Guest blogger Peter Asmus of Guidehouse Insights writes about the changing DERMS market
The concept of integrated distributed energy resources (iDER) is a broad umbrella. Under this umbrella are platforms designed to maximize shared value across the energy ecosystem landscape. A recent Guidehouse white paper referencing virtual power plants (VPPs) and distributed energy resource management systems (DERMS) spells out why iDER strategies are necessary platforms to keep the grid in balance. Two recent acquisitions reinforce the message that these platforms are mature and are moving into the mainstream.
Traditional Players Move into the Digital Realm
First is the acquisition of AMS, a leading energy storage software provider active in markets such as California and Australia. AMS was acquired by Fluence, the joint venture of industrial giant Siemens and AES, the latter a company focused on large-scale energy storage plays. The evolution of AMS to a digital VPP platform focused on optimizing energy storage speaks to the synergy between advanced batteries and software optimization. As Siemens was a pioneer in VPP deployments in Germany well over a decade ago, it is perhaps revealing that Fluence would gobble up a smaller innovator, though this trend is now well established in the iDER space.
The other acquisition is that of Enbala by Generac. Enbala’s Concerto platform can be used for both VPP and DERMS applications, opening market opportunities in deregulated and regulated energy markets. Generac historically has been a major supplier of onsite fossil generators for residential and commercial applications. Recently, it has followed the path first blazed by rival generator suppliers such as Wartsila purchasing Greensmith Energy Management Systems in 2017 and Aggreko purchasing battery innovator Younicos in 2018. (In 2020, Emerson’s purchase of OSI, which offers a DERMS solution, is yet another example of traditional players moving more firmly into the digital realm.) In all these cases, suppliers of primarily fossil fuel generation solutions see the future and are broadening their solution portfolios to include renewables, energy storage, and most important, software optimized by AI. (Generac has also acquired Pika Energy, a pioneer in direct current solar and wind plus storage home systems.)
What is different in the case of Enbala is a more targeted market approach on the residential market segment. Enbala’s evolution is a proxy for the entire VPP/DERMS industry, starting out focused on larger commercial loads for demand response applications, then expanding use cases and capabilities to tap residential solar and storage fleets for clients such as AGL in Australia, and then offering DERMS solutions.
Enterprise DERMS Defined
DERMS has been a buzzword that has not previously been defined. A new white paper sponsored by Enbala defines an enterprise DERMS as a software platform that operates across an entire network to manage, control, and optimize DER assets to support a distribution grid. If contrasted with a VPP, the primary difference is that a VPP is more focused on economics and frequency balancing with aggregated customer assets. A DERMS instead looks at the same set of DER assets and seeks to resolve voltage and other physical constraints on the distribution grid itself. As the figure below shows, Enbala seeks to guide customers on the long journey from demand flexibility to mixed-asset VPPs and ultimately an enterprise DERMS.
The Journey from Flexibility to VPPs to Distribution Optimization via DERMS
Entitled DERMS: Fact Versus Fiction, the white paper debunks six myths that have shaped past views on iDER. In doing so, it reveals misunderstood technical advances that are now shaping market opportunities. These prospects will grow in the US given the recent Federal Energy Regulatory Commission’s Order 2222, which opens new revenue streams for aggregated DER portfolios.