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Smart Grid Cyber Security Spending Expected to Spike

As the United States and other countries prepare for the transition to a smarter electrical grid, the industry focus has been on getting smart grids themselves up and running, often with little consideration for cyber security issues.

As the United States and other countries prepare for the transition to a smarter electrical grid, the industry focus has been on getting smart grids themselves up and running, often with little consideration for cyber security issues.

According to Alastair MacWillson, global managing director of Accenture’s global security practice, there’s great reason to be optimistic about the benefits of the smart grid. “Consumers would be given more insight into their energy usage, costs to the utility and their customers will drop as the system becomes more efficient and most importantly, we’ll conserve resources as we reduce the amount of wasted energy,” MacWillson says.

But Accenture’s global security head warns that there’s reason to be cautious and concerned about the threat of cyber attacks that such a system could become vulnerable to. “As utilities transform from simple one-way power grids to complex, bidirectional smart grids, they will soon be passing sensitive consumer information about identity and usage patterns over their networks. They must undergo a significant transformation in order to secure such a network from attacks,” MacWillson wrote in a recent SecurityWeek column on securing the smart grid.

A report released today by Pike Research finds that investment in securing the grid from malicious attacks, natural disasters, and other accidents is picking up pace. The market intelligence firm expects that smart grid cyber security spending will increase 62% between 2010 and 2011, and by 2015 the annual worldwide market spending in this critical sector will reach $1.3 billion.

“Smart grid cyber security is significantly more complex than the traditional IT security world. It is a common misperception that IT networks and industrial control systems have the same cyber security issues and can be secured with the same countermeasures. They cannot,” says senior analyst Bob Lockhart. “To successfully secure the electrical grid, utilities and their key suppliers must design solutions that effectively bridge the worlds of information and operations technology.”

Releated Column: How to Make the Smart Grid Smarter than Cyber Attackers

Lockhart adds that effective smart grid cyber security deployments will address a wide variety of key issues, including:

• Stronger identity management

• Multi-factor authentication on powerful consoles

• Computer incident response

• Change management, asset management, and configuration management

• Business continuity planning

• Defense-in-depth for IT and ICS networks

• Stronger security on SCADA control systems

• More secure interfaces between IT and ICS networks

• Video monitoring capabilities for substations and control rooms

• End-to-end encryption of data from the home area network (HAN) to the utility central site

• Need to prevent worms from spreading through smart meters

• Stronger cyber security software on smart meters

• Resiliency throughout the advanced metering infrastructure (AMI)

• Data integrity for electric vehicle recharging transactions

• Data privacy for electric vehicle billing data and recharging transactions

• Security awareness education for all affected employees

Over the next few years, Pike Research anticipates that growth in the smart grid cyber security market will produce opportunities not only for hardware and software sales, but also for a number of new professional services opportunities. These service offerings will help utilities navigate the minefield of threats and challenges that pose fundamental risks to the integrity of the grid infrastructure.

Releated Reading: “Smart” Power Grids a Prime Target in Cyber Warfare

Written By

For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.

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