Cisco: Smart Grids Can Improve The World

Networking giant Cisco is pushing the potential of smart grids to help improve the societal and economic problems facing country’s around the world, despite concerns around how the networks will be funded and security issues highlighted by researches.

As part of the company’s Sustainability Report 2009, released this week, Cisco chief executive John Chambers said that the smart grids can help make homes and buildings productive and energy efficient. “Through Smart Grids we can securely manage energy on electrical grids, from generation to consumption, to make homes and buildings more productive and economical,” he said.

Cisco announced in May a plan to bring its networking expertise to the smart grid space with the company estimating that creating more efficient power grids could grow into a $20-billion-a-year business within five years.

Although Cisco is keen to characterise smart grids as secure – “Cisco Smart Grid solutions are one example of how energy can be managed with a high degree of security on electrical grids” the company stated – some experts have raised concerns about introducing more sophistication into energy networks.

At this year’s Black Hat conference in Las Vegas there were talks dealing with vulnerabilities and security concerns tied to the adoption of smart grid technologies. Among the presenters was security consultant Mike Davis, who along with other researchers at IOActive developed proof-of-concept code for a worm that spread from smart meter to smart meter. In a recent interview with eWEEK, Davis said the government needs to take a stronger role in making sure smart grid technologies are engineered securely.

“Until recently the focus on the smart grid has been about adding flexibility to the grid,” Davis said. “Unfortunately, hackers love flexible systems, and if we don’t take care to engineer the smart grid correctly (not just the smart meters) we are engineering what may be a national failure.”

Cisco has admitted that smart grids to carry some security issues. In an interview with eWEEK Europe UK, Christian Feisst, director, Smart Grids, Cisco Internet Business Solutions Group, said that although adding more sophistication to networks has issues for security, the company is working hard to mitigate any problems that might be introduced.

“As soon as a system is digitalised, there is always the question of security. We believe we can definitely manage that as we have huge experience in the security space. But it is one of the most important aspects and before you start to roll out smart grid technology, you definitely have to have a security concept in place,” Feisst said.

Aside from security concerns around smart grids, energy companies have also voiced concerns about the amount of government investment that will be needed to help them upgrade their networks. In September, utility company bosses said the £6.5bn investment in smart infrastructure planned from 2010 to 2015, identified by energy regulator Ofgem, falls short of the funds needed to overhaul power networks to cope with renewables such as wind and solar.

Concerns have also emerged that a rise in energy costs of up to 60 percent by 2020 could effectively wipe-out any reduction in bills offered by the introduction of smart meters and grids. But speaking to eWeek Europe UK, a spokersperson for the Department of Energy and Climate Change (DECC) said that it was wrong to suggest that the introduction of smart meter technology would be undone by price rises of up to 60 percent predicted by energy watchdog Ofgem.

“Smart meters empower the consumer to see how much energy they are using and then they can go away and make as much saving as they want and if they make no savings then their bill will go up more than if they do make a saving,” the spokesperson said. “It is not going to negate it – it will still mean that consumers will be able to pro-actively save themselves money.”

Legislation to mandate the use of smart grid technology is being led by European authorities. The EU energy package officially came into force on 3 September and consists of two Directives and three Regulations around energy efficiency. Both the gas and electricity directives stipulate that the Member States ensure the implementation of ‘intelligent metering systems that shall assist the active participation of consumers’ in the gas and electricity supply markets respectively.

The electricity Directive sets a time-line of 80 percent coverage by 2020 and every European household equipped with smart meters by 2022. For its part, the UK government has committed to roll out smart meters to every household by 2020.