August 3, 2010

Smart meter deployment continues to pick up speed in nearly all regions of the world; however, as with all information technologies introduced in the past 50 years, cyber security was at first overlooked in the rush to create a working device.  Now, utilities, governments, systems integrators, device manufacturers, and nearly everyone else involved realize that smart meters and their surrounding networks can be attacked, and that cyber security measures are necessary to protect the meters and their environment.  A new report from Pike Research forecasts that investment in smart meter security will total $575 million worldwide during the period from 2010 to 2015, representing an average of about $3.00 per meter during that period.

“Smart meters are one of the weakest links in the smart grid security chain,” says industry analyst Bob Lockhart.  “Home area networks, commercial building networks, and utility networks all perform well in terms of keeping data encrypted within their domains.  However, these domains terminate at the smart meter, and the only way for data to pass from one network to the other is for the smart meter to decrypt the data from one side and re-encrypt it on the other.  Consequently, the data are, for a short while, unencrypted on the meter and could be successfully eavesdropped.”

Pike Research’s analysis indicates that a solution to this security gap is unlikely to be in place before 2012, and in fact many vendors in the industry demonstrate little interest in solving this problem, as long as data is adequately protected within their own domains.  Yet, adds Lockhart, solving this problem could present a significant business opportunity.

Pike Research’s report, “Smart Meter Security”, assesses in considerable detail the security risks to Smart Metering, using ISO27002:2005 as a baseline to identify topics for consideration.  The study reviews Smart Metering against all 11 security clauses of ISO27002:2005 to identify six key security opportunities including event correlation improvements, security software on meters, identity management and authorization, network resiliency, meter worm prevention, and end-to-end data encryption.  It includes an in-depth examination of the market issues and technology issues related to smart meter security, along with market forecasts for key world regions through 2015.  An Executive Summary of the report is available for free download on the firm’s website.

Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets.  The company’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Clean Transportation, Clean Industry, Corporate Sustainability, and Building Efficiency sectors.  For more information, visit www.pikeresearch.com or call +1.303.997.4619.