As part of the company's Sustainability Report 2009, Cisco CEO John Chambers (right) 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 $20bn-a-year business within five years.

Although Cisco is keen to characterise smart grids as secure, experts raise concerns about introducing more sophistication into energy networks as supervisory control and data systems (SCADA) have weaknesses and government needs to take a strong role in ensuring smart grid technologies are engineered securely.

And Cisco concurs that smart grids to carry some security issues. Christian Feisst, (left) director, Smart Grids, Cisco Internet Business Solutions Group, said "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 companies  said the £6.5bn investment in smart infrastructure planned from 2010-2015, 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 emerged that a rise in energy costs of up to 60% by 2020 could wipe-out any reduction in bills offered by the introduction of smart meters and grids. Legislation to mandate the use of smart grid technology is led by the European authorities.

EU energy package officially came into force in September consisting of two Directives and three Regulations around energy efficiency. Both the gas and electricity directives stipulate that Member States ensure 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% coverage by 2020 and every European household equipped with smart meters by 2022. The UK has committed to roll out smart meters to every household by 2020.