Title: Risk Governance Strategies for Critical Infrastructures
Citation: European Electricity Market EEM '06
Publisher: Technical University of Lodz
Publication Year: 2006
JRC N°: JRC32821
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC32821
Type: Articles in periodicals and books
Abstract: This paper aims at raising awareness on the theme of governance, especially applied to the risks of complex critical infrastructures and with particular reference to the European context and its electric power infrastructure. As a consequence of the recent economic and technological changes, the potential risks menacing critical infrastructures have become more urgent and crucial for society. On the one hand, the deregulation of markets has forced the unbundling of the once vertically integrated power companies, significantly augmenting the number of actors and dispersing the responsibilities on the assessment and management of risks. On the other, the increasing use of the international electricity interconnectors across countries, for satisfying the demand and the transactions in the power exchanges, hasn’t been accompanied by a parallel development of the physical systems. As a matter of fact, interconnectors are being used for operations that were not foreseen by their original design, opening serious questions about their capacity to sustain in a reliable way the new requirements. In addition, the pervasive adoption of information and communication technologies (ICTs), while allowing the achievement of greater levels of efficiency, functionality and quality of service, have introduced new vulnerabilities that can be exploited by malicious attackers. In this situation, new scenarios of risk have arisen: e.g. security issues from the connectivity to open information networks, complexity of the European power grid as an extended system-of-systems interconnecting the national networks, where each single industrial or regulatory actor has only a partial view of the overall risk situation. Risks to infrastructural systems used to be a management problem for rather isolated monopolies, and a regulatory problem for single governments. Now the increased interconnectivity and number of linkages among systems involves a multiplicity of stakeholders connected to one another and affected by cascading effects. Infrastructures are generally run by a number of interrelated companies, with no one able to handle the risks by itself alone. Moreover, as infrastructures cross borders in their interconnections, the power that each government can exercise is limited. The key question for an infrastructure such as electric power concerns the responsibilities with respect to the assessment and management of risks in a multinational scenario. Current regulations do not appear to be able to provide a thorough answer to the new situation fro the risk viewpoint. Such a context requires an answer that is better described with the concept of governance, in which the approaches, interests and concerns of all stakeholders are taken into consideration in dealing with the described complexity. Risk governance thus emerges as the most proper way to deal with the risks of infrastructures. The arguments that support this statement, developed in this paper, regard first the characterisation of risk of complex critical infrastructures (i.e. electric power infrastructures) and the reasons that lead to consider the concept of governance and its peculiarities, with particular reference to risk governance versus risk management. In such a vision, a risk governance process, exemplified in its main steps is described. In such a vision, a proposal for the constitution of a European Council for the Security of Electric Power (ECSEP), a decision-oriented and voluntary association of European Critical Electricity Infrastructure (ECEI), is formulated. The US experience is taken as a useful example of reference. Keywords: Risk governance, critical infrastructures, risk management, uncertainty, deregulation, technological changes
JRC Directorate:Space, Security and Migration

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