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DERMS: Benefits and Challenges of a decentralized generation

The traditional grid was typically powered by a few centralized power stations that would deliver electricity over a very large geographical area. This type of system is expensive to expand, due to the extra costs involved with large powerlines, and energy loss during transmission over long distances. There was also the issue of potential service disruptions if a power plant tripped, or power lines went down in an area. To counter this issue, many grids have embraced DERs.

Distributed Energy Resources (DERs) are becoming more popular accessible for many. The sizes and uses of these resources could vary from small residential usage to grid level multimillion-dollar battery storage systems. Types of DER can vary greatly, but by connecting more decentralized DERs with the grid, the end users could rely less on the grid. This connection point would typically be the software platforms known as DERMS.

A Distributed Energy Resources Management System (DERMS) are typically a software system that helps manage Distributed Energy Resources. Apart from stating the obvious, DERMS can typically coordinate a few or many DERs to operate with increased efficiency, from the facility level to the utility level. From optimizing renewable energy integration to enhancing grid reliability, DERMS play a crucial role in revolutionizing our energy landscape.

DERMS: Opening the 2-way street of energy generation.

There are various types of DERMS available on the market, but the common point of DERMS usually involves software that activates and helps coordinate the aggregated DERs within power grids. How a DERMS operates will depend on the types of energy resources and assets available, and that range could be via a small coordination within commercial purposes, or utility level operators of large battery energy storage systems (BESS).

The connection between the grid and DERMS is where the core value lies.  Renewable DERs such as solar panels and smaller wind turbine generators would be connected to the grid via net-metering, where the electricity generated would be directly contributed to the grid, but the output can be managed if quicker activation is required during sudden demand increases, such as hot summer days when the solar is likely to be more valuable. Smaller diesel or gas generators could be turned on as well but they would typically be more efficient as local generation, but could also contribute to ensure energy stability during extreme grid demand peaks. A DERMS could help coordinate the output distributed energy resources to help meet the sudden demands in the grid, without requiring intermediate generation such as natural gas or hydro dams to be activated.

When net-metering isn’t viable, the alternative turning to stored energy. Battery energy storage are becoming more accessible in the modernized grid, but and also widely dispersed between residential, commercial, industrial, and grid level operations. Utilizing the smaller energy storage into the grid is becoming more challenging, especially if done manually. DERMS would effectively connect all the different types of energy resources and optimizes their energy dispatch at the highest efficiency with the lowest emissions produced from generation. The main financial benefit of many BESS is due to being chargeable during lower-demand times to help mitigate the costs of high grid demand. A DERMS would automatically coordinate the battery dispatch during times such as high hourly energy pricing, to demand response activations in markets, significantly reducing the pay-back period for the original investment. The coordination of DERs can avoid energy disruptions and ensure the energy security of the grid, and generate revenue for DER operators. The end users are no longer just energy consumers, but active participants in the grid, all while automating their resource management.

Why are DERs not automatically managed?

Coordinating multiple DERs, each with its unique characteristics and intermittent nature, presents a technical hurdle. DERMS must navigate the intricacies of bidirectional energy flows, grid balancing, and voltage regulation to maintain a stable and efficient grid. It would likely benefit the grid, but would require the correct knowledge to be implemented properly. Different DERMS could also operate under different parameters, which makes coordination on a grid-level difficult.

Security is also another major concern. The DERMS operate by collecting a large amount of grid and local energy data, which is analyzed and shared with other DERMS or grid tools in order to make the most informed decisions. Managing the amount of data is difficult, but ensuring the data is validated and private is part of the cyber security challenge. For example, a DERMS with enough resources under management could provide as much energy to the grid as a small power plant, which would be vulnerable to cyberattacks. DERMS security could be as important as safeguarding any other part of grid infrastructure. While there has been no issues in coordinating the safety of DERMS, it remains a potential vulnerability due to the decentralized nature.

If you’re interested in connecting your BESS to a DERMS, Edgecom has a Network Operations Center, which is powered by pTrack to ensure the battery is charged and dispatched at the most optimal time around the grid’s activities. It is also the first of its kind in using blockchain based security to ensure energy security is not compromised. If you’re interested in getting the most out of your DERs, contact us today.

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