Electricity is a multidimensional product that requires constant fine-tuning. Otherwise, the lights go out, resulting in substantial lost economic activity. The challenge of accomplishing this task has become increasingly difficult as the fleet of distributed energy resources (DER) begins to take over electricity resource pools. Beginning in 2018, annual centralized power resources began to give way to distributed generation and a more diverse DER mix. I noted last year that this transition was likely.
The Growing Energy Cloud
This trend will only accelerate over the next decade and beyond, as the world inches closer to the vision articulated as the Energy Cloud. The key to value creation in the electric utility industry and other markets such as transportation and real estate starts with moving from siloed solutions to broader orchestrations of resources enabled by new, intelligent, and self-correcting platforms. The implications for consumers and utilities (and other grid operators) are game changing. As large centralized fossil and nuclear plants come offline, the job of keeping the grid in balance becomes ever more paramount. The older on-offsources are being replaced by fleets of diverse and variable DER and new technologies including advanced software, artificial intelligence, and device sensors..
Enbala’s VPP Approach
Among the innovators in this space is Enbala, which last year partnered with ABB on a one-of-a-kind venture: integration of cutting edge technology now commonly referred to as virtual power plants (VPP) with distributed energy resource management systems (DERMS). A new white paper and webinar will distinguish between the two, and explain why both concepts are really just two sides of the same coin.
VPPs and DERMS both aggregate and optimize DER to provide value upstream to the utility grid. While it may sound utopian, prosumers that have installed solar PV, batteries, or other forms of DER benefit by lowering their own energy costs and ideally boosting site resiliency. Yet if aggregated with other prosumers, the group as a pool can also benefit the utilities and the wider grid to solve potential reliability issues—frequency and voltage—that have traditionally been solved by centralized fossil generators.
The VPP is more focused on economic optimization, enabling new forms of transactive energy such as the much-hyped blockchain technology. VPPs also keep the grid in balance by addressing frequency issues since this can be addressed over a wider geography. In contrast, DERMS approaches these issues from the perspective of a utility or transmission system operator. Therefore, it is more focused on active power management for voltage, which must be addressed surgically at specific spots on the grid. By offering a technology—the Enbala Engine—that flips back and forth between these two applications, it appears we have a tool that can accelerate deployments of both VPPs and DERMS much faster than would be the case with separate solutions.
Alectra’s Approach Includes Updating Microgrid Capabilities
A survey conducted this past January showed that approximately half of utility respondents were moving forward with a DERMS pilot program. Among these utilities is Alectra of Ontario, North America’s second largest municipal utility.
What is the key value proposition being validated by Alectra? In a nutshell, the power embedded in a DER fleet is much more valuable than the individual components—but only if marshaled efficiently by state-of-the-art software solutions. Alectra is upgrading the capabilities of a microgrid, allowing offsite electric vehicles to provide grid services, and demonstrating the value of automated demand response via VPP-DERMS. To learn about the specifics, tune in to the Building the Business Case for Integration webinar on September 17.