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Artificial Intelligence could revolutionize energy in LATAM, but first it needs to ramp up cybersecurity
Inroads into new efficient renewables possible, but risks inevitable
Latin America has digitized and embraced automation technologies at a rapid pace in recent years— a trend that sped up considerably during the pandemic in both private and public sectors.
As the region looks towards investment in energy sectors, both sustainable and traditional, Chile and Brazil especially have emerged as regional leaders in incorporating automation and artificial intelligence. But the rapid pace of digitalization has outpaced the country’s electronic defenses, according to the Global Cybersecurity Index, compiled by the UN’s International Telecommunication Union.
And though AI offers a tremendous potential that could bring increased efficiency to power and distribution systems, grid flexibility, improved reliability and safety as well as a score of other real applications, it also comes with increased risk to systems whose development has outpaced the implementation of cyber security protocols.
That vulnerability was on full display last year when Costa Rica’s government, hacked by a Russian ransomware group, completely lost control of all government financial processes. Though ultimately resolved when the ransomware group splintered, the government was paralyzed for nearly three weeks and unable to execute even basic functions like payment of public employees, health system transactions or tax collection.
The episode was a concrete illustration of the vulnerabilities in both private and public sectors in the region.
Francisco Barreto is the president of the international non-profit Latin American Society for Maritime Petroleum Operators (SLOM by its Spanish acronym). The organization promotes the responsible sharing of technology in the energy sector in Latin America.
“Minimizing human error, maximizing transportation and storage efficiency, delivery, avoiding accidents, these are all areas where AI can help the energy sector run a safer and more profitable business model,” he said.
But this technology “must be incorporated along with increased cyber security. And currently, Latin America has fallen behind in that area,” continued.
“The risk of accident or loss by AI managed systems cannot be ignored. All it takes is one human error of oversight, or one click on a malicious link in a vulnerable system to create an ecológical disaster.”
Multiple experts that spoke with Platts explained a number of factors that have contributed to the vulnerability of Latin American electronic systems. There are few incentives for international threat intelligence companies to prioritize Latin America over larger markets in the U.S, Europe and Asia.
Second, most cybersecurity efforts in the region focus only on high-visibility threat actors, rather than emerging ones. But malicious actors, whether state organizations, criminal organizations bent on extortion, or politically motivated “hacktivists” have shown they will attack any vulnerable systems, and the energy sector is a tempting target.
Finally, disparities in development across the region mean that the cybersecurity needs of different countries can vary significantly, and no unifying body has made digital security a regional priority.
Latin America experiences some 1,600 attacks per second, and over 12% of cyber attacks globally, despite representing only 8% of the global population, according to an America’s Quarterly special report on cybersecurity.
“In addition to electronic security risks, there is also risk of mismanagement by AI systems,” said Sebastian Jorducha, a senior representative at Hexagon, an Argentina based company that creates automation software for the energy sector.
“Human oversight is an integral component of these systems,” he said. “Ai has incredible potential to maximize efficiency and make real-time adjustments to energy systems, but all real decision-making processes must be controlled by trained human specialists.”
“In other words,” he continued, “these must be tools that amplify human expertise rather than making it irrelevant.”
Barreto also believes that AI, if used responsibly, can also increase safety conditions on maritime energy platforms as well as shipping. “Automation can remove workers from dangerous situations and conditions,” he said.
“And some dangerous jobs will likely be replaced by machines in the near future. But this growth will also create new employment as well, especially among engineers and automation specialists.”
AI also offers considerable opportunities in renewable energies, according to researcher Victor Meza Jimenez. In a recent paper, Jimenez argues that the technology allows for “renewable resources integration, automated data analysis, fast and intelligent decision-making, efficient demand response, improved generation as well as demand forecast, and cost reduction from optimized operations.”
AI systems can assimilate data much faster than humans, and as energy companies incorporate that technology, they can react and even predict usage trends and responses much more rapidly than non-digitized systems.
“This technology represents incredible potential,” said Barreto, “but some of the hype surrounding AI comes from software engineers who have never stepped foot on a deepwater oil platform, or sales forces from AI companies who have a financial motive to talk up it’s potential.”
“We must be careful to incorporate this tech responsibly in Latin America,” he concluded, “and the first step in doing that responsibly is to raise awareness of cyber security throughout the region.”
The Big Headlines in LATAM,
Last week at PWS we wrote about elections in Guatemala. Bernardo Arevalo, the progressive reform candidate won in landslide, but can he implement changes to the country’s notoriously corrupt system?
Sandra Torres, who lost by nearly 30% has already claimed fraud in the election process, but the claim is unlikely to stick. The Organization of American States released a statement rejecting the accusations, and called for protection of Arevalo, who they said faces possible physical danger from criminal elements deeply embedded in Guatemala’s power system.
What we’re reading
A few months ago we were the first English-language media company to break the news about a crash in cocaine prices in Colombia that has sent communities reeling.
WOLA this week has a deep dive into why that’s happening, and it’s worth reading!
Spanish Word of the Week
¡Calle esos ojos! which would literally translate to “shut your eyes up” but it means something more like “don’t jinx it!” or “don’t even joke about that!”