Between now and 2021, utilities will spend approximately $380 million on distributed energy resource management systems (DERMS), according to a recent report from GTM Research.
The investment has only “just begun,” according to study author and GTM Research grid analyst Andrew Mulherkar. GTM Research defines DERMS as “an operational technology system that monitors, forecasts, optimizes and ultimately dispatches distributed energy resources (DERs) under management directly by the utility or indirectly through an aggregator.”
While most of the first few DERMS investments are limited in scope and complexity, soon they will need to take an integrated approach to how they manage resources at the grid edge.
Many utilities already have existing demand response programs that include technology-specific grid-edge DER programs, such as for battery energy storage, smart thermostats or hot water heaters.
But utilities will eventually need a DERMS that can manage hundreds of thousands of devices from dozens of manufacturers to provide grid services. Essentially, utilities must invest in a software system that can take the complexity and increasing diversity of devices at the grid edge and turn that into a dependable grid resource.
“A DERMS should take a huge number of small, diverse assets and intelligently aggregate these assets to deliver grid services,” Seth Frader-Thompson, president and co-founder of EnergyHub, said of next-generation DER integration. “Creating synthetic grid services that are made up of lots of heterogeneous assets…stitched together delivers a robust, reliable grid resource.”