seven years have passed since Petronė: Don’t you think that this slow pro- 2019 by Vitalija Petronė1, collecting the first input of the energy efficiency topic gress is due to the lack of interest from • The Smart Energy Training and Assess- the views of CDR Andrea Manfredini, within the NATO Summits. However not much NATO nations towards the energy efficiency ment Camp (2016 – ongoing), uses nationally T Head of the Doctrine and Concept De- has been implemented. There is even a lack topic, rather than NATO as an entity? owned micro-grid technologies to test inter- velopment Division at the NATO Energy Secu- of more effective and widespread sharing of operability, measures components by using rity Centre of Excellence (NATO ENSEC COE) the energy efficiency subject within the Allied Manfredini: On the contrary, with the expe- standard protocols and harmonized data, de- in Vilnius. Nations. rience I have gained within these two years velops universal energy monitoring and camp working at the NATO ENSEC COE, attending simulation tools, and evaluates new STANA- Petronė: Commander Manfredini, should With this interview, I aim to share my views working groups, workshops, meetings and Gs on integrated micro-grid technologies; the title of this interview “The Paradox of regarding the current situation of NATO’s committees, I have to say that I have seen an NATO’s Inefficiency in the Field of Energy actions in the field of energy efficiency with incontrovertible growth of interest on ener- • The System Analysis and Studies SAS – Re- Efficiency for the Armed Forces” considered the utmost transparency and intellectual gy efficiency at the level of single nations. It search Task Group (RTG) 119, (2015 – 2019) as a provocation with respect to the current honesty. It is my duty to inform you, that must be said that, since NATO is an Alliance contributes to military aspects of energy se- situation of the energy efficiency topic with- even the 29 October 2018 Report on Pro- of currently 29 nations, among them there curity within the NATO alliance and partner in NATO? gress Achieved in the Implementation of are different sensitivities and priorities, as nations, by examining several key areas of NATO’s Role in Energy Security prepared for well as different ways of approaching this interest, sharing information and approaches Manfredini: Actually, the oxymoron in the ti- the summits on energy security contains a subject: in some states energy efficiency for enhancing energy efficiency, and promot- tle is used on purpose to attract and cause dedicated paragraph on energy efficiency in goes hand in hand with environmental pro- ing best practices among NATO members the curiosity of the reader. On the other hand, which the topic is covered, albeit generally tection. In others, efficiency means, above with respect to enhancing energy efficiency it should be stated that the paradox within including some examples of ongoing initia- all, reducing the logistics footprint. Still oth- in those areas. The mission of the SAS RTG NATO’s inefficiency does exist: it was said tives. ers look at energy efficiency as a medium- panel is to conduct studies and analyses of NATO’s Summit held in Chicago in 2012 that long term tool to reduce costs, albeit against an operational and technological nature, and the Heads of State and Government agreed to The fact that the NATO ENSEC COE is not a a substantial initial investment. Then there to promote the exchange and development of integrate the energy efficiency of the armed part of the NATO Command Structure, al- is the largest group of nations, which is methods and tools for operational analysis as forces as an area of intervention within the though it is accredited by NATO Allied Com- waiting to see what kind of directions the applied to defence problems. vast domain of energy security, in order to mand Transformation (ACT), allows us to in- Alliance will take, so they will adapt them- increase the overall resilience of the Allies. dependently express an overall view on the selves to the Alliance later. • The Innovative Energy Solutions for Mili- Then the same message was shifted regu- topic of energy security that is not affected tary Applications is a bi-annual international larly and included the same content in all the or influenced by any kind of conditioning, in- Petronė: In your opinion, how do you explain conference and exhibition (first held in 2011), final communiques of the successive Sum- evitable in the case of those who are called to the reason of the disconnection between event held in Vilnius that aims to enable in- mits, the last of which was in 2018 in Brus- account for what they do. NATO and what the nations do, or are pre- formation exchange on best practices and pared to do? technologies for advancing energy efficiency 1 Subject Matter Expert of Doctrine and Concept Development Division, the NATO ENSEC COE

60 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 61 “NATO’s Experience in the Field of Energy Ef- future. Therefore, small and medium-sized ficiency for the Armed Forces”. enterprises in this sector cannot risk huge amounts of capital without a reasonable cer- Petronė: What risks can you foresee if a tainty of an economic return on investment weak cooperation level between NATO allies in the near future. In a nutshell, the indus- continues? try suffers from the same immobility that is characterising NATO. Manfredini: For strictly military aspects, NATO is based on the key concept of interop- It goes without saying that in the absence of erability. This is what allows troops from 29 standards, there is a risk of leaving this field different countries to work in a coordinated open to industry to sell the products it wants, and effective manner. Ultimately, interoper- which would result in NATO investing in com- ability is achieved through the emanation of mercial choices rather than fulfilling of spe- shared concepts, policies, and finally stand- cific requirements raised by armed forces. ards that nations voluntarily decide to abide by. Petronė: It seems that there are many ini- In the absence of standards, there is a risk of tiatives and different actors involved. But having extreme situations in which the equip- is there a manager within NATO who deals ment supplied to the different armed forces with energy efficiency? cannot be interconnected: I am not speak- ing only of the currently known problem that Manfredini: With such a high number of ex- can be practically solved for example 50Hz perts3, the real problem is the lack of a “con- or 60Hz or the square plug that does not fit trol room” that is able to summarize the vari- into the round socket. In today’s intercon- ous initiatives and is able to link and prioritize nected world, the concept of interoperability them between the various levels (political, has also evolved, it focuses on data exchange strategic, operational and tactical) related to protocols which are an essential element, for energy efficiency. At present, organizational Energy Efficiency equipment testing phase during international exercise Capable Logistician 2019, Drawsko Pomor- skie, Poland [Photo: W. Rusow] example, for the realization of micro-grids. confusion risks complicating things, with a political level body that focuses attention on Again, standardization is, more than ever, in- purely tactical elements and, vice versa, the in the military. It brings together numerous It has been demonstrated that hybrid power dispensable in the organization of appropri- tactical level that is perceived as interference experts from military, industry and academia, systems can reduce fuel consumption by 20% ate chains of command that must deal with in the political and economic plan. It is ob- and creates a platform to present expertise – 30% along with an increase of time required energy management. vious that in the case of such confused sce- and discuss lessons learned; between the regular diesel generators main- nario, the most direct reaction undertaken 2 tenance period ; Petronė: In a general way, what role does by the Nations is blocking of, or at least un- • The deployable modular Hybrid Power Gen- the world of industry and the manufacturing supporting, any kind of initiative. eration System (launched in 2016), is a power • The Energy Management in a Military Ex- sector play? generator prototype designed to reduce fuel peditionary Environment uses a case study Petronė: Since the problem is well known, consumption by increasing power generation methodology to identify changes in how en- Manfredini: Because of the absence of stand- what actions has the NATO ENSEC COE tak- efficiency and therefore improving the energy ergy is managed before and after implement- ards, the industrial world is navigating on en to support the Alliance in the Energy Ef- supply and security of the military camps. ing new guidance based on an enhanced ISO sight. Only the big companies that have capi- ficiency field? This is achieved with energy storage tech- 50001 approach, including ISO 50001 princi- tal to invest in research and development are nologies, namely with high capacity batter- ples (organizational management), techno- trying to follow their own strategies that fo- Manfredini: A few years ago, the NATO EN- ies by storing surplus energy and returning logical applications (e. g. metering and moni- cus on certain technologies, which at the end SEC COE, supported by the Lithuanian rep- it to the load when needed. The HPGS also toring) and behavioural change. they hope to use to engage the Alliance in the resentative at NATO Joint Standardization can incorporate renewable sources of energy, such as PV and wind generation to further Further information on these projects and 3 Hereby is the list (not exhaustive) of the entities that in a certain way deal with energy efficiency on behalf of NATO: NATO Headquar- reduce diesel generators’ fuel consumption. activities can be found in my article titled ters International Staff (ESCD, ESTF); NATO Headquarters – International Military Staff – (Plans and Policy Division), Allied Command Transformation, Allied Command Operations, Supreme Headquarters Allied Power Europe – Energy Efficiency Environmental Protec- tion Working Group, Environmental Protection Working Group, Science & Technology Organization, Petroleum Committee, Military 2 For more information about the HPGS, download the NATO ENSEC COE report regarding the experimentation phase: https://ensec- Engineering Working Group, NATO Energy Security Centre of Excellence, Military Engineering Centre of Excellence. coe.org/data/public/uploads/2019/03/phase-1-report-hpgs-performance-analysis.pdf

62 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 63 Board (JSB), brought to the discussion ta- but the newly appointed Political Committee ble the proposal to create a special working as leader of the activities connected to the group, to be placed in the hands of the NATO Roadmap for Consolidating NATO’s Role in Notes JSB, which dealt with the subject of energy Energy Security, gives us hope for consistent security as a whole. This proposal was op- future developments. posed by some of the representatives and, in order to give a possible future to this initia- Petronė: Can you elaborate more about this tive, the chairman of the assembly asked the initiative at the political level on the Road- SHAPE representative to prepare and present map for Consolidating NATO’s Role in En- in the following meetings a roadmap on en- ergy Security? ergy security. Manfredini: Despite the fact that the word After two years in which the energy “wind” “roadmap” is aligned with the initiative led by seemed to have lost much of its strength, this ACT and ACO, this project takes place at the proposal was finally developed through an highest level of the decision-making bodies initiative that is now bringing together rep- of the Alliance. At the moment the Political resentatives of the main branches of NATO Committee is engaged in a series of full- around the same table to deal with the mili- spectrum cognitive conferences on energy tary aspects of energy security. security. For example, the NATO ENSEC COE was interested, among other topics, in pre- After several meetings of these representa- senting the situation in the education and tives, a workflow was born in which all the training area, for which in 2015 it was ap- steps of the Military Aspects on Energy Se- pointed as Department Head for Energy Se- curity Roadmap were defined. The steps curity. For now it is not yet clear whether any which are expressed in 14 points, have been initiatives will be undertaken, or what they planned to be developed in detail, including will be, after these meetings. steps related to concepts, policies, defini- tions, projects, management bodies, etc. What is certain is, that without specific tasks or recommendations issued by the Political At the moment, the situation is that the re- Committee, the risk of yet another failed at- sults of the Military Aspects on Energy Secu- tempt is high. In this regard, I hope that on rity Roadmap, which were recently presented the part of the speakers who were alternat- to the NATO Political Committee, will be sub- ing in these meetings there will be a sense mitted for the attention of the NATO Military of self-criticism in order to present to the Committee and a response is anticipated by Political Committee the current situation on the end of summer 2019. We hope that the Energy Security, highlighting successes and proposal, which contains taskings for the two limitations as well. It is the only way to un- Strategic Commands (NATO ACT and NATO block a plastered situation that otherwise ACO) will be positively accepted, in order to risks encasing initiatives sustained by a few finally able to proceed with the definition and and probably not fully appropriate to ensure implementation of this roadmap. The im- an effective contribution to the Alliance. plementation of this roadmap would be the first true integral and structured approach Petronė: Commander Manfredini, thank you to energy efficiency of the Armed Forces of very much for the interview. the Alliance. The most likely timeframe for performing any task seems to be set within For any clarifications or further information five years. regarding this article you are kindly ask to contact CDR Andrea Manfredini (ITA-Navy) by As you can see, we are only at the beginning, Email: [email protected].

64 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 65 66 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS ENERGY SECURITY: OPERATIONAL HIGHLIGHTS No 13 67 NATO Energy Security Centre of Excellence

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68 No 13 ENERGY SECURITY: OPERATIONAL HIGHLIGHTS