Smart grid security to become multibillion-dollar industry

Report predicts that a total of $21 billion worldwide will be spent on cybersecurity for smart grids between 2010 and 2015.

Candace Lombardi
In a software-driven world, it's easy to forget about the nuts and bolts. Whether it's cars, robots, personal gadgetry or industrial machines, Candace Lombardi examines the moving parts that keep our world rotating. A journalist who divides her time between the United States and the United Kingdom, Lombardi has written about technology for the sites of The New York Times, CNET, USA Today, MSN, ZDNet, Silicon.com, and GameSpot. She is a member of the CNET Blog Network and is not a current employee of CNET.
Candace Lombardi
2 min read

Investment in security for smart electrical-grid systems will grow tremendously over the next five years, according to a report released Wednesday by Pike Research.

Research analyst predicts total of $21 billion worldwide will be spent on cybersecurity for smart grids between 2010 and 2015.

With the U.S. electrical grid--and other national grids worldwide--poised to become smart systems with integrated communications, the possible threat of sabotage has become an obvious concern. To that end, the U.S. government has set aside funding to develop security protocols. Others are following suit.

Between 2010 and 2015, the report predicts, about 15 percent of all smart grid investments will be spent on cybersecurity. This will represent a total global investment of $21 billion over the next five years, according to the report.

North America will spend the most with a predicted annual figure of $1.5 billion by 2015, followed by Asia Pacific at $1.2 billion and Europe at $784 million.

The prediction is not especially surprising. Evidence collected in 2009 found that the U.S. electrical grid is vulnerable to sabotage and that it had been compromised by hacker spies testing the smart grid system's access. Since then, there has been a major push by government and industry experts to better secure smart grids.

"Despite the increased emphasis, the lack of interoperable cybersecurity standards continues to be a major issue," according to the report.

The National Institute of Standards and Technology is being pushed by the U.S. Department of Energy and the Federal Energy Regulatory Commission to develop standards that can be integrated with all the types of systems that make up the web of smart grid communications.

As of 2010, the report said, there are five major areas that make up a smart grid system in which standard issues may arise: "transmission upgrades, substation automation, distribution automation, electric vehicle management systems, and advanced metering infrastructure."