Platform
Grid-Edge DERMS
Customer Engagement
Demand Forecasting
BYOD
Customer Engagement
Demand Response
EV Charging
Incentive Processing
Program Design
Program Management Automation
Flexible Dispatch
Virtual Power Plants
API Integrations
The majority of the U.S. grid and accompanying energy infrastructure is old, which is a significant factor in the retirement of fossil fuel plants: it’s not necessarily their efficacy but their age. Analysts believe that upgrading the entire U.S. grid is projected to cost more than $2.5 trillion by 2035, a figure that promises to increase due to inflation, supply and demand, and regulatory and legislative challenges. By contrast, virtual power plants are roughly only 40% to 60% of the total cost of building a generation plant. One of several demand flexibility initiatives, virtual power plants leverage distributed energy resources (DERs) through the use of a distributed energy resource management system (DERMS), specifically a Grid DERMS that manages utility-held DER assets like solar or battery installations or a Grid-Edge DERMS that aggregates behind-the-meter DERs found in places like residential, commercial, or industrial properties.
Through the use of a Grid-Edge DERMS platform, demand flexibility programs like virtual power plants, demand response, and EV charging can leverage these behind-the-meter distributed energy resources (DERs) like solar, battery energy storage systems, electric vehicles and EVSE chargers, and smart home devices like thermostats or water heaters to shift load to when and where it’s needed, while saving on costly infrastructure upgrades. Ultimately, Grid-Edge DERMS provide an affordable alternative to infrastructure upgrades and aging legacy load control systems.
The State of U.S. Energy Infrastructure
The majority of the U.S. electric grid was built in the 1960s and 1970s, meaning that the grid is at least around 50 years old. Between age, environmental pressures, and increasing demand, the American Society of Civil Engineers (ASCE) gave U.S. energy infrastructure a D+ rating, down from a C- in 2021; the grid is failing. With demand on the rise, driven by increased and erratic volatile weather, supply chain and tariff challenges, and the rapid development of energy-hungry AI and data center projects, utilities are faced with trying to meet demand with limited resources and aging technology, like legacy load control systems.
What is Legacy Load Control?
Legacy load control refers to older, existing demand control systems to curtail demand during peak grid events. For smaller operations, such as cooperatives or municipal electric companies, legacy load control represents an existing resource, albeit an aging solution that gradually becomes obsolete. An example of a legacy load control system is the one and two-way radio switches that were initially employed for demand-side management programs like demand response.
In this case, these are simple devices that are physically installed on DER assets like thermostats to control temperature set points for aggregate conservation events. By contrast, modern Grid-Edge DERMS leverage expanded broadband access and the Internet of Things (IoT) for a comprehensive and cost-effective device control solution. By using a Grid-Edge DERMS, utilities save on physical devices, while broadening their potential clientele for member-based demand flexibility programs. Likewise, as legacy load control systems age, the cost to replace them with affordable alternatives will continue to increase.
Expenses Associated With Legacy Load Control
As the name implies, legacy load control systems represent older technology and involve additional resources to maintain. As such, these systems require attention to routine maintenance, which involves staff researching archaic manuals or determining solutions to out-of-date problems. Likewise, legacy load control system users need to stay attentive to the physical environment of their systems, which are challenged by environmental elements like temperature, humidity, and dust, in some cases, meaning a change of location or extra power needed to ensure a properly controlled atmosphere. Additionally, control system power supplies, which are prone to change with innovation, must be maintained, while network communications are essential to ensuring proper device control.
What’s Old Isn’t New Again
In January, the incoming administration declared a national energy emergency, predicated on grid reliability issues. As part of that initiative, the Department of Energy (DOE) acted to defer the retirement of fossil fuel plants, which are typically scheduled to retire aging technology that has become untenable to operate, especially as cheaper alternatives are available. In mid-August, Utility Dive reported that while these deferments have aided with grid resiliency, they have cost utilities and ratepayers alike $29 million in 38 days alone.
Concurrently, the Environmental Protection Agency has proposed a repeal of environmental greenhouse protections that require existing and new plants to eventually capture 90% of carbon emissions. Unfortunately, evidence supports that these fuel sources—fossil fuels—will, like the deferment of fossil fuel plant retirements, prove more expensive over time.
In comparison, the demand flexibility programs enabled by Grid-Edge DERMS are an affordable alternative, a stopgap during the energy transition that leverages existing behind-the-meter DER resources for use in both conservation and renewable energy initiatives. For example, demand response and EV charging shift load to off-peak periods of consumption by shifting charging times and changing temperature set points to decrease usage. Likewise, virtual power plants can redistribute communally-generated energy from solar or battery storage energy systems to repower the grid during peak periods of usage.
The Value of Demand Flexibility Programs
Demand flexibility programs have proven to be useful in mitigating demand through programs like demand response, which had more than 10.3 million customers enrolled in 2022 for an accumulative conservation of over 1 terawatt-hour of energy. A recent example of this is the potential of virtual power plants in California. According to the Brattle Group, this statewide investment has the potential to save ratepayers $206 million between 2025 and 2028 alone. In both cases, these programs are scalable, meaning increased savings and load shifting opportunities as the program grows, while legacy load control systems will only become less viable with time.
Legacy Load Control vs. Grid-Edge DERMS Conclusion
Although cost-savings are king, evidence supports that legacy load control will only become less useful with time, while Grid-Edge DERMS is a flexible, scalable solution. As such, investment in virtual power plants and Grid-Edge DERMS software isn’t just an upgrade, but a paradigm shift from these older, more rigid systems. For cooperatives, Grid-Edge DERMS shifts operations from a simple “shed load” model to a more sophisticated “manage and optimize DERs” model, all while leveraging the behind-the-meter DERs already in place and continuing to be adopted by communities. Grid-Edge DERMS are a future-proof opportunity designed to grow with utility operations, while providing the most value with the least resources. What are you waiting for?
Do you have the right Grid-Edge DERMS for your needs?
