This week's blog is authored by Rick Nicholson, Global Product Management and Marketing, Enterprise Software, for ABB. We asked Rick to provide his insights on ABB's newly announced investment in Enbala.
ABB recently announced an investment in Enbala, made through ABB’s venture capital unit, ABB Technology Ventures. The announcement also mentioned that ABB and Enbala are joining forces to develop a new distributed energy resource management system (DERMS). The joint solution will combine the benefits of Advanced Distribution Management Systems (ADMS) and DERMS to enable utilities, energy service companies and grid operators to efficiently manage the entire lifecycle of distributed energy resources, like solar, batteries and wind, while ensuring the safe, secure and efficient operation of the electric distribution network. It will also enable more active participation from energy consumers.
A stronger, smarter, greener grid
Why did ABB make this investment and choose to partner with Enbala to develop a DERMS solution? The answer to this question is based on the current state and expected evolution of distributed energy resource management.
Driven by a combination of forces such as a move to a low carbon future, financial incentives and dramatically falling costs of technologies such as solar PV and batteries, utility customers have been connecting distributed energy resources to utility distribution grids at ever-increasing rates.
Many of the same forces are driving the deployment of microgrids that, when connected to the grid, are in of themselves a distributed energy resource that must be managed. As the penetration of distributed energy resources increases, this will create both challenges and opportunities.
Quality and reliability stays steady
A critical concern for distribution system operators will be maintaining power quality and reliability on distribution networks that weren’t designed for the injection of power at the edge of the grid. This problem forms the basis for one of the two current major use cases or applications for distributed energy resource management. Navigant Research defines a DERMS as “a control system that enables optimized control of the grid and DER, including capabilities such as Volt/VAR optimization (VVO), power quality management and the coordination of DER dispatch to support operational needs.” ABB is already a leading provider of advanced distribution management systems to utilities. These installed systems help utilities operate their distribution systems under both normal and emergency conditions. They do not, however, provide the capability to monitor and control high penetrations of distributed energy resources on feeders that are typically behind the customer’s meter. By integrating Enbala’s technology with ABB’s ADMS distribution system operators will be able to address this key challenge.
A revenue stream sweetens the deal
The other major use case or application of distributed energy resource management falls into the opportunity category and is referred to as a virtual power plant (VPP). The Navigant Research definition of a VPP is “a system that remotely and automatically optimizes DER dispatch via an aggregation and optimization platform linking retail to wholesale markets.” By aggregating distributed energy resources an energy retailer, power generator or energy trader can bid those resources into wholesale power markets and, if planned and executed well, can make money. ABB has been involved in the development of technology for VPPs since the early days of this concept and is working with Enbala to investigate how its technology will complement ABB’s existing VPP solutions.
What lies ahead?
The future of distributed energy resource management will be both more complex and more exciting because it hinges on the development of distribution-level markets for DER. These markets may be structured centrally in a similar fashion to existing wholesale markets, could be structured in a more decentralized mode, or might even include peer-to-peer energy trading enabled by blockchain technology. Regardless of the eventual structure of DER markets, ABB envisions DER market management as a major component of its DERMS solution. ABB’s network control software already supports independent system operators globally that are responsible for running wholesale power markets, and ABB’s energy portfolio management software serves wholesale market participants, enabling smarter bidding and settlement activities. Applying these capabilities to DER markets and integrating them with the distribution operations aspects of DERMS provides a roadmap to the evolution of distributed energy resource management.