Tech Insights

Smart Management: DERMS Evolve To Meet Changing Power Needs

June 07, 2024 by Liam Critchley

As the grid modernizes, distributed energy resource management systems are essential for efficient power management.

Renewable distributed energy resources (DER), such as solar panels and wind turbines, are increasing rapidly due to growing energy demands and sustainability goals. Existing grid management systems often have trouble handling the numerous interconnection requests. As renewable integration soon reaches critical levels, distributed energy resource management systems (DERMS) will be necessary to protect the grid from outages and power disruptions. 

A DERMS platform can help maintain grid stability and improve energy reliability while facilitating the transition toward a more distributed energy model.


Distributed energy resources

Distributed energy resources. Image used courtesy of Adobe Stock


What Are DERMS?

A DERMS software platform helps distribution system operators (DSO) manage DER-based grids. It is similar to a virtual power plant. The DERMS software can manage various DERs—rooftop solar panels, electric vehicle (EV) fleets, behind-the-meter batteries, smart thermostats, and other smart home devices—to balance supply and demand across the grid and distribute energy accordingly.

DERMS software and functions have stemmed from load management systems (LMS) and demand response management systems (DRMS). LMS has been used for decades and is a basic management system to lower system load with one-way communication. DRMS has existed since the early 2000s and provides two-way communication in smart grids to control the load at select grid locations. DERMS are the next logical step, and while similar, they are more advanced and act as grid management tools for helping to ensure the grid remains secure, reliable, and flexible in the wake of DER integration.

DERMS help reduce pressure on the main power grid, especially during peak demand or localized outages. They can also decrease the need to create more fossil-fuel-based power plants. DERMS provide reliability in remote areas because they can localize power and distribute it optimally for balanced grid loads. Since the platforms are integrated with advanced data analytic capabilities, DERMS can also handle large data volumes from diverse sources and provide actionable insights. 


DERMS in Grid Operations

DERMS are found mostly at the distribution grid level. Their main functions are to manage the grid’s voltage, optimize power flow, and handle the local grid load management. DERMS often require other software programs to provide full functional capabilities, including integrating it with utilities, outage management systems, and supervisory control and data acquisition systems. 


DERMS features.

DERMS features. Image used courtesy of NREL


DERMS are key to managing DERs and their integration into the grid. Some key areas where DERMS are vital in today’s energy grids include:

  • Managing EV battery charging and grid utilization to prevent load fluctuations inducing stress on the grid
  • Integrating small-scale renewable energy sources, batteries, and consumer demand response programs to control the energy flow during peak demand periods and ensure grid reliability and stability
  • Enabling the grid to adapt to supply and demand fluctuations, minimizing the impact of disruptions and power outages
  • Maintaining grid reliability in adverse weather conditions
  • Forecasting energy demand and generation of energy to optimize the distribution of DERs


DERMS Variations and Versatility

DERMS refers to any system used with DERs to deliver energy reliably and safely to public utility electricity network operations. No standards exist for DERMS, making choosing a DERM a lengthy process. DSOs must find a DERMS with specific capabilities and features tailored to their needs. DERMS’ versatility enables their use in more grid operations, which means more grid operations can be optimized, but it’s not a “one size fits all approach.” 

Some DSOs use DERMS in decentralized DER management and utilize features such as aggregating behind-the-meter DERs and participating in energy efficiency programs. Other DSOs use fully centralized solutions to help overcome the challenges DERs pose on the distribution grid. 

A standard DERMS model would clarify its purpose and capabilities, but standardization is unlikely. However, many areas could be improved to allow more people to use DERMS platforms. The industry is attempting to develop standards for measuring the performance of different DERMS platforms.


DERMS Future

DERMS will likely become the gateway solution for DER owners to access the wholesale energy market. The platforms can forecast, optimize schedules, and make revenue from DERs. DERMS will also enable DER owners to generate variable power levels for utility companies and participate in Independent System Operators’ energy and reserve services.

DERM integration also has potential in industrial and commercial sites using DERs. DERMS can help businesses decide whether to use their generated power for operations or store it and sell it back to the grid.

As renewable integration increases, DERMS must take a holistic approach and deliver optimal solutions in ever-changing scenarios. Another potential improvement is more advanced data analysis. This involves further adoption and improvements in artificial intelligence and integrating cloud architectures to help scale grid operations.