Generac Grid Services Blog

I have posted several blogs in the past few weeks, focused on the potential to improve the operation of the electric power grid, reducing losses, and driving the overall efficiency up. Some of the thoughtful comments that have been posted by readers have provided food for thought. One comment was particularly important to this discussion…

“What’s best for players individually is not what’s best for the public and for the system as a whole.”

This comment reveals an issue that may soon be a problem.

For most of the 130-year history of the electric grid, utilities have charged residential customers for energy used and have NOT charged for peak power demand, as they do for commercial and industrial accounts.

This week, we feature guest blogger Peter Asmus of Navigant Research, who talks about virtual power plants (VPPs) and their changing role in the utility industry.

The primary goal of a virtual power plant (VPP) is to achieve the greatest possible profit for asset owners—such as a resident with rooftop solar PV coupled with batteries—while maintaining the proper balance of the electricity grid at the lowest possible economic and environmental cost. The purpose is clear, but getting to this nirvana is not easy. Nevertheless, there are clear signs that the VPP market is maturing. New partnerships are pointing the way for control software platforms that can manage distributed energy resources (DER) in creative ways.

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

This week's blog is authored by Rick Nicholson, Global Product Management and Marketing, Enterprise Software, for ABB. We asked Rick to provide his insights on ABB's newly announced investment in Enbala. 

ABB recently announced an investment in Enbala, made through ABB’s venture capital unit, ABB Technology Ventures.  The announcement also mentioned that ABB and Enbala are joining forces to develop a new distributed energy resource management system (DERMS). The joint solution will combine the benefits of Advanced Distribution Management Systems (ADMS) and DERMS to enable utilities, energy service companies and grid operators to efficiently manage the entire lifecycle of distributed energy resources, like solar, batteries and wind, while ensuring the safe, secure and efficient operation of the electric distribution network. It will also enable more active participation from energy consumers.

A stronger, smarter, greener grid

Why did ABB make this investment and choose to partner with Enbala to develop a DERMS solution? The answer to this question is based on the current state and expected evolution of distributed energy resource management. 

Raise your hand if you sometimes feel like Mr. Scott from the original Star Trek series, frantically trying to keep the engines roaring while the ship takes one phaser hit after another: If you did raise your hand, you’re not alone. There are plenty of reasons utilities might be playing the Mr. Scott role.

One is under investment in infrastructure, which was named as the top concern by 47 percent of utility executives who answered a Utility Dive survey late in 2015. Another is what the California Independent System Operator calls the Duck Curve. It shows how behind-the-meter solar installations are creating daytime over-generation on the California grid and, because rooftop solar quits generating power about the same time people come home and start using more of it, there are steep ramps at the end of the day.

Demand response programs could help utilities deal with these issues. But, utilities that are doing simple demand response are kind of like Star Trek’s Scotty. They’re just getting by, handling one crisis after another, giving it all she’s got, Captain. “I don’t think she can take any more!”