Utilities Worry About Smart Meter Cyber Security, Investments In Solutions to Hit $1.6 Billion


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Cyber security for the smart grid is no small matter. Experts have been warning for years about the many ways in which hackers could shut down an integrated grid, and smart meters are are one of the weakest links so far, the threat exacerbated by the mass deployment of meters before strong security measures have been put in place. On the one hand, we need smart meters distributed to be able to launch a smart grid. On the other hand, we need them to be as solidly defended as possible. And this is why Pike Research estimates that worldwide, investment in smart grid security will top $1.6 billion in the next five years, an estimate that more than doubles the research group's estimate on smart grid security spending made just last year.
Pike Research states that security concerns have intensified among utilities as smart meters are deployed, realizing that the meters are a weak link for the security of grids as a whole. Utilities like Pacific Gas & Electric and Southern Edison have been aggressive in rolling out millions of smart meters, even running into some protest from consumers, but it looks like they are the rare exception among utilities that are increasingly antsy about how the meters will impact grid security.

"Smart meters, which utilize two-way communications to improve energy management, automation, and control on the grid, have often been rolled out to customers with little forethought about the potential security risks. This initial oversight is now being addressed with greater urgency within the industry," states the research firm, which is why they've looked again at investments and decided that the current forecast for global smart meter security spending will top $1.6 billion from 2010 to 2015.

Last June Pike Research reported an estimate that security would be the next big boom in smart grid research spending, and investments would rise to $21 billion globally by 2015, with North America spending the most with a prediced $1.5 billion by 2015, followed by Asia Pacific at $1.2 billion and Europe at $784 million.

Now it is clear that smart meter security itself will comprise a significant chunk of that estimated $21 billion.

"It would be naïve to think that smart meters will not be successfully attacked. They will be," cautions senior analyst Bob Lockhart. "In fact, smart meters represent a worst-case scenario in terms of security: the devices lack sufficient power to execute strong security software; they are placed in physically non-secure locations; and they are installed in volumes large enough that one or two may not be missed. Therefore, the only valid cyber security approach for smart metering is to assume from the outset that some devices will be successfully attacked and create sufficient resiliency to allow the remainder of the network to survive."

The research firm notes that network resiliency and security software on meters will be the two big business opportunities, with other areas of interest including meter worm prevention, identity management and authorization, and data encryption. Pike Research also notes that several companies are actively working on solutions right now.

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Tags: Computing | Utilities