Terrorists or hackers taking down the U.S. power grid using a computer virus sounds like the plot of a Hollywood movie (in fact, it played a major role in “Die Hard 4”). Unfortunately, it’s a very real threat and one that security experts have been warning about for years.
In fact, since 2000, there have been 15 power grid problems that could have been cyberattacks, according to Reuters. Many power stations run on older hardware and software that’s vulnerable to viruses and other targeted hacks.
Unfortunately, many industries have a wait-and-see attitude toward security. They’re gambling that the costs of cleaning up after an attack are lower than the costs of preventing the attack.
That’s why the University of Cambridge Centre for Risk Studies and the famous insurer Lloyd’s of London put together a plausible blackout scenario to explore the costs. Here’s what they found.
In the scenario, which sees a loss of power to 93 million people in New York and Washington, D.C., there is “a rise in mortality rates as health and safety systems fail, a drop in trade as ports shut down and disruption to transport and infrastructure.”
At a minimum, this could cost the U.S. $243 billion over a five-year time period. In a more extreme version of the scenario, where 100 generators go offline, the cost to the economy tops $1 trillion.
Interestingly, the study puts insurance industry losses at only $70 billion, which means energy companies are going to be paying a lot out of pocket.
I haven’t done the calculations, but I’m willing to bet that the energy industry would be better off spending a little money now to beef up security, rather than having to fork out billions later.
Hopefully, now that the insurance industry sees the risk, it will strongly encourage its clients to upgrade their infrastructure before it’s too late.