Distributed Energy Resource Management Systems (DERMS) will be necessary for utilities to successfully transition to a widely distributed, flattened grid structure accommodating a considerable amount of renewable energy, storage, and electric transportation.
A good definition of it is: DERMS are software-based platforms that provide the ability to continuously manage diverse and dispersed energy resources, both individually and in aggregate, to enable distribution grid operations, while improving customer value, market share and energy efficiency.
Essentially these systems are a merger of the grid with sensors and associated telematics, and advanced data analytics, such as AI or ML. These bring a whole raft of challenges to successful implementation, for example, dealing with legacy systems and software, or the very real threat of creating security vulnerabilities when many partners are interacting in a decentralized ecosystem.
Consultants Wood Mackenzie say in an editorial about the future of DERMS and associated systems:
“We expect cumulative capacity of distributed storage and solar in North America, Europe and Oceania to double by 2025, while electric vehicle (EV) charging points are set to grow sevenfold by this date. The US alone will add 127 GW of distributed energy resource capacity between 2016 and 2025.
In the same time frame, the majority of new bulk generation capacity will be variable renewable energy: wind, solar and battery storage.
The increasingly variable nature of both distributed energy resources (DERs) and bulk power generation will lead to operational and planning challenges for utilities.”
How can we harness DERMS to enhance grid operations?
At scale, a fleet of smart devices configured as a VPP can deliver a number of benefits to grid operators, which include:
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Absorbing surplus solar generation to reduce the burden on low-voltage networks, especially on ‘minimum demand’ days when it is both sunny (high generation) but mild weather (low load).
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Load shifting to lower the impact of peak demand on the grid
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Adding or utilizing reactive power to assist in managing local voltage in areas of the system
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Providing contingency frequency control ancillary services (FCAS) to support the grid through periods of instability
An example of a successful DERMS is Virtual Peaker, a cloud-based SaaS company which works with utilities to implement these systems. One of their clients is Bloomington, Indiana-based Hoosier Energy, using the company's “Connect To Save” program. This application utilizes smart thermostats and Electric Vehicle (EV) chargers to reduce demand across the grid.
Connect To Save manages residential electric demand through machine learning and real-time control of internet-enabled appliances. This voluntary management reduces demand for electricity while minimizing the impact on users. The app connects in-home smart devices to run real-time residential demand response programs that leverage distributed energy resources (DERs) to reduce cost and avoid peak times when energy is more expensive.
Utilities face a variety of challenges that can be assisted by DERMS, including managing investment, capital costs and ROI. To fight climate change, utilities around the world have been set targets for decarbonization initiatives meant to minimize the amount of carbon dioxide in the atmosphere. Running parallel to this are electrification programs, which aim to shift energy resources from fossil fuels to electric alternatives, which can be achieved through increasing renewable technologies. To meet Net Zero Emission targets by 2050 or earlier, demand response programs need to increase deployment levels approximately tenfold. To satisfy these convergent efforts, utilities will need to enhance their existing DER and demand response strategies, making DERMS an increasingly attractive method of implementation to reach legislated goals.