Summary Bullets:

• The energy sector is complex with a highly interconnected ecosystem. This will impact client organizations’ security posture, often influenced by the inherent nature of their infrastructure.

• Cybersecurity providers, and in particular managed security companies, will need an ‘integrated’ approach to security addressing the energy sector value chain.

Cybersecurity Providers Should Factor in Energy Sector Future Economic Challenges
From a market performance perspective, 2023 continued to be a difficult year for the world’s energy market, with some analysts speculating it to be one of the worst sectors in terms of crises resulting in a cascaded impact effect both economically, globally, and socially. The United Nations Framework Convention on Climate Change (UNFCCC) and the Conference of the Parties to the Convention (COP) continue to strive in ambition and responsibilities as well as identify and assess climate measures. In addition to progressing toward the existing Paris goals, COP28 in Dubai (UAE) gained agreement on a number of areas, covering fast-tracking the move to clean energy sources, cutting greenhouse gas emissions before 2030, delivering money for climate action from richer to poorer countries, and working on a new deal for developing nations.

Summarizing, from an energy vertical perspective, cybersecurity providers need to be mindful of the overall economic dynamics of the energy sector. And looking back three to four years, the COVID-19 pandemic in particular changed the dynamics of the energy sector in segments like sourcing natural gas and electricity, and in some cases, doubled pricing. Also, the low-carbon economy is continuing to develop as a result of the efforts placed by COP initiatives in achieving net-zero emissions. The changing landscape and the impact it has on the energy sector highlights a number of key scenarios moving forward. Some of these include future changes in pricing and the impact of energy sources, state governments’ and energy providers’ relative position to increase decarbonization, and the impact of geopolitics such as Russia’s war in Ukraine.

Align Cybersecurity with Wider Technology Enablement Driving Digital Transformation
The global energy sector, like many other sectors, is gaining momentum in digital transformation. However, the energy sector has been slow off the mark in comparison to other, more-mature segments like manufacturing and automotive. Barriers to slow uptake have historically included the high cost of system implementation in complex energy infrastructure configurations. However, pressures on the sector through increased electricity demand, reduction in greenhouse gas emissions, efficiency improvements, and productivity enhancements are driving technology innovation in areas covering AI/ML, blockchain, IoT, cloud computing, security, and 5G as means to improve businesses performance and operational processes, reduce risks and costs, and increase revenues.

An Integrated Approach Across the Value Chain Will Be Required by Cybersecurity Providers
The energy sector is complex and consists of a highly interconnected ecosystem, with different players at various levels in their security journey. These sector market dynamics will require cybersecurity providers, and in particular managed security providers, to have an ‘integrated’ approach to security across the energy value chain. This will require providers to proactively lead through a consultative-led approach utilizing their strong professional service credentials, homing in on risk management and business alignment. Security providers should also be mindful of energy companies’ ambitions in reaching net-zero emission commitments influenced by COP initiatives, state governments, and their own position to increase decarbonization. Strategic tactical considerations for large managed security providers (i.e., large systems integrators, telcos, and vendors) include devising ways in how proliferation of digital devices could support client net-zero commitments. This is addition to providers own net-zero goals under their environmental, social, and governance (ESG) remit.