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. 

Earlier this summer, I posted about the extreme heat wave challenging the Pacific Northwest. The summer has brought a myriad of challenges around the Northern Hemisphere. From flooding in Europe to wildfires across the West, severe weather and changing climate patterns continue to strain electric power grid operators tasked with keeping lights on in homes, businesses and critical facilities. In the utility world, the term “resiliency” is offered daily as the goal. “Keep the power grid resilient.” Distributed energy resources (DERs) play a critical role in achieving these targets in two complementary ways. At the risk of sounding pedantic, we need to address reliability at the grid level and resiliency at the end customer site.

A few days ago, we were contacted by an interested professional in Norway who had read our newest white paper, which I co-wrote with Guidehouse Insights to dispel the many myths surround distributed energy resource management systems (DERMS). He posited that Norway may be the world’s largest distributed energy resource (DER) system, noting that 90+ percent of the country’s electricity comes from numerous local, but interconnected, hydro stations. He pointed out that when rainfall is high, electricity is relatively inexpensive and that when it’s low, coal-fired power needs to be imported — a dynamic that’s changing with Norway’s ongoing construction of wind power. Noting that the country’s grid has operated for many years without 21^st century grid management, he pondered what could be done with modern DERMS technology to minimize waste and improve the performance of the grid.

Like countless industry associations, the Smart Electric Power Organization—better known as SEPA—had planned to hold its annual Grid Evolution Summit this year in Washington, DC. But rather than kicking off as planned, the yearly event “clicked on” in mid-July, with a virtual format that included several live sessions, followed in August by pre-recorded “bonus sessions” focused on topics with a high degree of interest and relevance to today’s utility industry.

One of the topics covered Trends in Behind-the-Meter Distributed Energy Resources (DERs), and Enbala CEO Bud Vos was one of the featured speakers, providing insights on how grid operators and utilities can manage DERs at the microgrid, virtual power plant (VPP) and distributed energy resource management system (DERMS) levels. Speakers also explored how DER management trends impact value streams, market opportunities and grid services across various use cases.

I’m wondering how everyone out there is doing today. As I sit down to write this blog, many thoughts and ideas swim through my head about what to write. Should I ruminate on how the virus that has turned all our lives upside down will impact the utility industry? Should I speculate on what the future will bring, offering theories on how long this will last and the different scenarios that might play out when summer peak loads arrive? Or perhaps offer beacons of hope and optimism? 

The French author Andre Gide coined an oft-copied phrase, “Everything that needs to be said has already been said,” and in this case, there is a lot of truth in that.  The virus is all anyone has been talking and thinking about for days, weeks or months now—depending on where you happen to live. Many of us, including me, are experiencing serious information overload; I feel like I’ve been drinking from a fire hose.

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?

Guest blogger Peter Asmus of Navigant Research posts this week about the vast potential for virtual power plants and distributed energy resources in Japan. 

The first solar PV cell made in Japan was in 1955; the first solar PV panel was connected to the Japanese grid in 1978. Japan emerged as the global leader in solar cell production in 1999 and then solar power generation in 2004. Though solar PV provided only a small portion of Japan’s overall energy supply, it showed that the country’s regulators were investigating distributed energy resources (DERs) well before other markets globally.

Japan is at a crossroads. How does one leap into the future epitomized by the concept of the Energy Cloud while simultaneously maintaining the centralized generation status quo?  The country is exploring how virtual power plants (VPPs) can help straddle this chasm, serving as a bridge from the past to the future.

Guest blogger Peter Asmus of Navigant Research posts this week about the widening use of distributed energy resources around the world, virtual power plants and distributed energy resources management systems.

As distributed energy resources (DERs) continue to proliferate, so do the reliability challenges associated with the world’s aging grid infrastructure. The diversity of resources added to the power grid include plug-in EVs (PEVs) and rooftop solar PV coupled with energy storage devices at residences. As the grid was not designed for two-way power flows, these trends create challenges and opportunities for vendors and grid operators.