The cyber vulnerabilities of Latin America's renewables sector

By Edwin Sabogal, cyber regional manager for Latin America at Aon

As the transition to cleaner energy sources gains momentum worldwide, Latin America is emerging as a key player in renewable energy generation. With an energy matrix increasingly composed of sources like wind, solar, and hydropower, the continent already sources 59% of its electricity from clean energy, aiming to reach 70% by 2030, according to data from the Latin American Energy Organization (OLADE).

However, as these energy sources expand, companies in the sector face a growing challenge: the rise of cyberattacks. With the digitalization of energy infrastructure and the increasing interdependence of systems, digital vulnerabilities become more apparent, exposing operations to significant threats.

A Sector Under Attack

In 2022, approximately 39% of cyberattacks against companies in Latin America were carried out by hackers or intrusions, while 37% involved unauthorized access. In the renewable energy sector, these vulnerabilities become even more critical, as any disruption can result in billions of dollars in losses and impact millions of people who rely on these services.

Attacks on this sector tend to be sophisticated, with a significant increase in incidents involving ransomware, which paralyzes operations and demands large ransom payments. These incidents directly affect critical infrastructure, such as wind, solar, and hydropower plants, leading to disruptions in essential services.

Cyber Threats and Economic Impact

In Latin America, the economic impact of cyberattacks on the energy sector can represent up to 1% of the region’s annual GDP, potentially reaching 6% if critical infrastructure is compromised. Therefore, companies must act urgently to mitigate these risks and protect their operations.

The region is particularly vulnerable due to factors such as supply chain management fragility, limited corporate resilience, and a lack of investment in application security. Additionally, only 10 of the 33 Latin American and Caribbean countries are above the global average in the Global Cybersecurity Index, highlighting the existing gap in protection against these threats.

Solutions and Collaboration

Protecting the renewable energy sector against cyberattacks requires an integrated risk management approach. Companies are learning the importance of coordinating efforts between the Chief Information Security Officer (CISO), Chief Risk Officer (CRO), and Chief Financial Officer (CFO) to improve corporate governance and strengthen their defenses.

The role of insurers is also crucial in supporting companies amidst rising risks. In recent years, insurers have enhanced their offerings, developing more comprehensive solutions to address the complexity of cyber threats. This includes strengthening coverages like cyber insurance, which protects against financial losses and reputational damage resulting from attacks, and business interruption insurance, which helps mitigate the impacts of operational downtime.

These tools are essential for renewable energy companies to continue their operations even in adverse situations. Insurance not only provides financial protection but also encourages continued investment in a sector facing great challenges yet offering significant opportunities.

The Importance of Artificial Intelligence

Artificial intelligence (AI) has also proven to be a valuable ally in the renewable energy sector, helping to optimize processes and predict failures before they cause significant interruptions. Process automation and predictive analysis are key for companies to anticipate problems, improve supply chain management, and reduce operational costs.

Despite AI advances, cybersecurity remains a crucial component of business strategy. AI implementation must align with strong cybersecurity measures to ensure that new technologies do not become an additional weak point.

Renewable energy companies in Latin America play a vital role in the global energy transition, but at the same time, they face an increasingly challenging cybersecurity landscape. Protection against digital attacks is not just an operational necessity but a strategic imperative to ensure the continuity of services and the region’s energy security.

It is essential for the sector to adopt a proactive stance on cyber risk management by investing in robust security solutions and collaborating with experts who can provide the best guidance. Only then will the renewable energy sector continue to grow sustainably and securely, protecting its operations and ensuring Latin America's energy future.

Disclaimer: This content is the sole responsibility of the author and does not necessarily reflect the opinion of BNamericas. We invite those interested in participating as a guest columnist to submit an article for possible inclusion. To do so, contact the editor at electric@bnamericas.com