The McDonnell Group

Distributed Energy Resource Management Takes Smart Grid Beyond DA & DMS

By Don McDonnell

The emerging utility solution category of Distributed Energy Resources (DER for short) includes an alphabet soup of programs and technologies -- some decades old and well proven -- and some a by-product of today’s recent smart grid market developments.

Before I explore DER, some context: The smart grid is about multi-decade utility industry transformation.  It’s a process that will ultimately encompass everything that Ventyx, an ABB Company describes as "Source to Socket” and all that happens from generation to consumer and in between.

So why is DER management the next big thing beyond DA and DMS? First, a bit more detail on what is included in its scope. DER embraces a host of things that utilities have traditionally referred to as “demand-side” resources including demand response, direct load control, and grid-interconnected distributed generation.  When you add distributed energy storage, electric vehicles, and distributed renewable resources including roof top solar to the mix, you have the major elements that comprise today’s DER mix.  EPRI provides an excellent utility DER use case description in its smart grid resource center for those interested in more detail.

For utilities to safely and efficiently integrate DER will require the industry to  completely revisit today’s market management systems, distribution management systems, power dispatch, and distribution automation approaches that are all still rooted in largely central generation and open loop power delivery system designs.

Layering in the need for integrated investor owned utilities to factor in not only the reliability and operational integration of DERs and their effect on power quality and reliability, but also the economic effectiveness of DERs -- grouped into dispatch units commonly referred to as virtual power plants -- and you start to understand the magnitude of both the challenge and huge opportunity posed by the DER market evolution.

We’re bullish about the utility market vision for DER. But we’re keenly aware that the market will take years, perhaps decades, to fully develop with dozens of innovative start-ups creating a patchwork quilt of breakthrough innovations and intellectual property needed to achieve the larger vision. Big market players have already started placing significant bets today on DER software and integration acquisitions. Last year our client Ventyx was acquired by ABB. And just this week our longstanding retained customer UISOL, a leader in DER software and integration, was acquired by Alstom Grid. 

As the market continues to evolve in the wake of FERC’s recent 745 order, today we announced a new relationship with Blue Pillar, a DER company coming out of years of stealth mode development with field proven deployments in mission critical energy management and DG grid integration.

“DER is the hot new smart grid TLA and utilities are taking note PDQ.” Self deprecating humor aside, stay tuned for more on this topic here at our Smart Grid Blog.