Decoding DERMS: Options for the Future of DER Management
Research

Decoding DERMS: Options for the Future of DER Management

  • Investing in DERMS allows utilities to build and operate VPPs for peak load management comprising multiple DER device types.
  • There are multiple participation models for effectively managing DERs, each offering different advantages for capturing value from grid services.
  • DERMS enables a new approach to utility operations, providing enhanced visibility and decision-making.
  • Utilities should consider an incremental approach to DERMS implementation.
  • Regulatory evolution is needed to ensure efficient investments in future DERMS.

Several converging trends are transforming the electric grid in the United States including:

  • Increasing variable renewable energy generation,
  • Rising electricity demand,
  • Grid decentralization driven by the adoption of distributed energy resources (DERs), and
  • Increasing need for electric grid resilience in response to extreme weather events.

Traditional, infrastructure-centric approaches are insufficient to deliver reliable, affordable power in this new reality. The generation, transmission, and distribution upgrades needed are simply too expensive and time-consuming to be effective on their own. Fortunately, demand flexibility has the potential to enable utilities to meet the needs of the future at much lower cost with greater speed and optionality.

To manage this complexity and harness the benefits of DER adoption, utilities and market operators are turning to distributed energy resource management systems (DERMS). DERMS is a collection of software systems that interact with utility operational (OT) and information technology (IT) systems to integrate, manage, and optimize DERs, ensuring reliable and efficient grid operations.

Summary

In this white paper, we explore how DERMS can facilitate a new paradigm for grid operations by providing real-time monitoring, control, and coordination of both front-of-the-meter (FTM) and behind-the-meter (BTM) assets. Utilities can build and scale VPPs with DERMS that provide reliable flexibility by leveraging DERs to shift and shape load.

Load flexibility, when paired with selective infrastructure upgrades, has the potential to enable utilities to effectively manage evolving pressure on the grid and continue to deliver reliable, affordable power across the United States.

Authors:

  • Lakin Garth, Director – Research and Industry Strategy, SEPA
  • Brittany Blair, Senior Analyst – Research and Industry Strategy, SEPA
  • Zach Pollock, Director of Grid Strategy and Emerging Technology, Xcel Energy
  • Jason Delaney, Leader of VPP Development and Expansion, Arizona Public Service
  • Seth Frader-Thompson, President and Co-founder, EnergyHub
  • Paul Hines, Vice President – Power Systems, EnergyHub
  • Sophia Hadeka, Content Marketing Specialist, EnergyHub

With Additional Contributions from Project Partners:

  • Xcel Energy
  • Arizona Public Service
  • EnergyHub

Decoding DERMS: Options for the Future of DER Management