FORESIGHT Climate & Energy Autumn/Winter 2024 - Teaser
FORESIGHT Climate & Energy AUTUMN/WINTER 2024
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QUESTIONS AND ANSWERS
The words “security of supply” or “energy security” linger on lips across the energy and decarbonisation sector. They echo around the corridors of power as policies and actions to maintain a reliable and low-carbon power market are increasingly a vote-winner.
Yet, whichever way you look at energy security, difcult questions are raised: How can we ensure the lights stay on? How do we physically secure our low-carbon generators, grids, power markets and buildings? How do we avoid or shield ourselves against the weaponisation of energy infrastructure (page 40)? How do we secure our supply chains (page 14) so the tools to decarbonise remain at our disposal?
The past few years have thrust energy security into the spotlight on a scale seen very few times in history, if ever. The complex backdrop of tragic human confict and catastrophic weather events is forcing lawmakers to face the issue of security of supply today. It’s impossible to fully explore the questions before action is necessary. Many of the articles in these pages of our latest special issue use the Ukrainian confict as a microcosm for the global debate over the security of supply.
Beyond the more blatant, headline-making threats to energy security—those of war and hurricanes—other events can damage energy security: foods, hail storms, extreme heat. Developers, utilities and even insurance companies (page 66) are working on making renewable energy more resilient to these threats (page 22).
The energy transition would be practically impossible without the 21st-century digital revolution. But this carries threats. With a stable Wi-Fi connection, malicious actors—state-sponsored and otherwise— can access building controls (page 32), servers with personal data and even wind turbines (page 58).
However, for every complex issue the energy transition creates, there are a greater number of equally-complex solutions.
As the name suggests, distributed renewables generation (page 50), such as wind and solar, are much more dispersed. Taking out one turbine or one array will have less of an impact on supply when compared to a thermal generation project being damaged. Increasing renewables capacity also means countries can take ownership of where their power comes from.
Greater cross-border interconnectivity and synchronisation (page 6) provide grid stability and fexibility—there is safety in numbers. And the digital age ofers artifcial intelligence to spot anomalies, automate processes and form protective barriers.
In our 19th issue of FORESIGHT magazine, we want to tell the story of how energy security needs to be addressed now. And that by implementing some of the solutions to these energy risks, we can also accelerate the energy transition to a decarbonised economy.
Any action taken now needs to have at least one eye on its impact on the future decarbonised energy system.
David Weston EDITOR-IN- CHIEF
SECURITY
THROUGH SYNCHRONISATION
Russia’s invasion of Ukraine has sparked vital changes in Europe’s electricity networks, breaking the previous cycle of inaction
PAGE 6
RISKS AND REWARDS COLOUR CHINA’S ROLE IN THE TRANSITION
China is vital to the decarbonisation of energy systems, and its ongoing role will be crucial
PAGE 14
MAKING RENEWABLES RESILIENT
The renewable energy sector must adapt to the new normal of hail, foods, and extreme heat
PAGE 22
HOME INVASION
Vulnerabilities surround us
PAGE 30
SMART BUILDINGS ARE ON THE RISE. SO ARE CYBERATTACKS
Data-driven smart buildings reduce energy consumption. However, digitalisation also heightens the risk of cyber threats
PAGE 32
BORDER PROTECTION
Cross-border infrastructure faces innumerable risks but is crucial for a resilient energy transition
PAGE 40
ARMADA
While distributed renewable energy sources present challenges for system operators, they enhance fexibility and security against adversity
PAGE 50
THE GROWING THREAT OF CYBERSECURITY
Cybersecurity is emerging as a major risk to energy infrastructure and renewable projects. Proactive measures are essential to protect these vital initiatives
PAGE 58
INSURING THE TRANSITION
The insurance sector wants to help secure the energy transition
PAGE 66
SYNCHRONISA SECURITY THROUGH
Homeland security Ukraine has focused on improving its energy security in response to Russian aggression
TEXT SAM MORGAN
Geopolitics and ener g y policy are inextricably linked. Russia’s invasion of Ukraine has triggered action where previously there was only inertia, as recent developments in Europe’s electricity networks demonstrate
TION
iscussions about energy security often revolve around molecules rather than electrons. But as a handful of countries on the frontline of Russia’s aggression are showing, there are also some concerns around electricity grids. When the Kremlin launched its invasion of Ukraine in February 2022, it became immediately clear that Russian President Vladimir Putin would readily use energy as a weapon to gain a tactical advantage.
In June of that same year, Russia’s former leader, Dmitry Medvedev, said that Europeans would be “freezing in their homes” after governments decided to back Ukraine against the invading power. “The cold is coming soon,” he added, in what was a clear threat, given Europe’s reliance on Russian gas imports for household heating.
Two months later, Russia halted gas shipments through the Nord Stream 1 pipeline, ostensibly to carry out repairs. This caused gas prices in Europe to spike, but thankfully its political leaders had at that time managed to replace nearly 80% of Russian pipeline gas with alternative supplies.
Putin’s decision to invade has dramatically and perhaps irrevocably reduced Russia’s role in Europe’s energy markets. In 2021, 45% of the European Union’s gas imports came from Russia. Last year, it was just 15% and work is continuing to slash that fgure to zero.
POWER GAMES
The writing is very much on the wall. Russia’s infuence on all things energy is on the wane. A handful of countries in Europe’s east inherited electricity networks that were built during the Soviet Union period and have remained reliant on Russia for grid balancing and other network services.
When the Ukraine invasion was launched, limiting Russia’s potential to infuence electricity fows was a top priority and Europe’s transmission system operators quickly leapt into action and triggered an emergency synchronisation of both Ukraine and Moldova’s grids with continental Europe’s.
Synchronisation involves maintaining the grid at 50 hertz by balancing energy supply and demand within the covered area. This preserves grid stability and prevents power failures and outages. Connections are normally made using alternating current cables. Plans had been in motion since 2017 to synchronise those grids with Europe’s but both Ukraine and Moldova still had to implement a number of reforms and improve transmission infrastructure before the link could be established.
A fault with either the Ukrainian or Moldovan system could have had signifcant consequences for the rest of the connected European grid, so caution was very much the priority for regulators.
PRACTISE CAUTION
In late 2021, new studies identifed a number of risks that still needed to be addressed, so 2023 was estimated as the best possible date for project completion. But in the end, what was predicted to take at least an additional 12 months was actually completed within just three weeks, thanks to the impact of the Russian invasion.
Moldovan energy minister Victor Parlicov called it the most important moment for his country’s energy sector and its energy security, while State Secretary for Decarbonisation Carolina
Over-exposed Moldova is considered one of the most energy insecure countries but is making moves to bolster its security
Novac says it was “history in the making” and a “paramount change”.
“After all the political pressure, it was fantastic to see how this happened and how this process was achieved within less than a month instead of three years. You can be really fast and decisive in times of crisis,” she insists.
Moldova is considered to be one of the most energy insecure countries in the world because of its almost total dependence on energy imports. This is quickly changing though and at the end of 2024, the government will launch its frst ever renewable energy auction, as part of eforts to boost domestic electricity production.
Synchronisation means more cross-border connections with Romania can be built, opening up more commercial opportunities for power trades and improving the chances of extra investment in more clean energy capacity. “I hope that the lesson learned here for security purposes and strategic projects is for governments to be more speedy, more decisive and more pushy for what really matters to people,” says Novac.
NO REGRETS
In March, the European Commission commemorated the two-year anniversary of the synchronisation project. Energy chief Kadri Simson pointed out that the initiative has helped Ukraine mitigate much of the damage done to its power infrastructure by the Russian military.
“The synchronisation of the grids two years ago was not only a very important achievement for securing energy supplies for both Ukraine and Moldova. It was also a strong political symbol of our support, and that remains the case today,” Simson stated.
RISKS AND REWARDS COLOUR
CHINA'S ROLE IN THE TRANSITION
The decarbonisation of ener g y systems so far has been largely dependent on China. The country has a central role to play in future of the transition to a decarbonised economy but the rest of the world should act with caution
TEXT JASON DEIGN · ILLUSTRATION BERNARDO FRANÇA
orkers at the Ebro car factory in Barcelona, Spain, have good reason to thank the Chinese. Until 2021, they worked for Nissan. Then, the Japanese carmaker moved its European operations to France, leaving 3000 Spanish labourers out of work. The outlook for the factory hands looked bleak until Chery, a state-controlled car manufacturer from China, struck a deal with Ebro, a brand previously owned by Nissan but abandoned alongside Nissan’s other Spanish assets.
The companies agreed to restart production at the Ebro facility in 2024. But then, in September, Chery delayed plans to make its Omoda petrol and electric
sports utility vehicles at the Ebro plant. The year-long delay was prompted by duties from the European Union (EU) on Chinese cars. While production at the plant has restarted anyway, it is initially focussing on little-known Ebro combustion engine vehicles instead of the Omada brand that Chery has exported worldwide.
The whole afair illustrates the difculty of relying on China as a business partner for the energy transition.
EU TARIFFS
China’s industrial might makes it a powerful ally in decarbonisation. Still, that power has worried lawmakers in Europe and elsewhere—prompting protectionist measures that threaten to slow progress towards a cleaner energy system. Vehicle electrifcation is a good example. The EU tarifs slapped on carmakers such as Chery come as Chinese electric vehicles (EVs) food European roads, stealing market share from EUbased automotive leaders.
The levies are intended to level the playing feld between these European companies and fast-growing Chinese rivals such as BYD and MG, a former British brand now owned by the Shanghai Automotive Industry Corporation. However, by cutting of a source of low-cost products, the tarifs are also likely to slow the adoption of EVs in general, putting EU climate goals at risk. And it is unclear whether European carmakers can deliver competitively priced EVs without relying on China.
VITAL MATERIALS
According to ACEA, the European Automobile Manufacturers’ Association, China dominates the production and processing of the materials used in EV batteries and electric motors. The association—which has had an ofce in Beijing for almost two decades— says it is important to maintain robust industrial and institutional relationships with China.
High-profle ACEA members, including BMW, Mercedes and Volkswagen, have spoken out against imposing trade barriers on China. The advantages of having access to China’s supply chain are even greater in the solar industry. Overproduction by Chinese module suppliers has led panel costs to fall by 50% in the last year, says Dries Acke of the solar industry association SolarPower Europe.
From an energy security point of view, “It is incredibly good news for the European economy that solar costs are at that level,” Acke says. “Solar has played an incredible role in saving European consumers from the worst of the energy crisis.”
"China currently owns a very dominant position in all the key segments of the global supply chain of clean technologies"
Made in China
China dominates the supply chain of many key transition technologies
UNCERTAIN ALLY
The counterargument is that China is a problematic country to do business. As the world’s largest economy by gross domestic product based on purchasing power parity, it can aford to subsidise its industries more than any other region. Companies in China are not subject to the kinds of environmental controls typically seen in the West, denting the cleanliness of the clean technologies that the world buys from Chinese manufacturers.
The one-party state also has a poor record on democracy and human rights, with the treatment of ethnic Uyghurs in the northeast Xinjiang autonomous region being a particular focus for concern in the last decade. In fairness, though, it is not democracy, human rights or the environment that worries Western politicians. After all, most countries in the West are happy to do business with petrostates, such as Saudi Arabia, which also have chequered records.
Instead, the big concern about China is that it controls so much of the clean energy supply chain that
there might be nowhere else to turn to for equipment supplies. “China currently owns a very dominant position in all the key segments of the global supply chain of clean technologies,” said Roberta Pierfederici of Imperial College London's Grantham Research Institute during a March 2024 interview for FORESIGHT’s The Jolt podcast.
SUPPLY DOMINANCE
China’s dominance is particularly marked in three critical segments: solar photovoltaics, batteries and electric vehicles. “China plays a global leading role from the start to the end of the supply chain of those technologies,” Pierfederici said.
Its control over these supply chains gives it growing geopolitical leverage as the world moves to cut carbon emissions. Chinese President Xi Jinping has made no secret of his desire for global expansion, notably towards Taiwan. There are parallels between China and Vladimir Putin’s Russia, which was initially able to invade Ukraine with relative impunity, partly
Inside a building in the US state of Rhode Island, hail cannons shoot whisky-ball size globes of ice at 85 miles an hour at solar panels.
In another room, lithium-ion batteries are being set on fre. This is no Hollywood movie set but an insurance company research campus.
“It’s amazing what we do to try to understand the fundamentals of risk,” says Doug Patterson from FM Global, a US-based mutual insurance company specialising in loss prevention services.
The frm’s dramatic-sounding research aims to identify what size hail stone will break certain types of panels, he explains. Given this knowledge, manufacturers can make their products more hail-resistant and developers can make more informed choices on which panels to buy.
Damage and destruction of solar panels from hail storms is the current number one preoccupation of the renewable energy sector in terms of extreme weather as losses have mounted. A series of catastrophic insurance claims have brought the issue dramatically to the fore—in the summer of 2022, hailstorms in the US state of Texas inficted more than $300 million in damages.
Hail storms are less frequent than other types of extreme weather but are particularly costly. One claim to a solar farm cited by insurance frm GCube between 2018 and 2023 totalled more than $75 million. GCube has gone so far as to call the issue “a major threat to the viability of new projects”. The company warns that these losses are escalating—more than 70% of losses sufered by the sector occurred after 2017.
SEVERAL FACTORS HAVE combined to cause a surge in risk in recent years. Recent changes to solar PV technology have signifcantly increased the solar sector’s vulnerabilities to hail. As the industry has laboured for the lowest Levelised Cost of Energy (LCoE), it has enlarged solar panels from 300 Watts to 400500 Watts, or even higher, and made panel glass thinner, from 3.2 millimetres thick to just 2 millimetres.
It has also increasingly built solar farms in areas more prone to hailstorms, such as east of the Rocky Mountains in the US. Developers are also increasing the size of projects, resulting in miles and miles of land covered in glass panels—a bigger target to be hit in one go.
At the same time, scientists expect climate change to boost the ferocity of hailstorms in most regions, with stones large enough to damage solar panels becoming more common. Storms are also predicted to happen more often in Australia and Europe. However, the frequency might fall in East Asia and the US, according to a 2021 study published by science journal Nature.
INSURANCE COMPANIES are shielding themselves by increasing premiums for solar farms or even withdrawing coverage. Insurers have become stricter about setting maximum limits for natural disasters, and the coverage limits for events such as severe convective storms have been reduced signifcantly compared to overall project values, according
Cost benefit
Thicker glass makes solar panels more expensive, cuting
to a report by GCube. This is causing delays and cancellations of projects.
Deductibles—or the excess the insured party pays before insurance coverage kicks in—have also changed, with insurers introducing specifc deductibles for severe convective storms and other natural disasters have become the norm, the frm also noted.
These changes in policies and price hikes have had a signifcant impact on lenders and lender consultants and are causing uncertainty about the future of projects, it states.
“The more of these events occur, the more it will have an impact on the industry generally, and terms and conditions are going to become more and more challenging,” says Mohammed Zeeshan Junedi at GCube. “It’s not our intention to punish our clients, but we are looking to protect our bottom line.”
THE RENEWABLE ENERGY sector has moved to adapt to extreme weather threats, such as choosing development sites more carefully, elevating them, improving drainage to reduce food risk, and picking technology more cautiously, according to Junedi.
Hail risk is, however, trickier to mitigate. Solar is a particularly competitive industry, where bidding processes for projects result in tiny margins, and he says that competition between solar panel manufacturers means the glass is thinner than it could be. Thicker
would mean a drop in efciency, in turn afecting the LCoE.
In September 2024, assurance provider DNV launched a service in the US to provide solar developers in North America with verifed assessments of large hail risk. It has partnered with climate risk analysts Jupiter Intelligence to provide the probability of a hail event for a specifc location, as well as the probability of the size of the hail itself.
Crucially, the data covers both current risk and that expected throughout project lifetimes up to 30 years in the future. By providing precise, forward-looking data, the frm hopes to empower solar developers and project owners to make informed decisions that protect their investments and ensure long-term viability.
Technology developments show potential for the solar sector to mitigate the risk of hail. One idea in development is for a net over each panel to catch hail before it strikes the glass. It could be installed on single-axis tracked plants that can tilt their solar panels at around 50-75 degrees—the net would be activated only when there is a threat of hail, so there would be no disruption to power generation in normal times.
HOME INVASION
Vulnerabilities surround us. The twin hurricanes of Helene and Milton, which batered the southeast United States in September and October 2024, brought the joint issues of energy security and climate change crashing into the homes of millions. Increasingly, ever-more violent extreme weather events threaten the infrastructure, energy sources and buildings we rely on. There are also the more direct human-led threats. Creating a society with distributed renewables, with greater interconnectedness—in every sense of the word—will create a low-carbon, secure, more predictable and more equitable energy environment for us all. So that, when we fall, we can get back up again. •
TEXT SEAN CARROLL · ILLUSTRATION BERNARDO FRANÇA
SMART BUILDINGS ARE ON THE RISE .
SO ARE CYBERATTACKS
The increase in data-driven smart buildings is expected to make the global building stock more ef f icient and less ener g y-consuming. However, as with any internet-connected technolo g y, greater digitalisation comes with risks, making buildings more vulnerable to cyberattacks
nter a new ofce building and you may notice smooth white boxes and shiny black orbs afxed to the ceiling. These seemingly innocuous devices are sensors, silently generating data about the usage of the building they’re stationed in. Sensors may detect movement, allowing them to identify the number of people in a room at a given time, or they may monitor an array of other factors, such as air quality, humidity, or noise levels.
Beyond bespoke devices, software can also be installed to track the number of times lift doors open and close, the frequency employee badges are swiped, or how often diferent devices access the WiFi network.
Taken together, this data can provide a complete picture of a building’s operations, which would be challenging to generate manually. It can reveal everything from water consumption and power usage, to the ebb and fow of occupancy rates.
ENERGY EFFICIENCY
The idea behind this data generation is to empower building managers to make processes, including heating and cooling, ventilation and lighting more efcient. An online Building Management System (BMS) portal processes the data, acting as the building’s control centre.
Increasingly, machine learning algorithms are deployed to draw lessons from the data collected. Artifcial intelligence (AI) is then used to optimise the building—reducing air conditioning in sparsely occupied rooms, dimming or turning of lights when meeting rooms are typically empty, and so on.
This overview of the data collected by the building sensors enables managers to determine if further adjustments should be made or if physical maintenance is needed. The technology also allows a single building manager to act as a caretaker for multiple buildings.
ADVANCE ANALYTICS
More sophisticated systems can even prompt building owners to reduce energy consumption further, accurately informing them of the benefts if, for example, solar panels were installed or electric vehicle chargers were made available to staf. This new tech-optimised approach to building management is captured under the Silicon Valleyesque-term “smart buildings”.
Major technology companies are investing heavily in making buildings more digital, marketing AI and machine learning tools for building managers to cut costs, manage buildings more efciently and meet legally mandated environmental targets.
The European Union is also on board with the smart buildings revolution, legislatively requiring
Easy access
Widely connected smart buildings increases the vulnerability to cyberatacks
member states to promote digital technologies in buildings to reduce energy consumption.
Around 40% of energy globally is used in the built environment, meaning that even seemingly small effciency gains in an individual building, such as a 5% drop in energy consumption, can signifcantly alter total emissions when replicated at scale.
NEW RISKS
The promise that smart buildings can ofer granular insights into how buildings are used is not just reserved for new, cutting-edge constructions—sensors can be installed in existing properties of all kinds, even historic churches.
However, while proponents highlight the many benefts of digitisation, allowing internet-connected machines to collect and share data online comes with new risks. Security threats are a major issue facing smart building operators, as online systems are inherently open to cyberattacks.
“These complex cyberphysical systems expose the building and occupants to new risks and threats that in the past required physical access to realise negative consequences,” says John Sheehy of IOActive, a cybersecurity frm based in the United States.
According to the US Department of Energy, some 40% of building management system servers have been targeted by attacks including malware and ransomware. Harry Ostafe of Veridify, a cybersecurity
company focused on buildings, says that increasing the number of internet-enabled devices on a building’s network also increases the possibility of a successful cyberattack.
“There’s a lot of beneft of having those devices: you get more intelligence about the building, you can provide a better occupant experience, you can have better operational efciencies and save energy. But the more devices that connect to the internet to give you that beneft, the larger the risk,” Ostafe says.
CYBERATTACK
Experts warn that the consequences of a cyberattack can be devastating, both fnancially and physically. Hackers can render buildings unliveable by intentionally manipulating the temperature and altering humidity and air quality, says Sheehy. Emergency systems designed to protect buildings could also be rendered useless.
“Power, fre suppression, and other high impact building services could be made inoperable or used to cause physical damage to the building,” he says.
Hackers may also gain access to the internal camera systems of a building, allowing them to watch occupants—a particular issue for organisations where employees carry out sensitive work, such as government agencies.
MALICIOUS INTENT
One of the most common attacks is to introduce socalled “ransomware” into the system, encrypting data which is vital for the building’s normal functioning. Hackers then demand a payment, often through un-
BORDER PROTEC
Critical cross-border infrastructure remains exposed and vulnerable to damage, whether by accident, malicious intent or natural causes. Europe’s leaders and operators are making moves to fortify this grid capacity, which has knock-on effects on the ener g y transition
TEXT KIRA TAYLOR
TION
Laying
ver the last few years, Europe has witnessed a series of attacks on its energy, telecommunications, and transport infrastructure, revealing the vulnerability of its systems amid an increasingly unstable geopolitical landscape. Europe’s gas pipelines, subsea cables, and onshore infrastructure have all been targeted, with this often linked, or suspected to be linked, to Russian actors.
As Europe looks to fully phase out Russian gas, the threat of attacks will potentially increase. Meanwhile, instability in the Middle East could have spillover efects. These geopolitical challenges border Europe as it undergoes a major economic transformation, phasing out fossil fuels and switching to clean and digitalised technologies. While this will inevitably boost future energy security, it will create more vulnerability in the near term.
“We are completely transforming our energy system, so we are vulnerable already now because you switch of coal—that's good for the climate—but at the same time, you bring additional intermittent power in,” says Andris Piebalgs, a former European energy commissioner and professor at the Florence School of Regulation.
“All these systems will be more digital, so could be more afected by cyberattacks. We will have more clever infrastructure, but it defnitely brings new vulnerabilities,” he adds.
INCREASING DESTRUCTION
Over the past decade or so, as tensions grew with Russia, Europe witnessed an increasing number of attacks. Even before the invasion of Ukraine, there were concerns about Russia’s actions, including Russian naval vessels disrupting the construction of a subsea interconnector between Sweden and Lithuania in 2015.
The run-up to Russia’s full-scale invasion of Ukraine
saw it shoot down an old Soviet satellite in a direct-ascent anti-satellite missile test, a Russian-fagged ship was accused of cutting a cable to a key satellite uplink station in Norway, and a major cyberattack occurred the day it invaded Ukraine that had repercussions on Europe’s energy system.
“Across Europe, we have seen a number of phases of Russia's shadow war, if we want to call it that, against energy and critical infrastructure. This is something that we would have seen more in the World War Two era or the Cold War era,” says Benjamin Schmitt at the University of Pennsylvania and the Democratic Resilience programme at the Centre for European Policy Analysis.
“As of the early 2000s, folks believed that the threats were largely moving over to the cyber realm almost exclusively, and therefore, the focus was on cyber-defences. Certainly, it was and continues to be the predominant threat vector for energy and critical infrastructure. However, Russia was already building up capabilities to do subsea and onshore infrastructure attacks in the 2010s,” he adds.
MAJOR DISRUPTION
Since the invasion, there have been major disruptions to Europe’s energy system, notably to its gas supplies. Europe had relied on Russia for almost half of its gas imports. The sudden drop in supply caused price shocks and fears of shortages that ricocheted onto energy bills and industrial competition.
The cut-of from Russia was further exacerbated in September 2022 when the Nord Stream One pipeline—which brought Russian gas to Germany, and the never-used Nord Stream Two pipeline—were destroyed by a purposeful act. The perpetrator remains unknown, but it is hard to miss the connection to the war in Ukraine.
In 2023, this was followed by damage to the Balticconnector gas pipeline that connects Finland and Estonia. The pipeline was shut down and telecommunication cables were also disrupted after a Chinese-fagged ship dragged its anchor across the link.
Prime target Ukraine generation infrastructure has become an object for Russian aggression
“Across Europe, we have seen a number of phases of Russia's shadow war, if we want to call it that, against energy and critical infrastructure”
Europe’s ofshore pipelines are particularly vulnerable, says Piebalgs. “I think this is where the biggest challenge is. I would also look at the Mediterranean pipeline because supplies from Algeria are important. Our electricity system is still very much dependent on gas. As soon as there are gas [price] spikes, there are electricity [price] spikes,” he adds.
There is also an equal risk onshore, says Schmitt, pointing to damaged infrastructure and the sabotage of sites supporting Ukrainian defence. This includes damage to a pipeline linking a foating regasifcation unit to Germany. Russian nationals and non-Russian nationals have been ar-
rested for some of these incidents, and it is clear that Russia has a well-established playbook for hiring non-Russian nationals, explains Schmitt.
However, ofshore attacks are still appealing to malicious actors because their remoteness makes it difcult to catch perpetrators in the act, and it is harder to attribute blame, Schmitt says. “The Russians oftentimes get away with this through non-attribution or unwillingness to attribute if there is enough evidence or if there's simply not. In some of the cases, how do you fully prove that that Russian-fagged fshing vessel was operated by the Russian government?” he explains.
An arsenal of distributed renewable ener g y generation sources enhances the resiliency of the network. Although they present challenges for system operators, they also contribute to the flexibility and security of the network in the face of adversity
TEXT HEATHER O’BRIAN
ARMADA
THE CONCEPT OF ENERGY SECURITY
has been taken to an extreme in Ukraine, where the energy ministry and executives of local energy companies regularly appeal to allies for help in strengthening air defence systems to protect power facilities that have increasingly been the target of Russian attacks.
Russian missile and drone attacks on Ukrainian energy infrastructure have been a feature of the war since it began in 2022, but they intensifed in 2024. “Even before an unprecedented wave of attacks in late August, more than two-thirds of Ukraine’s pre-war power generation capacity was not available because it was destroyed, damaged or under occupation,” the International Energy Agency (IEA) noted as it unveiled a ten-point energy action plan for Ukraine to safeguard an essential level of energy services this winter.
Small-scale renewable and storage systems have a key role to play in that plan. “Large energy assets are more vulnerable to attack, so decentralisation brings clear security benefts,” the IEA said. “Accelerating deployment of smaller-scale gas-fred combined heat and power plants, and solar photovoltaic (PV) and wind systems complemented by batteries and other storage technologies is crucial to increase the resilience of supply,” it added.
Since the start of the confict, the Ukrainian government has prioritised deploying decentralised energy sources, including rooftop solar with storage, in administrative buildings, hospitals, schools, households and businesses. Consumer-installed PV has continued to grow during the war, reaching nearly 1500 megawatts (MW) by the start of 2024.
Energy security has also become an in-
creasingly important topic in Europe, as governments scrambled to fnd alternatives to Russian natural gas after the confict erupted in February 2022 and electricity and gas prices shot up.
“There has been a push to move away from fossil fuel imports for many reasons, including energy security and climate,” says Carlos Diaz of research and energy intelligence frm Rystad Energy. “Germany has been leading the way and a lot of the new renewable capacity that is coming online there is rooftop solar, which is reducing fossil fuel consumption and increasing energy security,” Diaz adds.
With companies in Europe paying much higher energy prices than their competitors, energy security has also become intertwined with industrial security issues, notes Vincent Petit of Schneider Electric, an energy management frm.
RESILIENCE IN A STORM
“Energy security isn’t only about buying gas from the United States instead of Russia,” says Naomi Chevillard of the trade association SolarPower Europe. “It’s changing technology, producing locally and integrating batteries.”
The importance of security has come into the spotlight not only due to conficts that have altered fows of energy but also because of disruptive weather events. Between 2011 and 2021, the average annual number of weather-related power outages in the US in-
The afermath of missile atack on Ukrainian power infrastructure
Cost of war
creased by about 78% compared to the previous decade.
When Hurricane Milton struck Florida in October 2024, some three million households were left without electricity. One exception was the Hunters Point “net zero” community in Cortez, 80 kilometres south of Tampa,
where, thanks to a combination of rooftop solar and battery storage, the lights were kept on while neighbouring homes sufered blackouts.
HUGE POTENTIAL
Solar power generation in the European Union increased by 27% to 263 gigawatts (GW) in 2023, as capacity additions continue to be dominated by rooftop applications. The European Union has technical installed capacity potential for additional photovoltaic installations on rooftops, roadsides and reservoirs of over 1000 GW that could generate electricity equivalent to nearly half of the bloc’s consumption in 2022, researchers at the European Commission’s Joint Research Centre in
Three Musketeers
The grid, flexibility and electrification are central to the energy transition, says SolarPower Europe's Naomi Chevillard
GROWING THREAT CYBERSECURITY THE OF
THE DIGITAL AGE BRINGS NEW THREATS TO CLEAN ENERGY GENERATORS.
WHILE MINIMAL DAMAGE HAS BEEN DONE TO DATE, IT’S BECOMING CLEAR WHAT THE BIGGEST THREAT TO ENERGY INFRASTRUCTURE AND RENEWABLES PROJECTS
COULD BE WHEN IT COMES TO CYBERSECURITY: HUMAN ERROR
As the clean energy industry modernises, digitises and expands, so does the potential for cyberattacks on renewable energy projects and grids. “With federal and local legislature(s) advocating for renewable energies, the industry will expand to keep pace, providing more opportunities and targets for malicious cyber actors,” wrote the US Federal Bureau of Investigation in July 2024. Cyberattackers do not, however, particularly target solar and wind projects or other clean energy facilities or companies, says Danish Saleem at the US Renewable Energy National Laboratory’s (NREL) security and resilience centre. “There’s little to no evidence that adversaries target clean energy especially,” he says.
However, more complex technology and more complex grids do increase susceptibility. “The fip side of increasing digitisation is a potential increase [of grids’] vulnerability to cyberattacks,” notes Kristian Ruby of Eurelectric, the European electricity industry association.
Over recent years, there have been a few high-profle incidents involving renewable energy facilities, companies, and the smart grid. Some involve ransomware or malicious software that blocks access to a computer system by encrypting data until a ransom is paid, often in cryptocurrency.
In 2019, developer Norsk Hydro in Norway was hit by the ransomware LockerGoga. The company lost all information technology (IT) infrastructure and its operational technology (OT) was impacted, according to a 2022 report on European cyber breaches by EnergiCERT, the European energy sector’s cybersecurity centre. The hydro generation part of the company maintained supply through manual processes.
A year later, Energias de Portugal (EDP), a utility and one of the world’s largest wind operators, was hit by RagnarLocker ransomware. The attackers stole ten terabytes of data and asked for $10 million in ransom, although the attack did not afect the OT network, said EnergiCERT.
In the same year, Elexon, responsible for balancing Great Britain’s power grid, was hit by REvil ransomware. Internal IT systems and laptops were encrypted, and sensitive data was stolen.
security measures can reduce the risk of a cyberatack
The variability of wind and solar can initially mask a cyberattack that takes an asset ofine or impairs its operation, cautions Sujeet Shenoi at the University of Tulsa, who has become a “cyber cop”, of sorts, for the renewables industry. While, as Saleem suggests, renewables genFirst defence Simple
with Wi-Fi capability. They attached another cable to an open port in the programmable automation controller.
Then, they could halt the turbine using a laptop from a vehicle parked a few hundred metres away. In some cases, they could halt the entire project if the turbines are linked via a private network. “With a $500 product—or cheaper if we design our circuit board— we can stop a $3 million turbine,” Shenoi says.
Shenoi says that physical access to the asset should be limited. Even ofshore turbines, protected by the ocean, tend to have CCTV. If a breach is detected, security personnel can be deployed rapidly, even for a remote project.
NREL's Saleem says there are many ways to ward of cyberattacks. Basic cyber “hygiene”, such as not using a default password for an inverter, ensuring a secure connection between a cloud and gateway, and logging attempts at access, is often cited by experts.
Software and patches must be promptly updated, although that would not have helped in the widely publicised CrowdStrike outage in July 2024. This outage impacted airlines and other companies because the security company issued a fawed software update—a difcult risk to predict.
Intrusion detection software should also be used, though experts stress that cyber attackers may enter and lurk and not act for many months. Network segmentation is important, with one-directional gate-
Service denial Ransomware atacks can hold businesses hostage
ways in some instances. Remote access to an ofshore wind site should be strictly controlled, says DNV’s Huistra. External devices such as memory sticks, laptops or phone chargers should never be attached to the networks. Individuals must be validated before they can access a system.
A company should have a good “incident response capability” so employees can quickly detect what is happening and know how to react and respond. George Washington University’s Oughton says owners and OEMs should also have cyber and brand reputation insurance.
He adds that user authentication for computer ports should be required so an unauthorised device cannot function. A software frewall between each wind turbine should be constructed, and anomaly-detection or behavioural analytics software should be used. Shenoi recommends placing VPN tunnels or encrypted links between turbines and their control centres and employing recommended international standards for project operators.
“The human is the weakest link,” Oughton adds. “An organisation is only as good as its weakest link.” DNV’s Huistra agrees but also says, “The user is often one of the weakest links, but with training, they can become one of the strongest.” Well-trained employees can spot anomalies, he adds. Overall, companies should take cyber security as seriously as they do physical safety, recommends DNV. “But it is a continuous efort since there is no 100% security in our world,” concludes Huistra. •
Broaden your perspective on energ
INSURING TRANSITION
FEW SECTORS ARE AS KEEN ON REDUCING RISK AS THE INSURANCE INDUSTRY AND INSURERS HAVE A VESTED INTEREST IN THE ENERGY TRANSITION AS EXTREME WEATHER EVENTS HIT THEIR PROFITS
TEXT JASON DEIGN · ILLUSTRATION BERNARDO FRANÇA
In October 2009, oil company Shell noticed something amiss at its Egmond aan Zee ofshore wind farm, which it managed alongside Dutch utility Nuon. The grout afxing the wind farm’s turbines to their foundations began to break. Grout was used to cement the connection between an ofshore wind turbine foundation and the transition piece above it. It was a design feature adapted from the oil and gas industry and signed of by standards bodies such as DNV.
But wind turbines rock back and forth much more than oil rigs, and the grout used at Egmond aan Zee was not able to take the strain. Soon, the problem started to emerge at other wind farms that used the same design. By 2010, the analyst frm Emerging Energy Research, now part of S&P Global, had found grouting was dissolving on 60% of Europe’s ofshore wind turbine foundations.
Correspondence obtained from the UK’s government’s energy ministry at the time showed Britain’s RenewableUK industry body thought most of Britain’s 336 ofshore wind turbines could develop the fault, costing £160,000 apiece in repairs.
“We are experiencing the issue at some of our Danish wind farms,” said a representative of DONG Energy—now known as Ørsted. “It is a nuisance to experience this issue in a very busy period for our wind organisation,” they added, “but it also illustrates some of the technical uncertainties we’re exposed to in the ofshore wind industry.”
CLAIMS DELUGE
Ofshore wind’s grout issues were largely resolved through the application of updated design standards, and the problem is now a barely remembered footnote in the industry’s early annals. Other issues followed, including failures with gearboxes, cable protection systems, and more, to the dismay of companies that had insured ofshore wind projects and found themselves facing a deluge of claims.
To the uninitiated, this might not seem a big deal. After all, the insurance industry is there to provide cover for the unexpected, and occasional big payouts are part of the business model.
However, the insurance industry’s relationship with the energy transition is more nuanced than it might look. For insurers, decarbonisation is not just about securing sustainable energy supplies—it’s about the viability of the global economy.
The insurance industry has a vested interest in ensuring the energy transition succeeds because, with-
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