6-minute read
The following article is excerpted from our webinar “Harnessing the power of DERMS: Enhancing the grid’s flexibility and reliability,” now available on demand. Click here to access the webinar replay and learn more about how DERMS contributes to a more resilient, sustainable electricity grid.
As the penetration of distributed energy resources (DERs) accelerates, utilities are navigating new challenges in maintaining grid stability, optimizing energy distribution, and managing an increasingly decentralized network. The variability of solar and wind generation, the rapid growth of electric vehicle (EV) adoption, and evolving regulatory requirements demand more advanced operational capabilities.
A distributed energy resource management system (DERMS) equips utilities with the real-time visibility, control, and optimization necessary to integrate DERs effectively. By orchestrating distributed assets at both the grid-edge and system-wide levels, DERMS enhances reliability, reduces peak demand, and supports cost-effective grid modernization.
In a recent webinar, our industry experts explored four key DERMS use cases that are driving measurable benefits for utilities:
- Flexible interconnections: Enabling seamless DER integration while maintaining grid stability
- Virtual power plants (VPPs): Aggregating DERs into dispatchable resources to support grid needs
- Load management: Optimizing demand response and behind-the-meter assets to balance supply and demand
- Vehicle-to-grid (V2G) integration: Leveraging EV batteries as flexible storage and grid support resources
In this article, we examine these use cases in detail, outlining their value and implementation considerations for utilities.
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WEBINAR
Harnessing the power of DERMS: enhancing the grid’s flexibility and reliability
Use case #1: Flexible interconnections
As the adoption of DERs grows, utilities must find ways to integrate these assets into grid operations without compromising stability or efficiency. Flexible interconnections allow DERs to be dynamically managed in response to real-time grid conditions. This approach ensures that energy flows efficiently while maintaining system reliability and meeting regulatory requirements.
Key benefits
- Enhanced grid reliability: By dynamically balancing supply and demand, flexible interconnections help mitigate the variability of renewable generation and prevent localized grid disruptions. Advanced monitoring and control systems enable utilities to adjust energy flows in real time, reducing the risk of voltage fluctuations and overloads.
- Cost reduction: Integrating DERs more effectively reduces dependence on centralized power plants and the need for costly transmission and distribution infrastructure upgrades. By leveraging existing distributed assets, utilities optimize energy delivery and defer capital expenditures.
- Regulatory compliance: Many state and federal policies require increased DER integration as part of decarbonization efforts. For example, California’s Senate Bill 100 mandates that the state’s electricity supply be 100 percent carbon-free by 2045. Flexible interconnections support compliance by enabling a smoother transition to a grid with higher levels of renewable penetration.
Challenges
- Regulatory hurdles: The integration of DERs often requires navigating complex regulatory frameworks that vary by state and region. Ensuring alignment with evolving interconnection standards and permitting processes can slow deployment.
- Interoperability: DERs come from multiple vendors, each with its own communication protocols and operational characteristics. To ensure seamless integration, utilities need advanced control platforms and standardized technologies that enable different DER systems to work together efficiently.
By implementing flexible interconnections through DERMS, utilities can better manage the evolving energy landscape while improving reliability, cost-effectiveness, and compliance with clean energy mandates.
Use case #2: Virtual power plants (VPPs)
As DER adoption continues to grow, utilities are looking for ways to harness these distributed assets as reliable grid resources. A VPP aggregates multiple DERs into a single, dispatchable power source. By coordinating the operation of these resources, utilities can use VPPs to balance supply and demand, reduce reliance on centralized generation, and enhance overall grid flexibility.
Key benefits
- Increased utilization of renewable energy: By aggregating and optimizing energy generation from diverse sources, VPPs improve the efficiency of renewable assets. Excess solar generation, for example, can be stored in distributed batteries and discharged when demand is high, reducing curtailment and maximizing the value of intermittent resources.
- Enhanced grid resiliency: A decentralized energy supply reduces the grid’s dependence on large power plants and transmission infrastructure, making it less vulnerable to outages and disruptions. In times of grid stress or extreme weather, VPPs can provide localized support by dispatching stored energy where it’s needed most.
- New revenue streams: VPPs enable both utilities and DER owners to participate in energy markets. By aggregating DERs into a coordinated resource, utilities can offer ancillary services such as frequency regulation and peak load reduction. Individual DER owners can also generate revenue by selling excess energy back to the grid.
Challenges
- Managing vast amounts of real-time data: A VPP requires continuous monitoring of multiple DERs, each with unique operating characteristics and performance metrics. Ensuring that these assets respond effectively to grid needs requires advanced analytics and control systems.
- Efficiently coordinating diverse DERs: DERs vary in capacity, response time, and availability. Integrating them into a single, reliable resource demands sophisticated aggregation strategies and interoperability between different device manufacturers and software platforms.
By leveraging DERMS to coordinate VPPs, utilities can transform distributed assets into valuable grid resources, improving resilience, market participation, and the integration of renewable energy.
Use case #3: Load management and demand response
As electricity demand becomes more variable due to the growing adoption of DERs and electrification trends, utilities are seeking innovative ways to balance supply and demand. Load management and demand response use real-time data, automation, and customer engagement to strategically shift energy consumption, particularly during peak demand periods. By reducing strain on the grid, these programs help improve reliability, efficiency, and sustainability.
Key benefits
- Improved customer satisfaction: By reducing the likelihood of outages and voltage fluctuations, load management enhances service reliability. Demand response programs also allow customers to actively participate in grid stability efforts, often with financial incentives for shifting energy use to off-peak hours.
- Support for sustainability goals: Shifting demand to align with renewable energy availability reduces reliance on fossil fuel-based generation. For example, utilities can encourage EV charging and smart appliance usage during periods of high solar or wind generation, minimizing carbon emissions and improving grid flexibility.
- Enhanced grid efficiency: By dynamically adjusting energy consumption in response to real-time grid conditions, utilities can reduce peak demand, optimize resource utilization, and defer costly infrastructure investments. Smart thermostats, water heaters, and commercial demand response programs all contribute to a more responsive and balanced grid.
Challenges
- Customer participation: Demand response success depends on customers opting in to programs and modifying their consumption patterns. Utilities must ensure clear communication, offer attractive incentives, and integrate automation to reduce the burden on participants.
- Stakeholder coordination: Effective load management requires collaboration between utilities, regulators, technology providers, and aggregators. Standardizing communication protocols and ensuring interoperability across different systems and devices are critical for seamless program execution.
By leveraging DERMS to integrate load management and demand response, utilities can better align energy consumption with available supply, improving reliability, cost-effectiveness, and sustainability.
Use case #4: Vehicle-to-grid (V2G) integration
The rapid adoption of EVs presents both challenges and opportunities for grid management. V2G technology enables EVs to act as mobile energy storage units, drawing power when charging and feeding energy back into the grid when needed. By integrating EVs into grid operations, utilities can improve flexibility, stabilize supply and demand, and enhance the value of renewable energy.
Key benefits
- Increased grid stability: EV batteries serve as distributed storage assets, helping to balance supply and demand. During peak periods, aggregated EVs can discharge energy back to the grid, reducing stress on traditional generation and distribution systems.
- Revenue opportunities for EV owners: V2G programs allow EV owners to participate in demand response and ancillary services markets. By discharging stored energy when prices are high and charging when prices are low, owners can generate additional revenue while supporting grid reliability.
- Support for renewable energy integration: By storing excess solar and wind generation during off-peak hours and deploying it when demand is high, V2G enhances the value of intermittent renewables, reducing curtailment and improving overall system efficiency.
Challenges
- Infrastructure development: Widespread V2G adoption requires investments in bidirectional charging stations, communication networks, and grid integration technologies. Standardization and interoperability between EV manufacturers, utilities, and charging infrastructure providers remain key hurdles.
- Securing participation from EV owners: While financial incentives can encourage participation, some EV owners may hesitate due to concerns about battery degradation and charging availability. Educating consumers and designing flexible participation models will be critical for scaling V2G programs.
By leveraging DERMS to coordinate V2G integration, utilities can transform EVs from grid stressors into valuable assets, improving reliability, reducing costs, and accelerating the transition to a cleaner energy future.
