With distributed energy resources on the rise, a model-aware distributed energy resource management system enhances their reliability. In 2021, many advancements contributed to the growth of the renewable energy market. Specifically, there was the convergence of favorable economics, including lower distributed energy resource (DER) costs and increased incentive programs, as well as legislation pushed by the Biden administration’s goal to reach a 100% carbon-free power sector by 2035.
As the deployment of DERs rapidly increases, it is important to acknowledge how the use of these technologies in the race to decarbonize electricity will require smart systems like distributed energy resource management systems (DERMS). DERs include energy storage, electric vehicles and their chargers, solar photovoltaics (PVs), heating and cooling systems, inverters and more. DERMS can help existing grids to achieve stability and flexibility, DER aggregation and deferred capital costs, a few of many issues current energy grids and utilities are looking to address.
Utilities, grid operators and legislators must understand that reaching net zero is not possible without recognizing the current renewable energy landscape and broader role of integrating DERs into the grid. Coordinating these assets is essential to the energy transition in 2022 and beyond.
Incentives And Legislation
Incentives coupled with new technology and increased consumer interest in renewable energy resources all are driving down the price of DERs and further support the creation of an environment where DERs can thrive.
In September 2020, the Federal Energy Regulatory Commission (FERC) approved Order 2222, empowering new technologies to come on-line by making it possible for DER aggregators to compete in all regional wholesale electric markets. This order is paving the way for more grid flexibility, innovation and competition. Marking a transformative time for DERs, the FERC order also is expected to lead to an increase in nonregulated aggregators and virtual power plants (VPPs) as well as create a space for DERMS to attain more value from these resources.
The Build Back Better Act, approved by the U.S. House of Representatives in November 2021, calls for an investment of US$550 billion spread out over the next 10 years toward clean energy and away from fossil fuels. Mainly, this bill looks to support the overall growth of renewable energy by providing powerful tax incentives to implement the adoption of wind and solar power. Seen as one of many catalysts to cut greenhouse gasses and carbon emissions, the Build Back Better Act — with its heavy focus on renewable energy growth — also serves as momentum for the implementation of DER and DERMS by making these resources more accessible.
In particular, the tax incentives in the Build Back Better Act are expected to cut the cost of rooftop solar panel installations by 30%. This will encourage more Americans to take advantage of their own clean energy generation. In addition, electric vehicles would be made more affordable, as qualified consumers would be eligible for a $7500 tax credit.
More recently, the $1.2 trillion Infrastructure Investment and Jobs Act of 2021 allocated more than $80 billion toward enabling the clean energy transition. Specifically, this bill includes $5 billion in grants for states to deploy public electric vehicle chargers and another $2.5 billion to support stations for electric vehicle charging or fueling vehicles with hydrogen, propane, or natural gas.
To spur innovation and support DERs, such as solar panels and electric vehicle charging equipment, the bill also put $3 billion toward the U.S. Department of Energy’s Smart Grid Investment Grant program, created in 2007 to fund billions of dollars of grid technology investments after the 2008 recession.
Funding from the Infrastructure Investment and Jobs Act is not only making way for innovative technologies like DERMS but also for existing grids to successfully balance supply and demand using DERs. While infrastructure upgrades will continue to be necessary in many markets, DERMS help to provide a non-wires solution that can lessen stress on distribution as well as the assets themselves. Programs like the Smart Grid Investment Grant program have laid the necessary foundation for the introduction of intelligent grid management systems. The next series of funding — whether it comes from the Build Back Better Act or legislation further down the road — will be key in supporting the distribution of DERs and grid modernization
In the latest report from the International Energy Agency (IEA), it is forecasted renewable resources are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than one-half. This report also highlights that, to achieve net zero, it is important to understand the current role renewables play in addition to the essential role of grid integration. Without both simultaneously working together, reaching this goal will not be possible.
A Smarter Energy Future
Enabling the internet of energy in the future will be determined by the ways in which DERs and DERMS work together. As DERs continue to evolve, utilities and grid operators will need new ways to monitor and control these assets.
Using artificial intelligence, DERMS serve as one solution that can learn and respond to customer usage patterns, adjusting to manage various types of DER classes. DERMS can be deployed to aggregate groups of small, emerging behind-the-meter resources and orchestrate them for a larger impact on the grid. DERMS also can integrate with existing DERs, virtual power plant vendors and legacy systems, such as advanced distribution management and supervisory control and data acquisition systems. Here, they provide optimization of front-of-the-meter and behind-the-meter assets for operators using legacy systems without requiring difficult, time-intensive and costly upgrades. When DERMS integrate with virtual power plant vendors, they become a platform enabling DER owners to participate in energy markets, a benefit that could further boost DER adoption.
As adoption increases, it is imperative utilities prioritize these solutions of the future. Many existing enterprise applications used in operations management today are comprised of large code bases created decades ago. Modifications to these systems typically are difficult and expensive, and many were not designed to scale support for the large number of DERs that will be deployed. Using a properly architected DERMS, new sources of renewable energy can be integrated seamlessly, without disrupting existing infrastructure, and make reaching short-term goals on the introduction of renewable energy resources more attainable.
Scalability And Flexibility
On top of DERMS being able to easily integrate with legacy and future systems, if properly architected, they also can support rapid prototyping and agile project deliveries, reducing total project time and cost. These agile methods can seamlessly adapt to changes in operating procedures, business rules and programs as well as easily scale for expansion. Their adaptability and scalability also lead to another benefit — providing flexibility and a future-proof design. This enables utilities to keep their distribution system in sync with a dynamic and unpredictable market, while minimizing the associated costs.
As acknowledged in its Renewables 2021 report, the International Energy Agency indicated that even though the cost competitiveness of DERs like solar PV and electric vehicles are driving the expansion of renewables, the major roadblock of the lack of grid infrastructure will curtail expected growth. That is where DERMS come in; they enable utilities and consumers to get the most from the existing grid.
With electric vehicles alone increasing a home’s energy consumption by up to 50% or more, transformers in need of replacement and even newer ones that do not have the right capacity to manage the load are set to experience a multitude of issues. This is where DERs and DERMS must come together to minimize the impact on existing infrastructure. A model-aware DERMS can dispatch DERs to enhance operational efficiencies and improve reliability.
The adoption of renewable energy resources shows no indication of slowing down any time soon, with recent incentives and legislation that continue to propel innovations in the renewable energy sector forward. With the shift away from carbon-emitting fossil fuels and transition to using DERs, understanding the role of DERMS will be essential in ensuring a successful clean energy transition for years to come.
While much work needs to be done to keep up with renewable energy growth, the integration of modernized, smart and data-driven grids serves an irreplaceable purpose to improve environmental impacts, resilience and efficiency for the incoming wave of new technologies set to improve the world.
Andy Bennett is CEO of mPrest Inc., a developer of distributed asset orchestration and optimization software.
