How Grid-Edge DERMS Support the Energy Transition

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Recently, the Department of Energy released a report calling for virtual power plant capacity to grow from the current 30-60 gWh available to U.S. grid operators primarily attributable to demand response, to 80-160 gWh to meet rapidly increasing demand. Now, analysts report that the distributed energy resource (DER) market is poised to nearly double by 2027, news that parallels increased clean energy jobs and the expansion of the U.S. battery belt. This increase in DER adoptions presents an opportunity for utilities to meet demand through demand flexibility initiatives like demand response, EV charging, or BYOD programs, all of which employ DERs to shift load to off-peak hours of usage, minimizing costly peak energy purchases, while enhancing grid resiliency. Using a Grid-Edge distributed energy resource management system (DERMS), utilities can utilize these otherwise disparate resources to meet needs through aggregate conservation, supporting the energy transition by creating a viable path to energy independence and load flexibility.

 

Why the Energy Transition Matters

According to researchers at Stanford University, the long-term timeline for fossil fuels is particularly bleak: oil has about 30 years, gasoline has about 40, and coal has about 70. Of course, this data is subject to change, especially considering recent spikes in energy demand brought on by artificial intelligence, server farms, and the impacts of climate change which have led to higher average temperatures, progressively hotter every the last decade. Irrespective of any public policy, the energy transition from fossil fuels to a diverse portfolio of energy assets is not an optional choice, but an existential reality. 

Designed to shift load to off-peak hours of usage, demand flexibility programs have proven useful in defraying high peak energy costs, while enhancing grid resiliency. More importantly, the increased adoption of DER assets provides an avenue for utilities to meet demand while generating fresh revenue streams, minimizing the high costs of infrastructure upgrades while meeting energy needs.

 

Managing DERs Using Grid & Grid-Edge DERMS

Distributed energy resources (DERs) include solar, battery storage, electric vehicles and EVSE chargers, and smart home devices like thermostats or water heaters. Utilities manage these through DERMS platforms, which aggregate and control devices for use in numerous energy management applications. While all DERMS control DERs, not all DERMS are the same. A Grid DERMS platform is used by grid operators to manage utility-held assets like solar or battery installations. Conversely, Grid-Edge DERMS manages behind-the-meter DER assets found in places like residential, commercial, and industrial facilities that are not owned by the utility. 

Together, both Grid and Grid-Edge DERMS create a holistic ecosystem of front-of and behind-the-meter DER assets for utilities to access for load management strategies. Using tools like Topline Demand Control, utilities can optimize behind-the-meter DER assets at the device level to create a reliable, AI, and data-driven energy yield: TDC removes the uncertainty from behind-the-meter DER management.

 

How Distributed Energy Resources Create Revenue & Value

As noted, the two primary use cases for distributed energy resources (DERs) within demand flexibility programs are to reduce costs associated with peak energy consumption and increase grid resilience. This is achieved through numerous demand flexibility strategies from conservation efforts to the redistribution of communally generated clean energy. Likewise, demand flexibility is a useful tool to strategize energy purchases through long-term arbitrage. 

 

Demand Conservation: Demand Response & EV Charging

The concept of demand response has existed for more than four decades, enhanced now through the Internet of Things and expanded access to broadband and WiFi-enabled devices. Historically, utilities installed physical switches on behind-the-meter resources—usually HVAC units—to send a signal to turn off a device during specific event windows. These radio signals provided a less-than-ideal solution to load management, as occupants were not always aware of when a grid event may occur or how long to expect it and could, in turn, manually opt out of programs at will. 

While homeowners can still opt out of demand response events, enhanced communications tools allow for direct customer communications, providing an opportunity for utilities to educate consumers on the need for demand events. Furthermore, through WiFi-connected devices, utilities can control thermostats and water heaters remotely without any further physical accouterment necessary to manage the program, leaving demand response more effective and affordable than ever. 

EV charging strategies parallel demand response as a conservation strategy. In both paradigms, utilities mitigate consumption of energy—be that the temperature on a thermostat or the charging time or duration of an EV—to decrease usage during periods of peak demand. As such, the two represent parallel strategies, both necessary as the world continues to electrify during the energy transition.

 

Distributed Clean Energy

Where demand response and EV charging represent aggregate conservation, virtual power plants offer a path to employ ambient solar and stored battery energy to repower the grid. Put another way, instead of conserving energy, utilities can deploy virtual power plants to capture and manage aggregate communally generated or stored energies. Through a Grid-Edge DERMS, utilities can optimize, aggregate, and direct energy where and when it is needed to meet demand. An example of this includes strategies like community solar installations and small solar co-ops that customers can subscribe to or enroll in to help foster energy independence while offering a lifeline for energy during extreme weather or grid events. Some utilities have already considered providing these resources to customers as a means of enhancing grid security and fostering energy equity while offering multiple opportunities for load management strategies.

 

Energy Arbitration

One common use of demand flexibility is to offset historically likely high peak energy costs through strategic energy purchases. While a Grid-Edge DERMS manages any demand flexibility programs of all kinds to address energy insecurity, forecasting software is instrumental in event planning. Using AI and machine learning, forecasting has evolved to include both real-time and historical data needed to plot out the uncertainties of the energy landscape. For example, ERCOT employs a Coincident Peak strategy which monitors the rate of energy usage and costs per hour, incentivizing utilities to consider off-peak energy purchases to offset high costs.

 

Putting It All Together

No matter how the energy landscape changes from cultural pressures, the energy transition is imminent, an existential reality necessary to meet rising demand as conventional energy sources become increasingly difficult to secure. While we have decades of fossil fuel resources remaining, transitioning to a diverse portfolio of energy resources takes planning and will not happen overnight. Fortunately, the proliferation of DERs, as well as advancements to Grid and Grid-Edge DERMS technologies have created yet another path for energy flexibility for utilities, while simultaneously supporting the most important person to every utility: their customers.