BIG $$$ IN SECURING THE SMART GRID

Smart Grid Cyber Security; Market Issues, Security Best Practices, and Global Forecasts for Smart Metering, Substation Automation, Distribution Automation, Transmission, and Electric Vehicle Management
Bob Lockhart and Clint Wheelock, 4Q 2010 (Pike Research)

"…If smart grids can realize their full potential, then consumers, utilities, nations…[some] of the major benefits foreseen are…[1] Consumers empowered with information and variable pricing can reduce their energy bills by better managing their energy usage and consuming energy at off-peak times…[3] Demand response and variable pricing can help flatten the peaks in energy consumption, thus reducing the need for new generation, transmission, and distribution capacities…

"…[4] Utilities can more efficiently transmit and distribute power or other commodities via realtime intelligent controls and reduce usage loss or wastage in the process…[5] Nations can better ensure their energy security for the future by making better use of existing resources…[6] More efficient use of existing generation, transmission, and distribution capabilities could mean a decrease in the need for new facilities or transmission capabilities, thereby reducing the expected carbon footprint of utilities…"

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"…[There has been little] consideration for security…This report assesses in detail the cyber security risks of smart grids via two standards…Pike Research has applied appropriate considerations that are specific to each type of network…Two issues that have surfaced repeatedly are…[1] Many industrial control systems, such as supervisory control and data acquisition (SCADA), have remained relatively free from attack simply because they are isolated from corporate networks. Unfortunately, the Stuxnet attackers have solved that…[2] [T]he most common item… is the critical need to help IT and operations teams to collaborate effectively…

"…Pike Research has noticed two other popular trends in the smart grid cyber security market. Compliance [and]…Situational awareness appears to be replacing event correlation as utilities become more interested in understanding events in real time, rather than after-the-fact analysis…[A]dditional cyber security issues that must be addressed [include]…[1] Stronger identity management…[2] Multi-factor authentication on powerful consoles…[3] Computer incident response…[4] Change management, asset management, and configuration management…[5] Business continuity planning…[6] Defense-in-depth for IT and ICS networks…[7] Stronger security on SCADA control systems…[8] More secure interfaces between IT and ICS networks…"

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"…[9] Video monitoring capabilities for substations and control rooms…[10] End-to-end encryption of data from the HAN to the utility central site…[11] Need to prevent worms from spreading through smart meters…[12] Stronger cyber security software on smart meters…[13] Resiliency throughout the advanced metering infrastructure (AMI)…[14] Data integrity for electric vehicle recharging transactions…[15] Data privacy for electric vehicle billing data and recharging transactions

"The smart grid cyber security competitive landscape…[is about to] become quite a bit more competitive…Pike Research believes that barriers to entry are especially high for hardware components…Software and services require less capital investment…Large security and telecom companies seem to have finally noticed…Pike Research’s global forecast for smart grid cyber security revenue through 2015…is $6.49 billion, with a compound annual growth rate (CAGR) of 20.9%…[Y]ear-over-year growth by region and by smart grid application…show classic early industry patterns: a spike in growth percentage in the next two years, then growth rates come back down to earth…"