The Grid Guy: How Could a DERM Portal Change the Power Grid?

Brad Williams, Vice President, Industry Strategy

There’s a million smart thermostats in search of a leader. And millions more of these smart devices on the edge of the electric grid, generating power or charging, and all are waiting on direction for a higher purpose.

I’m talking about distributed energy resources (DERs) comprising a vast network, of which the majority of these installations are connected behind meters in homes and businesses around the world. The power grid could benefit greatly by joining these DERs in a utility ecosystem that would increase efficiency and reliability for all customers.

What these millions of DERs are waiting for is a portal, or a marketplace that manages the DERs to gain heightened efficiencies. A distributed energy resource marketplace (DERM) portal could pull this disorganized network into a centralized structure working in unison for the benefit of the electric power system. However, this is more than an engineering problem to be solved; it needs customer and regulatory support.

These assets are already in place, and mostly owned by utility end-use customers, and surveys show the majority of customers are willing to lend their DERs for periods of time to ease demand during peak events.

Ok, we’ve got willing parties on both sides. How do we do this? I’m keeping this at a high level, because we all know that the devil is in the details. This will take many bright minds, but I’m confident we can make this a workable solution.

There are some functional requirements

From rooftop solar panels and smart thermostats to electric vehicles and chargers, all are potential resources that utilities can use to ensure reliability and smoother operations for the power grid. Utilities have connection processes and programs for managing DERs, and many customers are enrolling in the programs. In order to facilitate broader DER market operations, such as what is proposed in FERC Order 2222, we need a DER market portal that safely connects the DER data together.

A DER market portal is much more than operational control of smart thermostats and other DERs. It also supports customer and utility DER programs management, field service, and back office analytics that optimize regulation of the grid. A Distributed Energy Resource Management System (DERMS) gives a utility the ability to visualize, model, dispatch and control all of the DER connected to its system.

As I just mentioned, full enterprise-level DERMS should support these key functional requirements:

  1. Operations
  2. Analytics
  3. Programs management
  4. DER device management
  5. Field service

Combined these utility functions are enabled with an infrastructure that can coordinate distributed energy assets across a wide area, as large as an entire independent system operator (ISO) or a regional transmission organization (RTO). The nine ISO/RTOs in the U.S. are where each DERM portal ideally should reside. Similar market operations are required in Europe.

The regulators need to participate

This should be an easy transition toward creating a DERM portal, and the Federal Energy Regulatory Commission (FERC) is helping. FERC order 2222 gives us the opportunity to create this environment. Essentially, with 2222 the FERC is opening the wholesale market to DERs. The state public utility commissions need to follow suit and make it possible for DERs to connect with each local electrical network.

One of the biggest challenges will be the creating a value stream back to the utility. Local jurisdictions and state PUCs are important parts of this potential monetization for utilities. Regulators need to provide incentives for utilities to create programs that benefit customers, and make it worthwhile for both sides to participate.

While the larger DERs can participate directly, like a large battery storage facility, the majority of DERs are small, and need utilities to bring them into the network. Only by aggregating the many thousands of DERs scattered throughout a service territory into a cohesive network can utilities take advantage of the efficiencies these devices can offer.

Thousands of customers own these assets, and control the performance of these devices. Utilities need customer consent to control DERs during a few hours to mitigate a grid constraint that will reduce load, regulate voltage, save energy, and ultimately increase reliability. Regulatory policy is a critical part of the equation. With incentives to create cost-effective programs, utilities will enable customers to participate in the wholesale electricity market and create additional value for customer and utility investment.

Digital twins

The manufacturing industry has used digital twins for several years to predict maintenance and test ideas for how a machine, or a process, might work in the real world. These digital twins are a virtual copy of a physical object, and gives us the ability to see what might happen in different environments.

Some manufacturers have even started digital twin simulations on wind farms to find out how the local topography might affect generation capacity. I think it’s time the utility sector incorporated digital twins. These virtual depictions of actual DERs would help with forecast models, and provide a virtual “air-gap” for validation and cybersecurity between the customer-owned devices and the utility critical operational systems.

With a digital twin forecasting model, utilities could determine with greater certainty just how many DERs might be needed on day-ahead demand schedules. Generation could also be adjusted based upon these models and grid contingencies.

Utilities shouldn’t abuse the permissions that customers are generously giving to connect with their DERs. Digital twins enable a more exact idea of number and duration of DERs that might be needed for future peak events. A lighter touch on everyone’s device would be much appreciated and more sustainable in the long run.

If we do nothing then we’re risking disruption on the grid from numerous issues: reverse power flow, overload of service, voltage swings all of which result in loss of service to customers. With a DER marketplace that communicates with DERs, and incorporates technology for precision forecasting, there’s a huge benefit awaiting the utility industry, and its customers.

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