Speaking at the inaugural GridWise Global Forum, U.S. Energy Secretary Steven Chu today announced the investment of more than $30 million for 10 projects that will address cybersecurity issues facing the nation's electric grid. Together, these projects represent a significant investment in addressing cybersecurity issues in the nation's electric infrastructure. Yesterday's announcement supports the Administration's goal of building a 21st Century clean energy economy supported by a secure, reliable, electricity system delivering power to American homes and businesses.

"These awards help us make a significant leap forward to strengthen the security and reliability of the nation's electric grid, in a climate of increasingly sophisticated cyber attacks," said Secretary Chu. "The development of technologies that can provide defense-in-depth cybersecurity solutions, and increased insight from private-public collaborations, will allow us to better protect the nation's energy delivery systems that keep our lights on and the power flowing."

The selections address cyber security concerns from two approaches: 1) research and development on innovative cybersecurity solutions and 2) the establishment of the National Electric Sector Cybersecurity Organization.

Innovative Cybersecurity Solutions - $20 million

As the energy infrastructure becomes more advanced, it must meet and address cybersecurity challenges along the way. These eight projects will research, develop, and commercialize a comprehensive range of cybersecurity solutions to strengthen the U.S. energy infrastructure against cyber intrusion and assist owners and operators in complying with cybersecurity regulations. Together, these projects will bring cyber security and privacy protection into the utilities, out to the substations, and to homes.

One of the projects being funded is:

• Sypris Electronics - Centralized Cryptographic Key Management (Tampa, FL)
  This project will enhance the security of the Smart Grid meters at residences, by ensuring the data remains private through providing and managing electronic data keys that only allow trusted parties to access the data and prevent intruders from doing the same. This project will receive $3.1 million in funding.

National Electric Sector Cybersecurity Organization - $10 million

The National Electric Sector Cybersecurity Organization (NESCO) will be a broad-based, public-private partnership that will work to improve electric sector computer and network cybersecurity, including those used in the smart grid. Working with the DOE and other federal agencies, it will bring together domestic and international experts, software developers and users to focus research efforts; to assess and test the security of new cyber technologies, architectures, and applications; and analyze, monitor, and disseminate infrastructure weaknesses and threats.

Two organizations will receive awards to support this effort. One, described below, will form the organization, NESCO. The other recipient, the Electric Power Institute, Inc. (EPRI), will provide a research and analysis resource for NESCO.

• Energy Sector Security Consortium, Inc. (EnergySec) (Clackamas, OR) - EnergySec will form the organization to be known as NESCO. It will work to improve electric system reliability by supplying data analysis and forensics capabilities for cyber-related threat. It will also assist in creating a framework to identify and prepare for challenges to grid reliability; share information, best practices, resources, and solutions to and from domestic and international electric sector participants; and encourage key electric sector supplier and vendor support and interaction. This project will receive $5.9 million in funding.

2010 U.S. Smart Grid Vendor Ecosystem Report Released

DOE released the findings of a new research study, the 2010 U.S. Smart Grid Vendor Ecosystem Report, which highlights $2.75 billion in annual product sales in three key smart grid categories: Advanced Metering Infrastructure (AMI), Demand Response, and Distribution Grid Management.

In addition to providing insight into spending patterns and market share in the sector, the report draws attention to a number of emerging industry dynamics shaping the future of the smart grid ecosystem. Key findings explored in the report include:

• The increasing data and communications sophistication of smart grid applications is driving dependence on integration and successful partnerships amongst a growing network of companies sharing the market
• $1.7 billion in venture capital has been invested into smart grid companies between 2007-2010 with the majority flowing into suppliers of AMI and home and building energy management products
• While venture-backed innovators have played an important role in the market, the report finds that the broader smart grid vendor landscape is comprised of companies new and old, large and small, as well as domestic and international.