July 6, 2016

The InsuLogix® VAULT

As the modern world becomes increasingly “wired”, more critical systems and infrastructure are linked via the internet. While that has given rise to incredible new...

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As the modern world becomes increasingly “wired”, more critical systems and infrastructure are linked via the internet. While that has given rise to incredible new technology efficiency and capability, it has also meant that more countries are vulnerable to hacking and cyber attacks.

In a recent briefing to the U.S. House Permanent Select Committee on Intelligence, NSA Director Navy Admiral Michael Rogers told the House that a number of foreign governments had already managed to penetrate U.S. energy, water and fuel distribution systems, which has potential to damage essential services.

As recently as December 23, 2015 Ukrainian Power Companies experienced unscheduled power outages leaving 700,000 people without power. Public reports indicate that the Black Energy (BE) malware was discovered on the company’s networks. A report by Bloomberg News noted a cyber attack which caused a British Petroleum owned gas pipeline in Turkey to explode. At the time, this pipeline running from Baku-Tbilisi-Ceyhan was thought to be one of the most secure in the world. In December 2014, amid the much publicized massive hack of Sony Pictures by North Korea, the German government released a report describing a successful cyber attack that infiltrated the industrial controls of a German steel mill. The report said the attack caused “massive” damage by making it impossible to shut off the blast furnaces and at the same time over working and sacrificing the life of the furnace transformer that supports the mill.

As Admiral Rogers stated: “This is not theoretical, this is something that is impacting our nation and those of our allies every day.”

In today’s world, reliability in our electrical grid requires cyber security. A cyber attack on devices that protect and control equipment in the electrical grid could result in significant outages and damage to equipment. This is especially true for Substation Class Medium and Large Power Transformer (LPT). LPTs are custom-designed equipment that entail significant capital expenditures and long lead times due to intricate procurement process. Pricing varies by size and manufacturer but such units can cost millions of dollars and weigh between 100-400 tons. Procurement and manufacturing is a complex process that could extend lead-times to 20 months. Although the cost of replacing transformers can be considered substantial, it pales in comparison to an actual outage in a large city when multiple units are taken down.

Protecting transformers from cyber attack should be a top priority for the owner of these critical assets.

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