No longer bit players, distributed energy resources (DERs) have stepped into the spotlight.

In its 2018 State of the Electric Utility survey, Utility Dive found that utility professionals ranked DER policy as their #2 concern behind physical and cyber security and rated integrating renewables and DERs as their #4 top issue.

No wonder: DERs have the potential to revolutionize the power system. They can help utilities avoid or defer expensive infrastructure investments, improve resilience, boost reliability and allow greater integration of intermittent generation. They can support a more flexible and efficient grid, providing energy, capacity and ancillary services to the distribution and bulk power systems.

And yet, despite their promise, DERs also represent a significant threat to utilities and power systems. So much so that Navigant Research has labeled DERs as “one of the most disruptive factors affecting the grid of today and the future.”

The challenge is how to integrate all of those DERs into everyday operations while incorporating them into long-term investment strategies.

Clearly, what’s needed is not merely to integrate DERs but also to manage them in a way that benefits the consumer, values the role of the utility, maximizes their value and improves grid operations. Utilities must reduce risks and get more value from existing DERs while preparing for a future with even greater levels of DERs.

The technology to serve this need is the Distributed Energy Resources Management System, or DERMS.

DRMS: A first step toward control

The Smart Electric Power Alliance defines DERs as “physical and virtual assets that are deployed across the distribution grid—typically close to load, and usually behind the meter—that can be used individually or in aggregate to provide value to the grid, individual customers, or both.”

That definition includes distributed generation, energy storage, direct load-control devices, microgrids and demand-side resources.

But — reflecting the concerns expressed by utility professionals — left unmanaged, DERs can disrupt distribution systems.

Often, the first response to the challenge of DERs is to implement a point solution such as a demand response (DR) program. A more rigorous approach is to implement a Demand Response Management System (DRMS).

A comprehensive DRMS goes beyond single-customer-class, single-program and single-asset approaches. Instead, it can deliver dispatchable DR to all programs, assets and customer groups. These systems work well for many of the DR program types including behavioral DR, dynamic pricing, critical peak pricing, time-of-use pricing and Bring Your Own Things programs.

DERMS: Logical next step

DRMS solutions are in fact a step toward the all-DERs approach of a DERMS. The enabling technologies behind both include artificial intelligence and machine learning. For this reason, as Navigant pointed out in its 2016 Leaderboard Report on DRMS, in many ways the two technologies are beginning to merge, with DERMS becoming the logical next step.

A DERMS is a software-based solution to monitor, dispatch and control, in real time, grid-connected and behind-the-meter DERs across customer, utility and market applications. A system of systems, DERMS extends the Distribution Management System (DMS) behind the meter to the customer. While many providers may claim their product is a DERMS, the ability to manage the grid and DERs in real time is a key differentiator and, according to GTM Research, what sets a solution apart as a true DERMS.

When reviewing and analyzing DERMS technologies, look for systems that take a platform approach to building capabilities, can target dispatch to DERs, scale easily and deploy quickly.

DERMS allow “… utilities to move beyond legacy DR programs to reach out and control a greater diversity of DER assets to provide a much broader suite for grid services,” researchers at Navigant said in a 2018 white paper. Use cases for DERMS encompass a spectrum of applications from behind the meter to transmission and distribution system services, and to market applications such as Virtual Power Plants (VPP), capacity contracts, energy trading and ancillary services.

Navigant picks DERMS leaders

Navigant conducted an in-depth analysis of the DERMS market in early 2019, evaluating the strengths and weaknesses of 16 vendors offering DERMS for DER and grid-management solutions. The research firm selected three providers as “leaders,” the top category, all having “… mastered the management of DER with deployments in different markets and regulatory environments.”

One of those leaders, AutoGrid, rated highly in the flexibility management category for its DRMS, DERMS and VPP applications, all modules that plug into its AutoGrid Flex™ platform. The other leading firms included Enbala and Siemens.

“These companies have differentiated themselves from the competition,” the report’s authors said, “through exceptional product performance, strong vendor partnerships and a sustainable business model.”