A smart grid is a communication and information technology (IT) system used for consumption, delivery, and generation of power. It uses two-way communication to develop an automated and widely distributed system with advanced functionalities such as grid resilience, operational efficiency, real-time control, and better integration of renewable technology, which helps reduce carbon emission.
The transition toward low-carbon emission changes both the ways of power production and consumption. Smart grids become a key element to facilitate this change. A smart grid can reduce transmission and distribution (T&D) losses. It also optimizes the use of present infrastructure to regulate the flow of power and meet demands for peak time. Moreover, a smart grid can improve energy efficiency by managing the consumption patterns of new and existing users connected to the grid. For today's life, it has become a key component for energy security and climate change mitigation.
Moreover, increase in government involvement for adoption of smart grids to reduce carbon emission accelerated the demand for smart grids. Governments of different countries have made smart meters an essential element of national energy policies to reduce carbon emission and improve efficiency. For instance, the European Union (EU) set an ambitious target for 2020 — cutting greenhouse gases by 20%, reducing energy consumption by 20%, and meeting 20% of its energy needs from renewable sources. This is likely to increase adoption of smart grids. The following insights are based on a report on Smart Grid Security Market by Transparency Market Research (TMR).
Smart Grid Components
System component:
- Electrical household appliances
- Renewable energy resources
- Smart meter
- Electric utility operation center and service providers
Network component:
- Home area network (HAN)
- Wide area network (WAN)
Types of Smart Grid Vulnerabilities and Attacks
Cyberattacks are mainly classified topology wise, component wise, or protocol wise.
Topology-wise attacks target the smart grid topology by launching a denial-of-service (DoS) attack that stops operators to have a full view on the power system causing inappropriate decision-making. Component-wise attacks target field components that include the remote terminal unit (RTU). The RTU is majorly used by engineers to remotely troubleshoot and configure smart grid devices. Protocol-wise attacks target to attack communication protocols using various methods such as false data injections and reverse engineering.
Some of the other attacks are as follows:
- Malware spreading: The attacker develops malware and injects it into the smart meter and company server to replace or add any function to a device.
- Access through database links: If a company's database management has not been configured properly, the attacker can access the business network database and use it to exploit the control system.
- Communication equipment: The hacker directly affects the communication equipment, for example multiplexers, to directly damage the equipment or use them for further attacks.
- Injecting false information: The attacker sends a false information package to inject in the network, such as fake price, wrong meter data, and so forth. Fake information directly affects the financial department of the electricity market.
- Network availability: As a smart grid works on IP protocol, the attack of DDoS affects network flow, delaying, blocking, or corrupting information transmission by making smart grid resources unavailable.
- Eavesdropping and traffic analysis: The hacker can access sensitive information by monitoring network traffic.
Escalating Demand for Security
Today, protecting the country's electricity grid from cyberattacks has become one of the major issues for the government. Most of the countries of different continents get affected by power grid cyberattacks. For instance, in 2015, Ukraine got affected by a power grid cyberattack in which hackers successfully switched off 30 substations and nearly 2,25,000 people were left without electricity for 1 to 6 hours. Private residences, government offices, business centers, and industrial facilities were affected. Hence, to overcome this, the government authorities approved cybersecurity reliability standards for implementing industrial control system software to have a view on supervisory control and data acquisition (SCADA) systems.
Similarly, in 2016, Israel experienced the largest cyberattack on its power system in which hackers changed power consumption data. Hence, to overcome the cyberattacks, IT security techniques such as antiviruses, firewalls, intrusion detection systems (IDS), public key infrastructure (PKI), virtual private networks (VPN), and so forth, are integrated into the smart grid. This is only a part of the solution. Hence, there is no silver bullet to maintain the whole power grid system.
A major challenge of smart grid cybersecurity is protecting the increasing smart grid assets and communication channels from advanced cyberthreats. Advanced cybersecurity technologies such as SIEM systems, application whitelisting, and various security featured applications integrated with the processor are required in order to counter the highly sophisticated threats or to protect end-to-end networks. This accelerates the demand for cybersecurity solutions in the smart grid security market.
Smart Grid Security Market by Application
Based on application, the smart grid security market is segmented into:
- Consumption
- Generation
- Distribution and control
In 2019, consumption applications dominated the market. A rise in the demand for electricity raised the requirement of smart grids for power supply that simultaneously raised the need for smart meters for reading power consumption rates. Smart meters provide a feature to control or deploy various functionalities from remote locations. This provides room for hackers to disconnect the device, tamper with the data sent to system operators, or extract confidential data of consumers. If hackers inject false data in the system, it directly affects the revenue of the company. Hence, the need to protect smart meters from cyberattacks raised the demand for smart grid security solutions for consumer applications.
Based on region, North America accounted for the largest market share in 2018. The United States and Canada were the major countries driving the smart grid cybersecurity market in this region. In 2014, the U.S. Department of Energy (DOE) estimated historical and forecast investment in the smart grid to be approximately US$32.5 billion between 2008 and 2017, averaging US$3.61 billion annually during the period. However, this rise in the adoption of the smart grid simultaneously raised the cyberattacks on the North American electric grid, making smart grid cybersecurity solutions a key component.
According to the U.S. Federal Bureau of Investigation (FBI), in today’s time, cyberattacks are becoming a primary weapon for terrorism. The energy system of the nation becomes a key targeted area for hackers. According to the U.S. Department of Homeland Security (DHS), 198 cyber incidents happened in the fiscal year 2012 across all sectors, in which 41% of incidents involved the energy sector. Similarly, according to the council of economic advisers, malicious cyber activity cost approximately US$109 billion to the U.S. economy in 2016. Hence, to overcome the effects of cyberattacks, most government agencies are involved in working on power grid cybersecurity.
Some of the key players of the smart grid cybersecurity market are AlertEnterprise Inc., AT&T Cybersecurity, BAE Systems plc, Black & Veatch Holding Co., Cisco Systems, Inc., Eaton Corp. Inc., Entergy Services Inc., Hewlett-Packard Co., Honeywell International Inc., IBM Corp., IOActive, Lockheed Martin Corp., AlertEnterprise Inc., McAfee, LLC, N-Dimension Solutions, Inc., NortonLifeLock Inc., Siemens AG, Sophos Group plc, Sourcefire, Inc., Verisign, Inc., and Viasat Inc.
The companies of smart grid security solutions market majorly provide end-to-end security solutions for communication platforms for both business and control operations. For instance, Cisco Systems, Inc., offers a package of grid security solutions that includes identity management and access control, threat defense, data center security, WAN security, security monitoring and management, physical safety and security, generation plant security, substation security, and utility regulatory compliance Cisco Services to plan, build, and run grid security solutions. Similarly, Eaton Corporation Inc. provides smart grid security solutions for various applications such as smart energy distribution, smart residential homes, smart commercial and institutional buildings, smart industrial buildings, and smart renewable energy.
