Optimizing Cyber Insurance and Defense for Multi‐Energy Systems Under False Data Injections

This article introduces a novel cyber insurance planning model specifically designed to enhance the resilience of information and communication technology (ICT)‐integrated multi‐energy systems (MES) against cyber threats, particularly false data injection (FDI) attacks. The proposed hierarchical cyber insurance planning model (HCIPM) offers an integrated approach to managing the dual challenges of financial risk and operational disruptions caused by sophisticated cyber‐attacks. The model is built upon a two‐stage hierarchical optimization framework: the first stage determines the optimal allocation of cyber insurance to minimize costs while ensuring adequate risk coverage, and the second stage focuses on real‐time operational defense strategies, such as load shedding and resource management, to mitigate the impact of cyber incidents. A key innovation of the HCIPM is its incorporation of a distributionally robust optimization (DRO) methodology, combined with Conditional Value at Risk (CVaR), to effectively handle the uncertainties inherent in FDI attack scenarios. By representing extreme events and their probabilities, this framework ensures robust decision‐making under high uncertainty. Extensive simulations conducted on a 33‐20 node distribution system demonstrate the efficacy of the proposed model. Results indicate that the HCIPM achieves a 35% reduction in load shedding costs and a 28% improvement in resilience metrics, such as system recovery time and operational continuity, compared to traditional approaches. Additionally, the model demonstrates a significant decrease in financial losses attributable to cyber‐attacks, with a 40% reduction in economic damages across high‐risk scenarios. The findings underline the model's capability to not only reduce operational costs but also enhance system stability and resilience under diverse attack scenarios. By integrating financial mechanisms such as cyber insurance with technical defenses, the HCIPM represents a comprehensive solution for managing cyber risks in critical infrastructure. This research bridges the gap between operational resilience and financial protection, offering a pioneering framework for future applications of cyber insurance in power systems and other critical infrastructures. The proposed model provides a scalable and adaptable strategy, making it an invaluable tool for utilities and policymakers in their efforts to safeguard modern energy systems against evolving cyber threats.