End-to-End DERMS: Connecting the Control Room to the Grid Edge January 10, 2024 | By Brittany Blair & Lakin Garth Introduction A massive shift is underway across the energy industry, highlighted by a recent analysis that indicates the U.S. electric power system is unprepared for significant, forecasted load growth. Utilities and grid operators have an ever-increasing need for short-term reliability and long-term resource adequacy, particularly as the clean energy transition unfolds. Amid global calls to triple renewable energy capacity by 2030, utilities and grid operators are considering new approaches to meet growth, reliability, and clean energy needs. “In the current market, DERs under control are often utility-owned, encompassing large-scale assets. Simultaneously, dynamic players are focusing on managing grid-edge assets. However, the distinction between these two is not just a separation; it is an opportunity for integration.” Sadia Raveendran, Vice President of Industry Solutions, AutoGrid Driven by a multitude of factors including federal, state, and local clean energy legislation and initiatives, a significant transformation is underway in the U.S. distributed energy resource (DER) market, which is set to almost double by 2027 from 2022 levels. With electricity demand growing for the first time in a decade and fossil assets retiring, the U.S. Department of Energy identified that “…deploying 80-160 GW of virtual power plants (VPPs)—tripling current scale—by 2030 could support rapid electrification while redirecting grid spending from peaker plants to participants and reducing overall grid costs.” Distributed Energy Resource Management Systems (DERMS) will be key to addressing some of the energy transition’s most pressing challenges by enabling utilities to integrate and manage a broad range of DERs. Recently, SEPA had the opportunity to sit down with DERMS expert Sadia Raveendran, VP of Industry Solutions at AutoGrid, for a deep dive into key considerations for DERMS as utilities evaluate the broad range of impacts from increased DERs on their systems. As DERs proliferate, utilities will require more powerful tools to increase visibility within their distribution systems. Examples include both DERMS and advanced distribution management systems (ADMS). Once deployed, these tools increase distribution system automation and help solve power system issues by integrating both behind-the-meter DERs and front-of-the-meter clean energy assets into a centralized system. In its 2022 Utility Transformation Survey, the Smart Electric Power Alliance (SEPA) found both high utility interest in implementing DERMS and a large market opportunity among the utilities surveyed. Beginning with Definitions: DERMS vs. ADMS DERMS and ADMS have many features in common, and their specific definitions vary between utilities and organizations. As Sadia explained, “Alignment around definitions is an important starting point because a lot of the terms are very fluid.” AutoGrid defines a DERMS as a “dynamic orchestrator, facilitating the integration and intelligent management of DERs within the grid ecosystem. DERs include smart thermostats, solar panels, energy storage systems, electric vehicles (EVs), and more. DERMS empower utilities to optimize DER utilization, manage grid congestion, and harness the flexibility of these distributed resources. This synergy is essential for grid resilience and the successful integration of renewables.” Meanwhile, “ADMS serves as a backbone in the control room, providing utilities with monitoring, control, and situational awareness of the grid. It helps ensure grid reliability and stability by providing utilities with insights into the state of the distribution grid, enabling efficient energy distribution, fault detection, outage management, and restoration.” ADMS capabilities include modeling and forecasting, monitoring and control, grid optimization, and economic optimization functions that can provide added value to meet evolving utility needs. Advanced functionalities include dynamic operating limits, look-ahead operations, active network management, and load relief. ADMS solutions can also be used to plan studies, such as non-wire alternatives analysis and DER hosting capacity analysis. Coupling ADMS with flexibility management and aggregation of behind-the-meter assets ranging in scale from residential thermostats to large-scale industrial installations. The Value of an End-to-End DERMS Increasingly, in the dynamic landscape of utility operations, the convergence of ADMS, DERMS, and prosumer engagement technologies plays a pivotal role in shaping the future of grid management. At the forefront, technology providers navigate the realm of control room systems with a network model, enhancing utilities’ ability to actively and proactively manage the network amidst evolving challenges. This combined prosumer-to-grid solution incorporates multiple services while providing real-time visibility and control across all behind-the-meter and utility-scale assets. An end-to-end DERMS approach can provide multiple layers of benefits for utilities and grid operators across programs—from traditional demand response programs to behind-the-meter storage programs to time-of-use rates. These comprehensive solutions offer possibilities for scaling over time rather than requiring an all-or-nothing approach, thereby offering many paths for utilities and grid operators. There are four major categories of benefits for utilities and grid operators deploying an integrated, end-to-end DERMS solution: Reduce time and cost of customer connections. Lowering customer friction to participate in DER programs enables rapid deployment and allows utilities to tap into additional flexibility more quickly. Defer investment in grid infrastructure via non-wires alternatives. Enabling more precise control and dispatch of DERs can help minimize impacts on transmission and distribution systems, thereby deferring costly infrastructure upgrades. Increase capacity with clean DERs. Balancing energy supply and demand through dispatchable demand response (DR) and energy storage resources helps offset intermittent generating resources such as solar PV and allows utilities to add more capacity from clean DERs. Improve grid reliability and power quality. Continuous monitoring and analysis of DER data helps utilities and grid operators detect anomalies and mitigate challenges related to fluctuations in renewable energy generation and sudden changes in demand. DERMS as a System-of-Systems DERMS function as a “system of systems.” DERMS provide utilities and grid operators with a centralized umbrella where various behind-the-meter DER programs can converge. As Sadia put it: “Utilities probably will have smaller programs that are being run by different providers. But all of those programs need to plug into the same broader platform, and all of those providers need to make these assets available for management, distribution, and market participation. There is a need to scale through a system-of-systems approach, which means that everyone needs to play ball.” The system-of-systems approach allows utilities to ultimately act as autonomous DER control systems, regardless of their unique starting points and types and sizes of DER program participants. DERMS and the Evolving Electric Grid In the past, electric system peaks typically occurred in a single season (summer or winter) and generally served as the most significant planning challenge for utilities and grid operators. But with increased electric demand from a variety of end uses, including the expected increase in peak winter loads from space heating electrification and the shift to electric transportation, changes are needed to how utilities plan for grid upgrades and a year-round approach to flexibility management. DERMS serve as a dynamic tool to allow utilities to control DERs at multiple points, thereby providing a flexible solution for the evolving needs of the electric grid. Successfully implementing a DERMS depends on several considerations at the utility level: Holistic integration. A DERMS that lacks the grid-edge or the awareness of the network, is not truly a DERMS. Integrated solutions are key, whether the awareness comes from within the DERMS or outside the DERMS and is integrated within it. Multi-asset connections. A DERMS must be connected to more than one asset class to derive value from a diverse set of residential and C&I DERs. A system is not a DERMS unless it connects to more than one asset class. Scalable infrastructure. As different players take up different parts of the DER ecosystem, there is a need to think about how the system scales beyond one solution. Utilities must commit to designing systems that scale and address issues of scale upfront to prevent problems later on. Interoperability and transparency. All industry stakeholders must prioritize interoperability and access to communications to transmit data between different asset classes and systems easily to optimize the value of DERs. Flexible capacity. Changing supply and demand dynamics lead to more variability, and the need for more flexibility can occur at any time. Thus, flexibility is a requirement both during peak times and at all other times. Conclusion DERMS can catalyze effective management of DERs as the electric power industry navigates the evolving future of the electric grid. As DERs proliferate, a system-of-systems approach is crucial to allow utilities to act as autonomous DER control systems. End-to-end DERMS offer utilities a comprehensive solution to the evolving challenges of the clean energy transition. The flexibility to enter the DERMS journey at multiple junctures ensures that all utilities or grid operators can participate in this transformative new system at the most logical point or points in time. Designing scalable systems upfront will be crucial as we bring more DER participants into these powerful systems. As utilities pursue their carbon reduction goals, DERMS are a valuable tool for realizing the complete potential of their grids. “Dive into AutoGrid’s ebook, “A Grid-to-Prosumer Approach to a Unified DERMS” and discover how to harness the power of distributed energy resources. Share Share on TwitterShare on FacebookShare on LinkedIn About the Authors Brittany Blair Senior Analyst, Research & Industry Strategy Brittany joined SEPA in June 2021 as a Research and Industry Strategy Analyst after having worked on a collaborative Microgrid Tariff whitepaper with SEPA. In her role, Brittany supports SEPA’s research projects on topics including distribution resource planning and managed electric vehicle charging. Prior to joining SEPA, she interned for Newport Consulting on projects pertaining to microgrid business models, net-metering tariff revisions, and transmission & distribution surveys. Brittany holds a MS in Energy Systems Management from the University of San Francisco and a BS/MS in Biotechnology from the University of Nevada, Reno. In her free time, Brittany can often be found reading, hiking in the mountains around Lake Tahoe, and enjoying botanical gardens. Follow Brittany LinkedIn Lakin Garth Director, Research & Industry Strategy | Emerging Technologies Lakin joined SEPA in August 2021 to manage the Utility Transformation Challenge and to provide utility sector decarbonization advisory services for SEPA’s member organizations. Prior to joining SEPA, Lakin spent almost 9 years with The Cadmus Group, most recently as Principal of the Planning and Assessment team where he specialized in demand side management analyses for integrated resource planning for a wide range of utility clients. Before Cadmus, Lakin served as a Senior Planning Project Manager at the Energy Trust of Oregon. Lakin has a Bachelor of Business Administration in International Business from the University of Georgia and a Master of Science in Economics from Portland State University. Lakin lives in Athens, Georgia with his wife and two sons and spends his remaining free time participating in mountain bike endurance racing.