CIRAS FINAL CONFERENCE CBA-Cost Benefit Assessment Katowice, June, 8th, 2016 Reinhard Hutter, CESS Centre for European Security Strategies

The CBA Functional Block Cost-Benefit Analysis Main Parameters Only factors which can be expressed in money! (other factors are treated in the other Functional Blocks) Lifetime (years) Discount rate per year Detailed cost structure Benefits structure Numerical and graphical results

The CBA Functional Block Cost-Benefit Analysis Process Life Cycle Cost model input, including cost For planning and procurement For operation and maintenance Monetary benefits caused by the system Set-up of Cost Structure Modify cost structure (if deemed necessary) Input detailed cost data Calculate results Evaluation Session Numerical results Graphical results Comparison of Alternatives Handover of selected results to the RRA tool Results

Use Case 1 Terrorist threat CBA Application Sample Energy Threats and Security Measures & Alternatives Use Case 1 Terrorist threat Bomb in power plant & Bomb in substation Crisis room Intrusion detection sensor system Screening, training, guards Use Case 2 Criminal threat Sabotage Mantrap & cameras Screening, training, four eyes Use Case 3 Cyber attack Sabotage or criminal or terrorist 3 mixtures of control centre, IT measures, intelligence, training

The CBA Cost Structure Detailed data received from energy provider along this structure: Investment Cost (one time or several increments over time) Planning Procurement Set-up Stocks Operational Cost System operation Maintenance End-of-life-removal Monetary Benefits Reduction of casualties Reduction of damages Reduction of operational cost (if not included in “operational cost”) Insurance, profit, market etc. beneficial effects.

CBA Results Input data and result data are usually presented as cost- profiles over a specified lifetime (e.g. 10 years) Tabular reports with Key Numerical Values, including Total investment Total operations cost Discounted numbers over time Net present values (NPV) Graphics (bar charts and cost-over-time profiles) Trade-off/ break-even point(s)

CBA Result Sample Sample Bar Chart

CBA Time Profiles and Trade-Off 2nd Assumed Attack Net Savings Break-Even Renewal Invest Initial Invest

Net Savings of the SM

Time Profiles and Trade-Off Cyber threat use case(continuous)

Thank you for your attention! Reinhard Hutter Technical Director CESS hutter@cess-net.eu www.cirasproject.eu Co-funded by the Prevention, Preparedness and Consequence Management of Terrorism and other Security-related Risks Programme of the European Union (HOME/2013/CIPS/AG/4000005074)