An estimated $590 million was spent on smart grid security technologies in 2010 and by 2016 that number is projected to surpass $2 billion. Smart grid security covers identity management and access controls, threat and theft defense, industrial control system security, smart grid cellular communications, physical safety and security, and other security types.

ABI Research’s report, Smart Grid Security, identifies all the smart grid security risk types, current government and electric regulatory body legislations, and offers forecasts for the spending on key segments on the smart grid and risk types that support and enable the development of smart grids.

Security spending on transmission upgrades made up the largest portion of smart grid spending, accounting for approximately 54% of the total in 2011. This segment is predicted to remain the largest for the next five years. Additionally, security spending on substation and distribution automation is forecast to be significant over the next few years as well.

Electric vehicle (EV) charging stations are projected to see the highest security growth rates out of all the smart grid segments, growing from $6 million in 2011 to $150 million by 2016. EV charging stations faced similar security issues to smart meters, such as data protection and tampering with the charging stations. The biggest areas of development in the security arena will be EV authentication of vehicles and physical security features.

Senior analyst Josh Flood comments, “There has been an enormous focus on smart grid security, particularly over the last two to three years. As well as providing security protection against physical and cyber-attacks on the smart grid, utilities are spending significant amounts of money on closed-circuit television (CCTV) surveillance and security software.”