Generac Grid Services Blog

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? 

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.

Our blog post this week was authored by our friends and fellow Coloradans at the Rocky Mountain Institute (RMI). We think it's one of the best posts we've read in a while, and RMI kindly gave us permission to share it. 

In April, U.S. Secretary of Energy Rick Perry announced a 60-day study on electricity market design and grid reliability, meant to assess to what extent current market designs fail to adequately compensate “baseload” (i.e., coal- and nuclear-fired) power plants.

The memo commissioning the study presents as “fact” a curious claim: “baseload power is necessary to a well-functioning electric grid.” This notion has been thoroughly disproven by a diverse community of utilities, system operators, economists, and other experts that moved on from this topic years ago. To these practitioners, this premise seems as backward as if President Eisenhower, instead of launching the interstate highway system, had called for restudy of the virtues of horse-drawn carriages.

Today, the grid needs flexibility from diverse resources, not baseload power plants. Leveraging market forces to help us decide between options offers the best chance of avoiding the multitrillion-dollar mistake—and gigatons of carbon emissions—of blindly reinvesting in the past century’s technologies.

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

STRENGTHENING YOUR DEFENSES

It seems like almost everyone has had some sort of personal experience with hacking, cyberattacks or malware these days, either at work or at home – and, for many, both.  But did you know that Symantec, the cybersecurity software giant, discovered more than 430 million new unique pieces of malware in 2015 alone?  That was up 36 percent from the previous year, and the numbers keep growing.   

Anyone in the utility industry is also aware that utilities are a target for cyberattacks, but did you realize that hackers target utilities more than any other part of the U.S. critical infrastructure or that there are more reported cyber incidents in the energy industry than in healthcare, finance, transportation, water and communications combined?  

Today's blog was written by our friends at the Smart Electric Power Alliance (SEPA), Advanced Energy Economy (AEE) and Rocky Mountain Institute (RMI). We thank them for their insights, their hard work in compiling this compendium and for letting us share these valuable resources with our readers. 

Keeping up with the influx of new information on distributed energy resources (DERs) can be daunting. DERs are physical and virtual assets that are deployed across the distribution grid, typically close to load, and usually behind the meter, which can be used individually or in aggregate to provide value to the grid, individual customers, or both. A particular industry interest seems to be centered on DERs — such as solar, storage, energy efficiency, and demand management — that can be aggregated to provide services to the electric grid.

The energy industry’s focus on DERs is a function of how important it’s become to understand the potential capabilities they have to offer. In 2015, U.S. electric utilities spent $103 billion in capital expenditures to maintain and upgrade the grid — and they now expect average annual spending of around $100 billion through 2018, even as growth in electricity demand slows.

These two trends combined could raise retail rates significantly for electricity customers, as much as 15% to 30% through 2030, according to one study. To modernize the grid for two-way energy flows and incorporate new, connected technologies, while maintaining minimal rate impacts, all available resources, including DERs, need to be put to best use.

To reach this goal, we need to start with a common base of foundational knowledge on DERs -- key articles and resources that are easily available to all stakeholders -- which is the purpose behind this piece.

Cities around the world, including 22 cities in the United States and a growing number in Canada have pledged to go 100% renewable. It’s a noble, collaborative effort to be the cleanest, most environmentally sustainable cities on the planet, with an ultimate and cumulative end goal of each city doing its part to reduce worldwide carbon emissions.

Many cities that have made the pledge don’t yet have a route to an all-renewables, carbon-free destination. Some don’t have ownership of their electricity providers and thus have little or no influence over power fuel sources. Others depend today on energy sources that are based almost entirely on fossil fuel, making the renewables transition particularly difficult.  Still others are dealing with high permitting costs for popular renewable options like rooftop solar, as well with other regulatory obstacles. Technologically, anyone switching to a renewables-based grid must, by default, deal with the intermittency and reliability issues imposed by wind and solar. Even hydro electric energy is generally limited by the amount of water flowing in rivers, a quantity that can vary significantly over time.

A broader question, however, is why a fully renewable grid is more desirable than any other combination of zero-carbon energy sources. And what the overall effort and cost would be to decarbonize via that pathway alone.

Ham and eggs. Abbott and Costello. Batman and Robin. Hey, there are a lot of great duos in the world, and here’s another one: building management systems and automated demand response (DR) designed specifically for small- to medium-sized companies.

What makes this a great combo?

CREATIVE FINANCING OPTIONS OPENS THE DER DOOR TO SMALLER BUSINESS CUSTOMERS

We all know the big guys – large commercial and industrial (C&I) customers – have been able to participate in wholesale markets thought demand-management programs for years. Now, small C&I customers are gaining this opportunity, too.

What gives? The financing.