Securing Smart Grids Will Require a $4.1 Billion Investment by 2018

Increasing risks to the electrical grid will require utilities to invest a total of $4.1 billion between 2011 and 2018 in cyber-security for industrial control systems, research firm Pike Research said Aug. 23. The investments will be part of the larger upgrade to the nation’s energy grid, which include the installation of smart meters.

In Pike’s report, "Industrial Control Systems Security," the clean-tech market intelligence firm analyzed the market for industrial control systems (ICS) for smart grids as well as performed an assessment of the major risks facing smart grids. The cyber-security investments will increase at a relatively steady rate over the next seven years, rising from $309 million in 2011 to $692 million annually by 2018, Pike said in its forecast.

“The smart grid changes everything, but when it comes to cyber-security issues, much of the story remains the same,” said Pike Research senior analyst Bob Lockhart.

In the past, electrical grids were controlled by electro-mechanical and pneumatic devices. Today, they are controlled by computers running either Windows or Linux operating systems on standard IP networks, according to Pike. Wireless and Bluetooth capabilities are being added to supervisory control and data acquisition (SCADA) devices that are integral to the grid backbone’s day-to-day operations. While the technology is intended to make utilities more efficient, they also open up a plethora of risks because these systems are no longer isolated within the facilities, Pike said. They are now directly accessible from the Internet and can no longer rely on the facility’s perimeter defenses.

The discovery of the Stuxnet worm highlighted the security vulnerabilities in electrical grids and other critical infrastructure, as well as the "fragility" of SCADA systems, Lockhart said. "Nearly overnight, ICS security went from being a non-issue to being critical," he said.

Investments in ICS security will include control consoles and systems, telecommunications security, human-machine interfaces, system sensors and collectors, Lockhart said. The enhancements will benefit areas such as distribution automation, substation automation and transmission upgrades, according to the report.

The investments will also create new professional opportunities, such as development and maintenance of security reference architectures for utilities’ control networks, development of security policies and procedures, maintenance of employee security awareness programs for ICS and change management, the firm said.

To read the original eWeek article, click here: Electric Utilities Investing $4.1 Billion by 2018 to Secure Smart Grids

CIO Insight Staff
CIO Insight Staff
CIO Insight offers thought leadership and best practices in the IT security and management industry while providing expert recommendations on software solutions for IT leaders. It is the trusted resource for security professionals who need network monitoring technology and solutions to maintain regulatory compliance for their teams and organizations.

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