Utility Week

UTILITY WEEK | JUNE 2022 | 13 Energy likelihood and impact were multiplied to reveal what are seen as the biggest risks for utilities as a whole. Cybersecurity was the number one risk factor, according to the survey results. As both water and energy sectors look to digi- talise and introduce more devices on to their networks, such as monitors and sen- sors, this would only increase risks, they said. The move to open data also increases security risks. Across the board, those interviewed felt that policy and regulation is not keep- ing pace with technological development, and the need to decarbonise represented a major risk, particularly for those from gas networks. These companies faced existen- tial threats to their businesses, and con- tinued uncertainty in heat policy and how this would evolve was making it impossible to plan for investment in their future. As interviewees also pointed out, the plethora of storms the UK was already experiencing was a sign of things to come, which would test the resilience of ageing infrastructure if investment was not boosted in forthcoming price reviews. TOP 5 RISKS 1. A serious cybersecurity breach. 2. Policy does not develop fast enough or lacks the necessary detail to enable utili- ties to invest. 3. Regulation does not adapt quick enough to match the demands on utilities. 4. Increasing extreme and unpredictable weather. 5. Prices for essential resources rise unsus- tainably on global markets. To see the Top 10 risks as well as analysis on each topic, download the full report free at https://utilityweek.co.uk/uk-utilities-risk- report/ where you can also read our in-depth analysis of all five potential areas of risk. Here, we present the report's deep dive into digital and security risks. Digital and security risks Cybersecurity and other threats Cybersecurity came out top as the biggest risk to utility firms, taking into account the likelihood of firms suffering a cybersecurity breach and the potential impact on the busi- ness. Nearly eight out of ten (77%) regard a serious cybersecurity breach as a high-risk factor and 85% said that this would have a major impact on the business. The average score for these risks factors was 4 and 4.3. The results of the survey were Q: How likely are the following to become a risk factor over the next five to 10 years? Overall Energy Energy Water % likely / extremely likely to become a risk networks retailers companies A serious cybersecurity breach 76.9% 75.0% 62.5% 83.3% An inability to manage growing digital complexity 38.5% 37.5% 25.0% 50.0% Harm through direct action 28.2% 43.8% 25.0% 8.3% Terrorism 12.8% 12.5% 12.5% 0.0% Other major security risk 17.9% 25.0% 12.5% 8.3% Q: Assuming these risks became a reality, what would be the likely impact on your business? Overall Energy Energy Water % high / extremely high impact on business networks retailers companies A serious cybersecurity breach 84.6% 93.8% 62.5% 83.3% An inability to manage growing digital complexity 43.6% 50.0% 25.0% 41.7% Harm through direct action 53.8% 81.3% 25.0% 33.3% Terrorism 61.5% 75.0% 37.5% 66.7% Other major security risk 46.2% 68.8% 12.5% 41.7% Q: How likely are the following to to 10 years? A serious cybersecurity breach An inability to manage growing digital complexity Terrorism Other major security risk Digital & Security: likelihood to become a risk Overall average likelihood: 3.10 1 5 2 3 4 Average likelihood: 4.03 Average likelihood: 3.18 Average likelihood: 2.82 Average likelihood: 2.64 Average likelihood: 2.85 2.6% 20.5% 76.9% 25.6% 35.9% 38.5% 38.5% 33.3% 28.2% 43.6% 43.6% 12.8% 33.3% 48.7% 17.9% Q: Assuming these risks became a reality, what would be the likely impact on your business? A serious cybersecurity breach An inability to manage growing digital complexity Terrorism Other major security risk Digital & Security: likely impact of risk Overall average impact: 3.68 1 5 2 3 4 Average impact: 4.33 Average impact: 3.41 Average impact: 3.46 Average impact: 3.79 Average impact: 3.41 5.1% 10.3% 84.6% 15.4% 41.0% 43.6% 23.1% 23.1% 53.8% 15.4% 23.1% 61.5% 20.5% 33.3% 46.2% continued overleaf in association with

• Cover