Discussing Energy Economics on the Internet

Grid Under Attack

Posted in Electricity Transmission,USA Federal by Cheryl Morgan on the April 8th, 2009

Today’s issue of the Wall Street Journal has a major article about cyber-attacks on the US electricity grid. Apparently spies from a number of countries, including Russia and China, have been covertly hacking into electricity systems in the US.

The espionage appeared pervasive across the U.S. and doesn’t target a particular company or region, said a former Department of Homeland Security official. “There are intrusions, and they are growing,” the former official said, referring to electrical systems. “There were a lot last year.”

Thus far no damage has been reported, and the hacking activity appears to have been more of a scouting mission than an all out attack. However, officials worry that malware may have been left behind and could be activated in the event that hostilities break out.

The other major problem is, of course, working out who is attacking you:

It is nearly impossible to know whether or not an attack is government-sponsored because of the difficulty in tracking true identities in cyberspace. U.S. officials said investigators have followed electronic trails of stolen data to China and Russia.

Russian and Chinese officials have denied any official involvement in the attacks.

Although attacks of this type have been going on for some time, it is probably no accident that the WSJ has chosen to report them now. The Smart Grid movement is finally managing to get some traction, and one of many questions being asked is whether there should be an open standard for supply of equipment, or if instead a single company should be tasked with developing a secret and supposedly hack-proof technology. The WSJ acknowledges this in a supporting article that asks whether the Smart Grid would help repel attackers, or open the door to them.

At one level this is just another one of those traditional Washington arguments where a big business tries to persuade Congress that it needs to be granted monopoly control of some aspect of the economy under some pretext or other. However, in this case the pretext could be worryingly wrong, because open standards may be the best solution.

Last week security expert Bruce Schneier worried about who should be in charge of cybersecurity in the US. He pointed out that organizations like the NSA tend towards paranoia and, if given sweeping powers, will be tempted to use those powers against imagined internal enemies rather than external ones. In addition security organizations like the NSA often have an incentive to preserve back doors in systems so that they can use them themselves, rather than plug them so that others cannot.

The main point, however, is that security systems can never be made hack-proof. As technology journalist Cory Doctorow explains, discussing a rather different area of business, the only way to be sure that a security system is actually unbreakable is to make it public and let enthusiastic hackers try to break it. Contests such as this one held last month to test the security of web browsers do far more to keep our computer systems secure than bureaucratic secrecy.

Europe Invests in Africa

Posted in Africa,Electricity Transmission,Europe,Gas Transmission/Storage,Renewables by Cheryl Morgan on the September 9th, 2008

EurActive reports on a major European Union initiative to invest in the African energy sector. The €600 million will go to a variety of projects including renewable generation, power pools and infrastructure projects. A further major announcement is expected soon on the subject of the proposed Trans-Saharan Gas Pipeline. This is intended to bring up to 30 billion cubic metres of Nigerian natural gas across more than 4,300km of desert to EU markets via Algeria. It would also, of course, significantly reduce Europe’s dependence on Russia for gas supplies.

The primary source of all these handouts is something called the European Development Fund, which is of course abbreviated to EDF. Any resemblance to a French energy company is entirely coincidental, if somewhat amusing.

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The Cost of Maintenance

Posted in California,Electricity Transmission by Cheryl Morgan on the September 8th, 2008

A report issued by the California Public Utilities Commission (CPUC) last week could spell major trouble for San Diego Gas & Electric (SDG&E) and Cox Communications. Last year a number of major wildfires hit the San Diego area, causing widespread damage. Two people died in the fires, and 1,347 homes were destroyed. An investigation by the CPUC’s Consumer Protection & Safety Division puts the blame firmly on inadequate maintenance of transmission wires and cites both SDG&E and Cox as having been in breach of general orders covering required levels of safety. The full report is available from the CPUC web site, and the San Diego Union-Tribune has detailed reports here and here.

SDG&E and Cox are, of course, denying any wrong-doing, and may yet be proved innocent. However, the cost of dealing with the case is still likely to be enormous. There are clear risk management lessons here for other utilities.

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Baltic States to Join NordPool

Posted in Electricity Transmission,Nordic by Cheryl Morgan on the September 5th, 2008

As of July 1, 2009 Latvia, Estonia and Lithuania will be able to trade power on NordPool. The expansion of the market is a result of the building of Estlink, a submarine transmission link between Estonia and Finland. Energy Business Review has more details.

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Gustav Hits the Wires

Posted in Electricity Transmission,Louisiana by Cheryl Morgan on the September 3rd, 2008

Prior to Hurricane Gustav’s arrival in Louisiana, most of the energy-related discussion had been about oil & gas – the shut down of rigs and the threat to the transportation and refinery infrastructure. Although we seem to have been spared most of the feared problems, electricity transmission systems have been failing all over the state. Platts reports that almost half of the state’s customers were without power after the hurricane passed.

There are knock-on effects from that. Gas stations rely on having electricity to be able to operate pumps, so without electricity road transport is hobbled. The Seattle Times reports concerns over a dozen hospitals that are running off backup generators and urgently need fuel supplies. Patients are having to be airlifted out because the hospitals have no air conditioning. The availability of fresh water is probably also being affected by lack of electrical power. Governor Jindal has said that electricity supply is the single biggest issue in getting the state back on its feet.

Most of the electrical infrastructure in Louisiana is owned by Entergy, who say that 191 power lines and 210 substations are in need of repair. There are serious concerns about the stability of the system around New Orleans which has currently been isolated from the rest of the grid because so much of the connecting transmission is out of commission. Reuters has details.

Update: Platts now reports that 55%of Louisiana customers are without power, and that the hurricane has also caused significant outages in Mississippi and Arkansas.

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Loop Flow Updates

Posted in Electricity Transmission,USA Federal by Cheryl Morgan on the August 27th, 2008

Energy Legal Blog has their say on the issue, and Platts reports on new measures taken by NYISO to combat future attempted scams.

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NordPool and Germany Link Up

Posted in Electricity Transmission,Europe,Germany,Nordic by Cheryl Morgan on the August 26th, 2008

According to EurActive the European Commission has approved a deal for a Northern European energy market that would link the Nordic region to Germany. The European Market Coupling Company will provide congestion management services and transmission rights trading to companies operating in NordPool and EEX. The deal is due to be finalized on September 29th.

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Loop Flow Scam Update

Posted in Electricity Transmission,USA Federal by Cheryl Morgan on the August 26th, 2008

Over at Knowledge Problem, Michael Giberson has an update to the story about the artificial congestion scam that affected NYISO and PJM. Giberson quotes Power Markets Week as saying that FERC is indeed conducting an investigation into the affair. Whether something will be done about it is another matter. PMW says:

Getting something like multiregional coordinated dispatch could solve a number of these issues, sources said, however the move would be extremely difficult because RTOs would lose some autonomy with a super pool, and states may be reluctant to give up some control.

Also, sources said some participants, particularly generators, may be reluctant to see better coordination because it may take away some profitable opportunities such as when price spikes occur across RTO borders.

And then someone will come along and claim that this is a clear case of “market failure”.

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Further Blackout Reactions

Posted in Electricity Transmission,USA Federal by Cheryl Morgan on the August 15th, 2008

Other people’s commentary on the blackout anniversary can be found at the following sites:

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Blackouts: An Unsolved Problem

Posted in Admin,Electricity Transmission,USA Federal by Cheryl Morgan on the August 14th, 2008

Five years on from the great East Coast blackout of 2003, Scientific American revisits the issue and asks is we are any closer to finding a cure for such occurrences. Worryingly, despite all of the talk of reliability standards and smart grids, it appears that we are not:

If the standards have reduced the number of blackouts, the evidence has yet to bear it out. A study of NERC blackout data by researchers at Carnegie Mellon University in Pittsburgh found that the frequency of blackouts affecting more than 50,000 people has held fairly constant at about 12 per year from 1984 to 2006. Co-author Paul Hines, now assistant professor of engineering at the University of Vermont in Burlington, says current statistics indicate that a 2003-level blackout will occur every 25 years.

You can find the original research here (Look for the paper called “Trends in the History of Large Blackouts in the United States”.). A password is required, but it is relatively straightforward to obtain. And the conclusions of the paper are actually somewhat stronger than Scientific American reports. By some of the measures used, the frequency of blackouts is actually increasing slightly.

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