Generac Grid Services Blog

Moving from VPPs to DERMS: A Global Phenomenon Driven by EVs

Posted by Peter Asmus on May 23, 2019 10:00:00 AM

Guest blogger Peter Asmus of Navigant Research posts this week about the widening use of distributed energy resources around the world, virtual power plants and distributed energy resources management systems.

As distributed energy resources (DERs) continue to proliferate, so do the reliability challenges associated with the world’s aging grid infrastructure. The diversity of resources added to the power grid include plug-in EVs (PEVs) and rooftop solar PV coupled with energy storage devices at residences. As the grid was not designed for two-way power flows, these trends create challenges and opportunities for vendors and grid operators.

PEVs and Grid Reliability

iStock-177326504PEVs are a conundrum for utilities. If not managed intelligently, PEVs can pose a threat to overall grid reliability. A new report from Navigant Research shows that the market for PEVs grew by approximately 70% between 2017 and 2018. By 2030, the same report anticipates that the global population of PEVs could reach 190 million. PEVs represent mobile loads equivalent to an entire home. The size of these loads, and their capacity to suddenly appear and disappear, is a phenomenon giving grid operators heartburn.

Yet, if aggregated and optimized with smart controls, PEVs can offer diverse grid services (as noted in a recent blog). Transforming these road-facing assets into grid-facing resources can be enabled by the virtual power plant (VPP) model. VPPs of the future will increasingly diversify the types of DERs they incorporate. Because of this, PEVs are gaining significant market share. PEVs are fueling growth in what Navigant Research has deemed as mixed-asset VPPs, aggregations that also include generation, energy storage and just about any asset that can be sensed, controlled and transformed into a grid service.

Across Europe and Asia Pacific markets grid operators are joining North American counterparts in seeking to modernize legacy demand response (DR) programs, widening the pool of DER assets and the services they can provide. VPPs are focused on economics and grid services, such as frequency regulation, that can be provided over a wide geography. DER management systems (DERMS) can be viewed as an umbrella above VPPs or the flip side of a VPP. The Navigant Research Leaderboard: DERMS Vendors report looks at the issue of increased DER management from an active power management perspective focusing on the distribution grid, resolving issues such as voltage hotspots.

The VPP market is mature, but its evolution to DERMS is likely a natural response to the need for the optimization of distribution networks based on the anticipated popularity of prosumer DER assets. This is especially true for PEVs since they affect the distribution network in direct ways. PEVs are ideally suited for frequency regulation, a major VPP use case. They can also provide reactive power and voltage balancing—services that are more aligned with DERMS deployments by grid operators.

Grid Balance Is Key

The buzz around DERMS remains high. As noted in a new white paper, most utilities and aggregators start their journey to DERMS with VPP use cases centered around the monetization of revenue streams from DR, capacity and ancillary services such as frequency regulation markets. Enbala’s new CONCERTO platform is one example of the changes rippling through the electric utility industry. This change enables a shift to DERMS as PEVs as other DER pools grow, requiring a more surgical approach to resolve grid balance equations.

Any viable VPP or DERMS solution needs to incorporate a power system view within its optimization and control architecture. Broader market trends point to moving beyond siloed solutions, targeting specific DER assets, and evolving toward platforms that can connect to and control the value that exists in diverse mixed-asset pools.

Download the paper

Topics: DERs, virtual power plant, distributed energy, VPP, DERMS, distributed energy resources,, EVs, Renewables, PEV

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