The emergence of distributed energy resource management systems (DERMS) reflects the needs of today’s increasingly decentralized grid networks. The proliferation of distributed energy resources (DERs) being integrated into these networks means that grid optimization must not only manage supply and demand, but energy storage and a growing list of new kinds of electricity loads, including electric vehicle (EV) charging.
Integrating and managing a diverse array of DERs is a daunting task. The mix of DER types can be a jumble of complexity. Traditional approaches fall short, demanding a new paradigm that overcomes steep challenges with efficiency and scalability. As total electricity demand grows and the gap between centralized and distributed generation widens, finding intelligent methods to manage electric service delivery is paramount.
Is a DERMS a lightweight advanced distribution management system (ADMS) or is it a heavy weight demand response management system (DRMS)? In truth, It is neither and both and more.
DERMS: A Definition and the ADMS Distinction
Though widely used, the term DERMS can be tough to pin down. My recent blog notes that DERMS has become an umbrella term for any system utilized by a utility or other grid operator to manage the optimization of the distribution grid to maintain reliability. A good start but the concept deserves further unpacking.
The need for DER aggregations is a major driver underpinning efforts to develop a comprehensive DERMS strategy. The Department of Energy (DOE) has a definition for DER aggregation platforms such as microgrids. Virtual power plants VPPs - another DER platform – also now has a definition per a new DOE report entitled Pathways to Commercial Liftoff: Virtual Power Plants. It goes like this: “Aggregations of DERs that can balance electrical loads and provide utility-scale and utility-grade grid services like a traditional power plant.”
The “VPP Liftoff” report does a great job of highlighting the value that DER platforms such as VPPs (which fall under the DERMS umbrella) bring to energy markets. VPPs achieve the dual objectives of meeting expected growth in electricity demand while simultaneously phasing out fossil fuel peaking plants, which are often the dirtiest and most expensive resources supporting grid networks. (The report does not, however, offer a DERMS definition.)
A DERMS strategy often evolves out of ADMS, but they are not exactly the same. An ADMS helps control front-of-the-meter utility resources, switchgear and transformer banks using a centralized, top-down and iterative approach to problem-solving. An ADMS typically exercises control in 5-, 15- and 30-minute intervals. An ADMS is not designed, however, to marshall DERs to resolve grid constraints, frequency deviations or voltage sags and spikes. By contrast, DERMS re-optimizes the system on a second-by-second basis - depending upon the exact grid service being provided - and it extends its control to an entire feeder populated with each and every type of DER asset available. In short, a comprehensive DERMS solution bringing together grid optimization and flexibility management is a better fit than ADMS alone for the digital, decentralized and decarbonized grid of the future.
While DERMS can be an on-premise solution, cloud-based systems reduce cost and improve overall performance. A next generation DERMS would tap the cloud to enable greater control and interoperability across heterogenous grid elements located both behind the meter (BTM) and in front of the meter (FTM). These state-of-the-art digital platforms can see, sense and span large portions of grid networks. Ultimately, a cloud-based DERMS will emerge as mandatory for best-in-class grid management practice.
An “All of the Above” Decarbonization Strategy Needs DERMS
While public policy, regulations and investment pressures push for climate action, no silver bullet will solve this crisis. Instead, each utility will develop its own decarbonization pathway based on a variety of factors likely to include the following:
- Existing carbon footprint
- Available renewable resources within the utility service territory
- Regional factors that could include regulatory structures – vertically integrated versus deregulated – as well as customer types (the mix of residential, commercial and industrial, and institutional electricity loads)
- Existing or proposed public policies such as renewable portfolio standards, energy efficiency mandates and/or carbon reduction goals
- The maturity of grid modernization plans
- Internal expertise with new technologies such as the Internet of things (IoT), artificial intelligence (AI) and machine learning (ML)
- The proportion of customers that have invested in prosumer assets such as rooftop solar PV, stationary battery storage and electric vehicles (EVs)
Adequately responding to the climate change threat while maintaining affordable and reliable electricity supply will require an “all of the above” strategy leveraging both existing and emerging technologies. The electric utility industry has already made progress shifting from a system centered around base-load fossil and nuclear plants to a system featuring large-scale variable renewable resources such as wind and solar farms. Nevertheless, the more dramatic change that will make DERMS a necessary key component of any wise grid modernization strategy will be an increased reliance on diverse DERs which will not necessarily be owned by utilities.
These DERs are not just supply-side resources but encompass loads ranging from HVAC units to heat pumps, water heaters and smart thermostats. And increasingly, forms of energy storage fill in the gaps between supply and loads. These storage devices are currently primarily stationary storage devices such as batteries and flywheels, but in the future, will likely include the mobile batteries included in EVs.
While price signals will drive the allocation of these DERs on a real-time basis within the framework of a VPP, utilities still are governed by the obligation to serve. They justly call out the challenge of maintaining this mandate as they feel they have less and less control over the resources they must rely upon to maintain grid integrity. The good news is that the technology to manage what could be chaos and what seemed like a daunting task just a few years ago has matured and is ready for prime time. And that technology is DERMS. In an ideal world, a unified platform that can connect grid to prosumers, control room to grid edge devices, is the ultimate solution.
With DERMS, Problems Are Transformed into Solution
As distribution grid networks become more complex and dynamic, a parallel movement is occurring at the public policy level fostering the integration of large fleets of diverse DERs into wholesale markets with the Federal Energy Regulatory Commission’s (FERC) Order 2222. This shift reflects greater reliance upon DERs as a portion of the future energy resource mix at the same time as large-scale renewable projects such as offshore wind farms or terrestrial solar farms also dominate future wholesale electricity supplies. In short, increased variability and volatility will be the rule of the day. We need a DERMS today that can do the following for both BTM and FTM resources:
- Provide situational awareness to allow for optimized grid constraint management
- Network modeling to fine-tune planning and operations
- Enable more DER connections quickly and efficiently through streamlined program management
- Facilitate new types of grid services, including EV fleet management systems
- Manage monitoring, forecasting, measurement, verification and settlements (the entire DER value chain)
- Engage with all grid stakeholders to co-optimize across the entire value chain
Many entry points are available to reach the end goal of next generation DERMS. Rather than rushing to a solution once a problem occurs, isn’t it better for utilities to upgrade their grid infrastructure as soon as possible? This approach can avoid unnecessary risk and empower utilities to capitalize on fresh opportunities that will arise as DERs (and large-scale renewable projects) dominate the energy transition landscape. This proactive approach allows for detailed analysis and the testing out of DERMS in pilot programs at grid hotspots. A next generation DERMS can build upon an existing ADMS or start from scratch. The key is flexibility. Not all DERMS are created equal. Utilities need to do their homework and find vendors that lean towards open standards and technology-agnostic solutions that can evolve over time to address the certain challenges they will face as they seek comprehensive solutions to global climate change.
The good news is that a state-of-the-art DERMS converts what previously had been considered grid reliability challenges into cost effective solutions for grid balancing. DERMS can widen the aperture of what is possible by better understanding the impact of DERs on the grid and how they can be used to proactively optimize the grid.