Generac Grid Services Blog

This blog post is authored by special guest Peter Asmus of Guidehouse Insights

Utilities, governments and major corporations alike are committing to 100% clean energy goals in the coming decades. Utilities will need to lean on smart software platforms, such as a distributed energy resources management systems (DERMS), to keep grids that are increasingly dependent upon variable renewables, such as wind and solar, in balance. 

These highly sophisticated platforms enable greater control and interoperability across heterogeneous grid elements. The value of DER assets can only be fully realized if they are integrated at customer sites and brought into a grid network to create shared value. At Guidehouse Insights, we use the term Energy Cloud to describe this transition. 

I was recently invited to meet with a class of students studying energy and the future, and as a part of the session, I was asked to prepare a challenge for the students to work through. The result was interesting and showed a glimpse of what may lie ahead. It will certainly be a challenge that will require innovation, new concepts and a lot of hard work.

I showed a small area, powered by an electric utility (20% of total energy), natural gas (25% of local energy) and petroleum products (45% of total energy). The electric utility had capability to increase its energy delivered by about 25% in the next decade, and the students were asked to show how to minimize the emissions in that timeframe. They were free to add solar thermal or solar PV capacity to the system.

At the start of the summer demand response season in North America, grid operators have already used Enbala's Concerto™ platform to dispatch about 100 events to keep the grid stable as heat waves settled upon the western half of North America. Our thoughts are with those in the extreme heat, and we know that describing rising temperatures — coupled with wildfires and severe weather — as "disruptive" is an understatement. However, high temperatures point to the need for distributed energy resource (DER) orchestration to keep the grid stable and to help keep utility customers as comfortable as possible.

Guest blogger Peter Asmus of Navigant Research writes about the virtual power plant market in Europe. 

Guest blogger Peter Asmus of Navigant Research writes about the evolution of the virtual power plant market in Australia. 

Australian consumers boast one of the highest per capita consumption rates of electricity in the world (even greater than the U.S.). These consumption levels translate into flexible load resources ideal for aggregation and optimization into virtual power plants (VPPs).

What is a VPP? Think of it as a conglomeration of many distributed energy resources (DERs -- loads, but also generation, batteries and electric vehicles -- that can be combined into a pool whose sum of parts’ value is far larger than these DER assets offer individually. With sophisticated artificial intelligence software, these resources scattered across the grid can be combined “virtually” to provide the same services as a traditional 24/7 power plant -- but at much lower and environmental cost.

Energy systems are changing. As variable renewable energy generation replaces retiring fossil fuel-run power plants, we see a shift from our century-old mindset of centralized supply following demand, to a more distributed grid with distributed energy resources (DERs) playing an essential role in a sustainable energy future. In order for renewable energy resources and DERs to replace conventional power plants, they need to be able to act like power plants – virtually at least.

At technology and innovation’s finest hour, we are able to aggregate disparate, geographically dispersed DERs and orchestrate them in such a way that they are able to respond to the grid’s needs at the same speed and accuracy as a traditional power plant. That’s where the Virtual Power Plant (or VPP for short) comes in. Navigant Research defines a VPP as:

“… a system that relies upon software and a smart grid to remotely and automatically dispatch retail DER services to a distribution or wholesale market via an aggregation and optimization platform”

VPPs are critical for the transition to more sustainable energy systems – so where is the technology at? Where can we find VPPs? And what can we expect in the future?

The California Duck Curve reveals a potential costly issue for utilities and their customers. The annual peak load appears to be continuing to grow -- because it occurs after dark when there is no solar power being generated -- yet energy sales may be declining with the growth of distributed solar generation during the day. This results in the need to continue to expand the grid, but without the sales revenue to support the added capital expense, presenting a Catch-22 that utilities are struggling to overcome.

Opening the Distributed Energy Doors is a Win-Win

In November of last year, FERC issued a Notice of Proposed Rulemaking (NOPR) around electric storage resources. The goal was to better allow these distributed energy resources (DERs) to compete in the various wholesale markets.  Per their November press release, FERC’s NOPR would require that RTOs/ISOs:

• Establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodate their participation in the organized wholesale electric markets
• Define distributed energy resource aggregators as a type of market participant that can participate in the organized wholesale electric markets under the participation model that best accommodates the physical and operational characteristics of its distributed energy resource aggregation

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?

There’s a good reason that traditional demand response (DR) programs only ask C&I customers to curtail energy usage a few times each year. Traditional DR is painful. It’s a no-holds-barred, shut down that conveyor belt, stop production, turn off the air conditioner and send people home kind of deal. It is, by definition, disruptive. And, frankly, not every organization can afford to have its business endure even a few interruptions a year.

But, DR doesn’t need to be disruptive, and to get the most out of today’s demand management technology, we really need to think of curtailment events as a day-to-day method of grid support instead of troublesome headaches that must be painfully tolerated.

That’s what one East Coast utility is doing with the Symphony by Enbala^TM distributed energy resource management platform (DERMS). By aggregating small amounts of response from many different devices in one site, a promising pilot is showing that curtailment can be both effective and invisible to customers.