According to Frost & Sullivan, Information and Communications Technologies (ICT) is the answer for meeting concerns about loss of privacy and data protection in Smart Metering and to meet European Union (EU) deadlines for deployment—a formula for a dramatic increase in demand for ICT and profit for its vendors.
Because data confidentiality and integrity is crucial for smart meter operation and deployment must begin soon in order to meet the deadlines, ICT will provide the necessary tools to enable energy companies to comply with reporting requirements as well as security assurance procedures.
“The United Kingdom is a good example of using a legislative approach to balance customer data privacy concerns with the supplier and distributor interest in accessing meter data to perform operational duties,” said Ewa Tajer, a Frost & Sullivan Research analyst for ICT. “A single entity in Data Communications Company (DCC) has been assigned to manage the communications and data network to support smart meter deployment. Thanks to this move, the UK has effectively centralized data management to a national entity and clearly defines criteria related to data access and customer right boundaries.”
The Smart Metering Equipment Technical Specifications (SMETS) require energy companies to adhere to specific standards and procedures for data protection including initial and on-going risk assessment and annual security risk audits as well as physical security measures to protect the equipment that interacts with smart meters. “Deploying millions of smart meters is a security expert’s nightmare,” said Tajer. “Providing access to critical network components opens up subsequent risks of malware within the grid.” Preventing malicious hacking will require both software investments and clearly defined security frameworks for data access, processing and control.
If security issues remain unaddressed, smart meters may bring more threats than benefits. That opens the door for increased ICT spending to enable energy companies to comply with reporting requirements as well as security assurance procedures. From secure communications services to integrated emergency services within the enterprises to critical infrastructure protection, ICT vendors are expecting a sustained period of demand for hardware, software, and applications to optimize existing ICT infrastructure.
“Cyber security investments will be an increasingly important expenditure for smart utilities in the long term. According to our estimation cyber security spend will add another 12.0 to 18.0 per cent of capital expenditure to European energy companies’ investment in a smart grid environment by 2017,” said Tajer. (For more information, contact: Frost & Sullivan, +48 22 481 62 20, www.frost.com.)