An Insurance Framework for Cyber-Physical Power Systems Considering Integrated Cybersecurity-Reliability Assessment

Abstract

Due to the development of cyber-physical systems for modernizing power grids, vulnerabilityassessment has become an emerging focus in power system security studies. With the increasing application of cyber-enabled technologies in power systems, modern power system is prevalently exposed to a wide gamut of cybersecurity threats. In this dissertation, the power supply reliability is evaluated considering the strategic allocation of defense resources and smart technologies. The optimal mixed strategies are formulated by the Stackelberg Security Game to allocate the defense resources on multiple targets subject to cyberattacks. Smart monitoring with preventive and corrective measures is able to boost the substation availability against cyberattacks. A stochastic job-assignment strategy is also deployed to distribute the control and monitoring tasks to multiple threads to reduce the execution failures. In the case studies, it can be observed the intrusion tolerance capability of the Supervisory Control and Data Acquisition system provides buffered residence time before the substation failure to enhance the network robustness against cyberattacks. Finally, this dissertation proposes novel actuarial insurance principle designs, for either a third-party insurer or a mutual insurance platform, as financial instruments to hedge against individual cyber risks of the transmission operators via reliability implication analysis. The indemnity which covers the cyberattack-induced losses complies with the budget sufficiency. The proposed insurance premium principles tested via case studies demonstrate its mechanism for investments on enhancing the power grid cybersecurity.