How to choose a DERMS strategy that works

Choosing a DERMS strategy that works begins with understanding what separates one platform from another, integration needs, and utility use cases.

Technology companies chasing the holy grail of power grid software controls love to paint distributed energy resource management systems (DERMS) as the next big thing. However, DERMS strategies aren’t new to OATI, which pioneered the first utility DERMS in 2009 with Kansas City Power & Light (now Evergy).

That’s the driving force behind OATI’s message of a DERMS that works. The industry is spot-on: DERMS is a revolutionary applications for grid management, orchestrating a wide-array of distributed energy resources and enabling flexibility for dynamic load management. But implementation of DERMS with legacy IT and OT systems has proved cumbersome for newcomers who have come to recognize the depth of power systems experience required by enterprise-level grid control platforms.

Since launching the segment more than 15 years ago, OATI has maintained its stature as the most deployed DERMS with more than 225 utilities currently using the platform. Over that time, we’ve learned that every utility’s DERMS strategy must begin with a clear understanding of the platform’s capabilities and a vision for current and future use cases.

What is a distributed energy resource management system (DERMS)?

Consensus continues to elude the utility industry on what makes a DERMS a DERMS. That’s partly due to certain technology providers only possessing pieces and parts of DERMS functionality. OATI DERMS is the only enterprise-level platform capable of providing end-to-end orchestration, from meters to markets, while also offering modularity depending on utility use cases and deployment preferences.

• Aggregator or edge/Virtual Power Plant DERMS focuses on customer-owned, behind-the-meter assets, handling all customer-facing functions. That includes end consumer engagements and enrollment, forecasting, dispatch, and control of the assets by the utility, customer notifications, and performance calculation and billing determinants. Aggregator DERMS asset types are most often managed through asset manufacturer head ends and relationships.
• A Grid DERMS is centered on grid operations, providing real-time visibility into system operations via a Distribution SCADA or ADMS, and has forecasting and control of dispatchable DER assets. The Grid DERMS provides information directly to the ADMS about DERs and the DER forecasts based on the ADMS needs. Furthermore, a Grid DERMS tends to be more closely tied to large front-of-the-meter assets given their direct grid connection. 
• Enterprise DERMS is a top node DERMS which serves as a “single pane of glass” for all demand response and DER programs, bridging both commercial and grid operations, and facilitating energy market participation. Enterprise DERMs can directly manage, control, and dispatch select assets and programs, while also incorporating one or multiple third-party aggregator DERMS assets and programs into one common system for streamlined operations. The Enterprise DERMS is then the single common point that interacts with aggregator DERMS, a grid DERMS, the wholesale market, various legacy systems, and is the single source of validations and settlements across all aggregators and Curtailment Service Providers (CSPs).

Pitching a DERMS strategy

In 2019, NCEMC, an electric cooperative tasked with supplying power to 2.5 million North Carolinians, needed a new DER management platform. But their needs, and use cases, were unique.

The generation and transmission utility, which serves 26 distribution electric cooperatives, couldn’t send event notifications to customers. It didn’t have a comprehensive view of demand response availability or a central way to dispatch multiple programs.

The grid, meanwhile, was in the midst of a transformation—one that blurred the line between transmission and distribution and enabled two-way power flow. Communities demanded resilience without necessarily defining it. NCEMC executives knew they needed a different tool but wanted to maintain a sustainable pace of integration and deployment.

OATI’s pitch stood “head and shoulders” above the competition, according to NCEMC CEO Joe Brannan. Its cloud-based DERMS solution would relieve NCEMC’s IT staff of care and maintenance while avoiding many of the integration potholes that plague software additions. The platform also allowed NCEMC’s member cooperatives to independently run their demand management programs.

As a not-for-profit, NCEMC didn’t have millions stashed away for research and development, like some investor-owned utilities do. A reputable partner was critical, and the platform had to work. The utility was familiar with OATI’s dominance in managing electricity markets and believed it had a unique perspective on the interplay between bulk power and distribution.

That “upstream alignment,” as Brannan describes, set OATI apart because of their deep understanding of the transmission system and power flows. NCEMC wasn’t pressured to go too big too fast and could instead layer new functionality onto the system as their needs evolved.

“Part of the journey was realizing that who we worked with had to take as seriously as us both the security and the operational excellence that the grid requires,” Brannan told POWERGRID. “So having a partner like OATI that thinks like us, understands how we’re pacing ourselves, has been very helpful.”

Picking a DERMS strategy

Utilities have a diverse set of considerations to make when selecting the DERMS provider and platform that fit their needs.

Above all else, Stevens it’s crucial for utilities to know that DERMS is, and has been, ready for primetime. But utilities should be aware that no standard or agreed-upon classifications exist yet for DERMS. DERMS solution providers, who are not all created equal, develop and characterize their products based on their strengths, which can add to the confusion.

Grid DERMS, as an example, has its roots within the ADMS world and expands from there. The behind-the-meter aggregator vendor pool, however, may have limited knowledge or experience about the grid and grid conditions. That leads to “pockets of DERMS functionality,” Stevens said, while an Enterprise DERMS bridges those gaps.

Utilities love standards, and those are great. But they’re moving targets. What’s classified as a grid DERMS today might be something different a few years from now.

Linda Stevens, Chief Strategy Officer, OATI

DERMS platforms are complex and are not easy to build. Fully understanding the platform’s integration process, application, and maintenance needs is critical for utilities beginning this journey.

A representative at an investor-owned utility once asked OATI DERMS experts, “How many DERMS do I need to have?” There’s no perfect answer, but the journey begins with what’s under the hood at each utility, not a product brochure.