Why You Should Invest Now In DERMS

The energy landscape is rapidly changing, and utilities face new challenges and disruptions from a variety of sources. From global decarbonization goals to increases in customer disintermediation that reflect greater consumer access to distributed energy resource (DER) technologies, the grid is changing. Fortunately, DER technologies pose an opportunity to utility providers to reimagine their renewable energy strategies and enhance the demand response initiatives needed to meet net-zero goals. Through the Internet of Things, DER technologies can be combined to meet many needs, from controlled conservation events to utilizing renewable energies to meet peak demands. Distributed energy resource management systems (DERMS) are designed to manage, control, and guide these disparate efforts. 

What Are Distributed Energy Resource Management Systems (DERMS)?

Simply put, a distributed energy response management system (DERMS) is the software solution that manages a group of distributed energy resource (DER) assets or devices. DERMS are designed to help utilities manage the forecasted and real-time energy demand with supply, by shifting load, providing emergency demand energy, and managing grid strain. This software is what enables utilities to connect with household devices like:

As a management tool, DERMS can help enroll and control devices, optimize for time of use rates, and even unify DERs to form a virtual power plant. DERMS solutions are designed to manage a variety of tasks by interconnecting and unifying various devices. Through that, utilities can use resources previously outside of their purview, by tapping into renewable energies and enhanced conservation efforts.

Why You Should Invest Now in DERMS

Problems with old outdated infrastructure and dated grid models continue to challenge or prohibit the adoption of renewable energy solutions, even as barriers for homeowner access to green technology solutions decrease. Beyond renewables, smart technologies are more interconnected today than ever, a trend that promises exponential growth over time. That means devices like smart thermostats or water heaters are primed more than ever to integrate seamlessly into demand response program strategies. Utilities can realize the potential revenue growth that can come from integrating new energy sources under a robust DERMS platform. 

While the challenges presented by a rapidly evolving tech landscape aren’t new, they are growing increasingly complex; finding solutions is becoming more important than ever. Whether it’s in enhancing your DER technology strategies or growing your demand response programs, finding the right DERMS solution is critical to managing your intended goals. 

Future-Proofing Through DERMS

By offering distribution-level grid control to manage distributed energy resources (DERs), DERMS helps utilities to the diversified energy portfolio needed to meet global 2050 net-zero goals. In addition to diversifying grid assets, DERMS lower barriers between homeowners and utilities to the adoption of emerging renewable energy devices. The longer your utility delays adopting DERMS programs, the more opportunities you’re missing to save on peak load costs, tap into new device energy sources, and provide active and reactive power control that is now a necessity with such a dynamic and changing load shape. 

Existing and potential government regulations, as well as new affordable smart devices in the market, are changing how consumers use energy while challenging utility programs in previously unseen ways. Utilities that neglect to have a system in place that can expand and adapt to these changes are going to fall increasingly behind market trends. Essentially, if you don’t begin scoping and planning for a DERMS solution now, you’re already behind the curve. 

DERMS programs (like any new system) require an initial investment, set-up time, and customer recognition to gain momentum and create robust demand response programs. While there are understandable hesitations about the cost of obtaining the right DERMS for your utility operation, investing now will pay off dividends on your return. Maintaining the status quo means paying higher wholesale prices during peak load times, losing control of a growing sector of renewable energy devices, and missing opportunities to provide evolving solutions for your customer’s needs. 

What Are the Risks to Investing in DERMS?

Understandably, not all utilities have adopted DERMS software solutions yet. First, there’s a confusing landscape of vendors and solutions to select from, which makes evaluating your options cumbersome. Not all DERMS platforms are created equal, as they offer different device integrations, capabilities, features, and functionality. Navigating these options in itself can be overwhelming, and tempting to stick with familiar (if outdated) solutions. Add to that the back-end integrations and system implementation with your utility and IT teams necessary to the locational grid and for asset state information, and DERMS adoption becomes that much more complicated.

Interested utilities should consider evaluating potential DERMS vendors not only based on cost but implementation requirements and efforts. Furthermore, it’s critical to have internal cross-department buy-in, to show cost savings, and new revenue capabilities, along with the long-term benefits DERMS will provide after overcoming those initial efforts and costs. To better future-proof your utility operation, implementing the right DERMS to your needs is a long game, but one that can pay off in the end.

What Should A Successful DERMS Model Include?

While you may already be acutely aware of the unknowns surrounding DERMS adoption, you may be struggling to determine what criteria you should use to select and establish a robust DERMS model that will fit your needs as well as expand into the future. Ideally, your solution will allow you room to grow and expand into any new device type that hits the market, so you will only have the upfront launch investment once. Keep scalability and flexibility in consideration. For example, with a SaaS-based so you receive constant updates and improvements as capabilities expand. So what options are out there?

First off, not all DERMS are created the same. A purpose-built DERMS solution is often designed to realize all potential programmatic goals for a utility, whether that is needed at the moment or not. Purpose-built DERMS are often unwieldy and require a significant investment of capital and working hours to realize.

Vendor-driven solutions are, in many ways, the opposite of that. These DERMS are managed by a third party, which cedes control away from the utility operation while simultaneously handing over the useful data analytics necessary to further develop your program needs. By contrast, an integrated SaaS DERMS model offers utilities an affordable and altogether flexible alternative respective to budget, time, and scale.

Qualities of a Robust DERMS Solution

Customer engagement is integral in developing any program. Ideally, search for a DERMS that is customer-friendly allowing for easy enrollment, adoption, and device management. Pay attention to which solutions offer incentive processing and rich communication systems to educate homeowners about savings opportunities, and/or to communicate before and after peak events.

The right end-to-end DERMS solution includes management such as event-calling, forecasting, or event deployment software, that keeps the user experience centered on customer satisfaction. Eliminating customer barriers to enrollment, engagement, and education saves you the effort of launching different programs that may not always communicate together, such as separate email solutions that don’t necessarily interface with distributed energy event management.

Lastly, modularity is key to minimizing costs and developing a future-forward solution. Because technology more than doubles in speed and capacity every year, the need for new features and functionality in the software solutions will also increase. Picking the right software partner from the outset ensures that they understand the current and future energy landscape, and are anticipating your needs in real-time. 

Investing Now In DERMS Conclusion

Renewable energy isn’t simply the future for our planet, it is inevitable, and utilities must adapt to the changing green energy landscape. DERMS are a simple way to achieve decarbonization goals, while embracing the future together, both utility providers and customers alike. With a burgeoning prosumer base and global climate change mitigations, pursuing energy alternatives and increased conservation efforts has never been more important. With powerful reporting, education, and control mechanisms, SaaS-based, scalable DERMS are designed to solve tomorrow’s grid problems today. Is your operation ready?

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About The Author
Stacia Secreriat blog author

Stacia Secreriat is a senior digital marketing specialist, with a background working for innovative technology companies. From analytics to website optimization, Stacia shapes user experience for brands and helps highlight leading-edge tech solutions. When she's not improving sites or creating integrated marketing campaigns, she enjoys hiking, napping with her cat, and studying outer space.

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