I take the bus to work. On any given weekday, you can find me waiting on the side of a road while vehicles of all shapes and sizes whiz by, leaving behind a trail of noise and exhaust. It would be all well and good if this was just another weekday annoyance that could be easily shrugged off, like a fresh pile of snow blocking the sidewalk or a texter blissfully skipping the line at a busy coffee shop. But that’s not the case. Vehicle exhaust is a known pollutant that significantly affects human health and the environment. Regulators put limits on emissions – but these generally focus on new car sales, and then they can still be tampered with. So as a commuter waiting at the side of a busy road, I don’t feel too reassured. But, when I see that clean technology goals for electric vehicles are on track, hear announcements from companies like Tesla, Thor and Volvo electrifying trucking fleets, and read about commitments by governments to support these efforts, I do feel hopeful.
Science has told us that we must reduce carbon emissions if climate change is to be kept below acceptable limits. The transition has led us in many new directions. Most politicians outside the US believe that our energy supply must be based entirely on renewable energy. This alone creates a large issue, in that the electric grid supplies less than 20% of total energy needs. The proposal to replace all fossil fuel with renewable capacity would require a potentially large increase in grid capacity. Ironically, many politicians typically include nuclear generation among the sources to be eliminated. The one bit of good news is that the efficiency of electrical devices is often better than fossil fuel, and the existing grid operation using a generation following load approach results in a system that can deliver more energy.
The results to date have been frustrating, both in costs and performance, and there are many serious problems that may make a complete conversion very difficult. These challenges include a lack of grid and generation capacity to handle the added electrical load, as well as the operation of the existing grid with extensive distributed devices.
Distributed energy resources (DERs) give us big opportunities to build cleaner and more reliable power grids, but to be optimally effective, those resources need to orchestrated so that they are aggregated, optimized and controlled for the grid services that are needed – precisely when and where they are needed.
The platforms for achieving this orchestration encompass both Virtual Power Plants (VPPs) and Distributed Energy Resource Management Systems (DERMS). Many who talk and write about these platforms use the terms interchangeably, as if one is a synonym for the other. For those of us at Enbala who have made harnessing the power of distributed energy our life’s work, we respectfully disagree. There are foundational differences that significantly impact what can – and what can’t – be done with the DERs being harnessed.
What’s the difference – and why should you care?
There are a lot of acronyms floating around the energy world these days. It’s a veritable alphabet soup of evolving terms that are often hard to distinguish from one another. This is especially true when it comes to distributed energy – it’s a relatively new concept in and of itself, and when the terms that define this evolving move to the grid edge aren’t inherently self-defining, the ensuing confusion complicates the equation. What’s the difference between DERs and a DERMS? And what’s the definition of a DERMS versus a VPP? Just as important what difference does it make?
REDEFINING SUCCESS FOR A DISTRIBUTED ENERGY GRID: THE THREE TENETS
In our first “Three Tenets” blog we talked about the importance of speed when it comes to effectively leveraging distributed energy resources (DERs), and in the second one we wrote about the importance of accuracy. In this one we add a third dimension of criticality – scalability. From our perspective, these are by far the top three critical success factors today when it comes to successful DERMS and VPP projects and the determining factors for the long-term viability of these projects as increasingly larger numbers of distributed energy assets find their way onto the grid. There are, of course, other important factors, but many that topped the criteria list during the early phases of DER adoption have been far overshadowed in today’s world by the need for the triumvirate combination of speed, accuracy and scalability.
It’s been said that analogy is a powerful force when it comes to innovation. It creates an environment where it’s easier for people to apply knowledge from one domain that they already understand to another that they don’t understand quite as well – and thus make it, too, easier to grasp.
Uber is a prime example of analogy taken, perhaps, to the extreme. It would be tough to estimate the number of companies that have come into being recently aiming or claiming – to be the “Uber for ....” – you fill in the blank. There’s an “Uber for errand running,” an “Uber for pet care,” an “Uber for tool rental,” an “Uber for grocery (and alcohol) delivery,” an “Uber for finding parking spaces…” You get the picture.
I have posted several blogs in the past few weeks, focused on the potential to improve the operation of the electric power grid, reducing losses, and driving the overall efficiency up. Some of the thoughtful comments that have been posted by readers have provided food for thought. One comment was particularly important to this discussion…
“What’s best for players individually is not what’s best for the public and for the system as a whole.”
This comment reveals an issue that may soon be a problem.
For most of the 130-year history of the electric grid, utilities have charged residential customers for energy used and have NOT charged for peak power demand, as they do for commercial and industrial accounts.
This week, we feature guest blogger Peter Asmus of Navigant Research, who talks about virtual power plants (VPPs) and their changing role in the utility industry.
The primary goal of a virtual power plant (VPP) is to achieve the greatest possible profit for asset owners—such as a resident with rooftop solar PV coupled with batteries—while maintaining the proper balance of the electricity grid at the lowest possible economic and environmental cost. The purpose is clear, but getting to this nirvana is not easy. Nevertheless, there are clear signs that the VPP market is maturing. New partnerships are pointing the way for control software platforms that can manage distributed energy resources (DER) in creative ways.
IN CASE YOU MISSED IT:
Virtual power plants or VPPs are one of the hottest topics in the energy industry today. In fact, investments in VPPs are expected to total over $68.6 billion by 2025 -- this according to Navigant Research, who has published a new white paper on the topic.
Software advancements are enabling greatly expanded capabilities in the distributed energy resources (DERs) that can be aggregated into VPPs, which are now capable of responding to the needs of the power grid at the sub-second speeds required for instantaneous grid balancing.
Titled Stacking Values with Virtual Power Plants in Today's Digital Power Grid: Moving Distributed Networked Energy Into the Mainstream, the paper was authored by Navigant's Peter Asmus and covers:
- The expansion and convergence of VPP market segments
- New distributed energy resource architectures
- Physical VPP grid and market interaction values
- ROIs on VPPs
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.