25 October 2012 – The reluctance of utility companies to spend on adequate smart grid security could put consumer privacy at risk, says, business intelligence provider GlobalData. According to the firm’s analysis, utilities still consider cyber security as an additional and unnecessary expenditure, and focus on meeting (often lacking) regulatory standards rather than providing comprehensive protection.

This attitude could have the knock-on effect of reducing interest among cyber security industry players in developing effective security solutions for smart grid technologies such as sensors, relays, meters, and remote terminal units. Additionally, as there is currently no secure system for disclosing vulnerability, companies are reluctant to share information regarding the cyber-attacks they have experienced for fear of inadvertently leaking data.

The record of threats is insubstantial, meaning that utility companies are less likely to spend on costly security solutions. This scenario is especially apparent in the case of investor-owned utilities, where the lack of evidence makes it difficult to persuade shareholders of a sufficient return-on-investment (ROI) from cyber security.

The two-way flow of data that smart grid technologies involve enables power firms to monitor electricity consumption and more efficiently control supply to consumers. However, this same system, if corrupted, could also be used to carry out real-time surveillance, determine personal behaviour patterns, and even facilitate identity theft.

Utilities and governments around the world have already faced public resistance to the implementation of smart grid technologies, including protests in Canada, the Netherlands and the US.