This week’s Smart City roundup features the latest market report demonstrating expectations for smart cities in the next five years, increasing privacy concerns about smart meters, and newly unveiled risks posed by smart buildings.

Smart City market to reach $1,266.58B revenue by 2019

MarketsandMarkets recently released a report looking at the future of smart cities and associated aspects of this market.  The report stated that as more people choose to dwell in urban areas, governments and municipalities will be faced with infrastructural challenges such as creating more cities for residents, as well as being able to equip said cities with the utilities needed to thrive. Aside from the creation of new cities, existing cities should be upgraded in order to accommodate the growing population as well as the need to provide solutions for intelligent transportation, security, energy management, CO2 emissions, and sustainability or use of renewable energy.

The report stated that the global smart cities market is expected to grow from $654.57 billion in 2014 to $1,266.58 billion by 2019, at an estimated Compound Annual Growth Rate (CAGR) of 14.1 percent from 2014 to 2019.

The report also analyzes the adoption trends, future growth potential, competitive outlook, market ecosystem and market value chain across different regions such as North America (NA), Europe, Latin America (LA), Asia Pacific (APAC), and Middle East and Africa (MEA).  The report projects that smart cities in APAC and MEA will grow at a rapid rate and will also be the highest revenue generating markets.

Will smart meters spy on you?

Many utilities companies in the US are deploying smart meters to their customers to better manage consumption of water, gas and electricity.  These smart meters allow people to monitor their consumption in real-time and allow utilities providers offer incentives to those who use less during peak hours.  The downside of smart meters is that when you forget to pay your bill, your utilities can be turned off remotely.   The good news is, when the bill is settled, turning them back on is just as easy.

This remote access and monitoring is what’s concerning some people, keeping them from upgrading to smart meters in their homes. But Ron Katzman, Key manager for Advanced Grid Operations and Technology of Philadelphia-based utility PECO, states that for his company, they have ensured all data obtained and transmitted by these smart meters are secured. PECO encrypts the communication as soon as the smart meter is installed, preventing hackers from disrupting your home.  He also pointed out that smart meters do not identify who’s living in a specific place, as readings from smart meters are associated to the meter itself, not those who are living in the home.

“[T]here’s a lot of anonymousness if you will, of this data. For example, I need to look at customer’s interval usage information to detect if they’re having some kind of problem with their meter or with their service. Maybe they’re getting a lot of power outages. There’s a lot of very legitimate reasons why we would have to look at that, but I don’t look at it to say, ‘Is it Ron Katzman living there?’ I look at it to say, ‘Meter number 123 is performing like this,’ Katzman stated.

Still, some people aren’t easily convinced that smart meters aren’t being installed to spy on people.  In some states, people can opt out of transitioning to smart meters by paying a fee, but some companies are forced by local governments to have smart meters installed in every home within the next 10 years.  This will be problematic for those who are against smart meters, but, as Katzman stated, if they want to continue getting power, gas, and water, they may be left with no option but to agree to smart meter installation.

If some households are really opposed to smart meters, they could take matters in their own hands and fit their home with technologies that uses renewable energy such as solar panels or wind mills.

How secure are smart buildings?

The move to make buildings more energy efficient by connecting heat, lighting, ventilation, elevators and other systems to an Internet-based network is seen as a huge threat to the safety and security of the building itself as well as the people, as these systems are integrated with systems outside the building, like a smart grid.

Analysts believe that the security offered by these connected devices aren’t secure enough and can be compromised by malicious attackers since building managers are only focused on what’s happening in the building.  Data sent from the smart building to the smart grid can be compromised and building managers may not be aware of external security breaches.

“It creates some interesting challenges for enterprise IT,” Hugh Boyes, cybersecurity lead at the U.K.’s Institution of Engineering and Technology, said. “They need to know there are some increasingly complex networks being put into their buildings that are running outside their control.”

Jim Sinopoli, managing principal at Smart Buildings LLC, pointed out that communications protocols used in smart buildings, such as BACnet and LonTalk, as well as the connected devices that adopted these protocols for compatibility, are open and transparent, therefore increasing the system’s vulnerability.  A security breach in one system could create a domino effect and compromise the whole network.

To deal with these risks, Rolf von Roessing, president of German security consulting company Forta AG and a member of ISACA’s Professional Influence and Advocacy Committee, recommends that IT practitioners extend their information security and cybersecurity management processes to smart buildings and its connected components.

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