U.S. Unveils Plans to Invest in Smart Grid Technology, Security

The White House announces its smart grid proposal the same day a PwC report underscored the threats facing utilities companies.

White House officials unveiled a series of initiatives designed to help implement information technology to the national power grid to make it smarter, more efficient and secure.

The National Science Technology Council outlined its plans to modernize the power grid in rural areas and to create a "smart grid innovation hub" in a report titled "Building the 21st Century Grid" released June 13. The hub will be a collaboration of federal researchers, companies and utility executives and will support research, development and deployments of smart grid technology.

The Obama administration has particularly emphasized grid security issues. The modernization of the power grid will allow operators to have access to information about threats to the power grid, help companies deliver new security tools and create security standards.

The United States needs a more reliable energy system to manage stresses on the grid, such as outages and peak-time demand, John Holdren, the director of the White House Office and Science Technology Policy, said at a press conference.

The project announcements are timely, considering the latest report on cyber-threats facing utilities and power generation companies from PwC, also released June 13. Several multinational energy companies recently suffered security breaches long before the victims became aware that their systems had been compromised, the report found. It was a situation of "not knowing until it was too late," the authors wrote.

Contrary to popular opinion, cyber-crime is a risk to all industries and isn't limited to just companies dealing with personal customer information or processing e-commerce transactions. Energy companies are vulnerable because they have valuable proprietary data on discoveries and financial information relating to existing power and fuel reserves, according to the report. State-sponsored foreign attackers have used "highly sophisticated methods" to compromise these targets, the authors wrote.

"Had digital evidence and breach indicators been recognized at the time of an event, victims of cyber-crime could have taken positive action and minimized their risk," the report said.

Technologies such as smart grid, advanced metering infrastructure and modern control systems add to the growing cyber-threats and associated risks. The true cost of a security breach goes beyond initial data loss or service disruption-resulting in potential financial losses, intellectual property theft, fraud, diminished shareholder value and reputational damage, the report found.

NitroSecurity will be adding a new product to its industrial-control system SIEM (security information and event management) portfolio to securely manage smart grid deployments, Eric Knapp, the director of critical infrastructure markets for NitroSecurity, told eWEEK. The NitroView SIEM currently provides real-time visibility across both the business and SCADA (supervisory control and data acquisition) networks within energy utilities, according to Knapp. The new version will add support for devices, protocols and applications specifically used in intelligent distribution and metering on smart grids, Knapp said.

Traditionally, the energy infrastructure's "greatest defense" was its obscurity and isolation in terms of systems and protocols, according to Knapp. Smart meters and other connected systems will result in an "exponential" increase in endpoints and associated data that utilities will need to monitor and manage, he said.

"The industry needs to move quickly to establish a level of real-time security intelligence for the smart grid, because the threat is real," Knapp said.

The White House will advance its smart grid goals with new programs and initiatives to coordinate between the private sector and various federal agencies. The Obama administration has already invested $4.5 billion in recovery investments into smart grid projects, along with the $5.5 billion investment from private funds, government officials said.