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Analysis of the Global Utilities Infrastructure Security  Market 2014 : Global Appetite for Energy and Water Fuels Growth in Infrastructure Security

  • December 2014
  • 82 pages
  • Frost & Sullivan
Report ID: 2582121


Table of Contents

Key Findings

•The increasing global appetite for energy is driving considerable investments in utilities and water infrastructure for plants, transmission, and storage. Securing each of these critical points of the value chain requires robust physical and IT security solutions.
•Critical infrastructure is expensive and involves high-value construction projects, but costs differ widely between regions and depend significantly upon risk. The cost of securing these sites varies by region depending on threat perceptions and budgets.
•Fossil-fuel power generation will remain the focus of most utility operators’ spending, but securing renewable energy technology is a growing area of interest with significant capability gaps. For water operators, securing key stages of the production cycle is critical to mitigating major risks such as contamination where chemical, biological, radiological, nuclear, and explosive (CBRNe) agents are the primary concern.
•Markets with more mature, pre-existing security capabilities and higher budgets invest the most in security, irrespective of the nature and size of infrastructure projects. The highest-spending regions are driven by investments in expensive, innovative technology and integrated management that are considered vital additions to legacy solutions.
•North America and Europe remain strong markets, buoyed by increased investment in high-technology solutions, particularly as add-ons to existing infrastructure. Asia-Pacific is growing and driven by the high demand for energy and subsequent requirements for new infrastructure development.
•The cybersecurity segment remains relatively neglected in terms of investment, whereas investment in surveillance and perimeter security solutions remains strong. Integrating physical security with cybersecurity measures will be key.

CEO’s Perspective

Infrastructure demand to fill the future energy gap, especially in emerging markets, is leading to significant opportunities in these regions.
Smart solutions based on data analytics and intelligence to integrate multiple points and legacy systems are most in-demand in Western markets.
The rollout of smart grid technology will mandate a fundamental re-engineering of the industry, creating new security opportunities.
The insider threat, both malicious and non-malicious acts to disable systems, is a major risk requiring more scrutiny.
Cybersecurity is the biggest capability gap in the electricity domain, while pipeline leak and CBRNe detection will be the most prominent threats in the water domain.

Market Overview

•The fragmented nature of the utilities value chain creates security vulnerabilities with multiple weak points. This complex industry landscape requires the integration of isolated facilities with standalone security architecture and increases the demand for new “end-to-end” systems.
•Given the fragmented nature of the value chain, SCADA (supervisory control and data acquisition) systems are isolated and require centralised oversight. Reducing vulnerabilities in SCADA software and increasing technical know-how to create a unified threat response is vital.
•Smart grid technology is already improving the efficiency, economics, and sustainability of the production and distribution of electricity, but not without security challenges. Implementing successful security solutions with improved integration and connectivity requires advanced, data-driven security solutions.
•With this shift towards interconnected smart grids and increased reliance on data intelligence and communications technology, digital security threats will be increasingly pertinent. Security solutions will shift focus from a perimeter-based approach to a more data-centric one intended to identify possible threats before they become a real risk.
•Smart grid technology proliferation is forcing security providers to address the potential for data-protection breaches. Micro-grid energy management and control centres that monitor data and are able to enact the relevant response will be increasingly in-demand to reduce disruptions to the micro-grid, and by extension, ensure no ‘down-time’ for consumers.
•Redundancy, or ensuring that critical applications are immediately available to both network operators and consumers, is a critical feature of smart grid technology, which is generally connected to several redundant sources, to ensure the highest levels of “uptime” in the network.
•The increased sophistication and application of advanced cybersecurity solutions, coupled with surveillance and/or physical security monitoring to leverage predictive analytics, are improving traditional protection methods. Advanced control centres will also enable end users to better mitigate any damage in the event of a malicious cyber attack.
•Growing awareness of the need for cybersecurity is apparent; however, there is a general reluctance to invest due to restrained budgets and the continued use of legacy systems, whose upgrades to advanced automation and control systems involves upheaval and disruption to daily operations. A crucial weakness in the cybersecurity segment is a lack of expertise and professional training.
•Despite these current restraints, cybersecurity spending is expected to grow dramatically given the vital importance of critical infrastructure protection to national governments. This is providing growth in managed security solutions.
•The insider threat is another major risk involving both malicious and non-malicious acts to disable or disrupt industrial control systems or to illegally access electricity by tampering with smart grid technology. Awareness, education, and training for staff is a crucial component of any cybersecurity measure that is implemented in a utilities plant.
•In addition, cybersecurity solutions must be able to monitor and mitigate the insider threat through intelligence-driven predictive analytics. Acquiring these capabilities are technology priorities for end users and include solutions such as a digital cloud monitoring centre to track events across multiple sites in real-time by security operations personnel.
•Energy storage systems as a potential backup in the event of malicious disruption to the flow of energy supply will be required. Ensuring cybersecurity is essential because these systems remain among the most vulnerable points.
•Renewable energy infrastructure sites often have different security technology requirements.
•The industrial Internet of Things and the convergence of information assurance (IA) and IT are growing trends. The increasing use of cloud and hyper-connectivity will require additional levels of security.

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