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.
Another reason for investment is because there will be more smart meters out in the field to protect. In a separate report earlier this month, Pike Research estimated that the global installed base of smart meters will reach 535 million units by 2015 and 963 million units by 2020. Smart meters will represent the majority of all installed electrical meters by 2018, and the penetration rate will reach 59 percent in 2020.
"Smart meters represent a compelling value proposition for utilities around the world," Bob Gohn, research director at Pike Research, said.
The growth of the industry will be in waves across geographic regions, the researchers said, with the North American market leading the way and peaking in 2012. The peak in Asia Pacific is expected in 2015 and in Europe in 2017, and then there will be a gradual long-term growth in Latin America, Middle East and Africa.