DERMS enables a modernized grid for a decarbonized society

DERMS supports users in grid operations, customer service, merchant operations and system planning, bridging organizational silos. DERMS enables prosumers, aggregators, and third-party service providers to participate in utility programs and power markets securely and effectively.

By Ali Ipakchi, Ph.D., Farrokh Rahimi, Ph.D., Farrokh Albuyeh, Ph.D., OATI

The power industry is undergoing significant changes that are pushing grid modernization initiatives: increasing levels of renewable generation at the bulk power level and Distributed Energy Resources (DER) at the edge of the distribution grid. Concerns regarding climate change coupled with increasingly favorable economics of renewables, advancements in data communications and ubiquitous connectivity, building automation, energy efficiency, and desire for improved resiliency are among many other drivers causing fundamental changes in the electric power industry.

Maintaining the reliability and affordability of the power supply has been the long standing objective of power system operations. Additional flexible resources and real-time energy balancing are needed to maintain grid reliability and stability in the face of the variability, intermittency and continued growth rate of wind and solar generation coupled with increasing adoption of DERs at the retail and customer level. Properly managed, demand-side resources can provide such flexibility, and harnessing those can enhance system reliability, resilience, and stability of the power supply, and also make it affordable.

FERC’s landmark Order 2222 has mandated all ISO/RTOs to allow DER Aggregations (DERAs) to participate in all ISO/RTO product markets where they are technically capable to participate, and to have DER Aggregators as a type of Market Participant. This is a far-reaching order since it crosses into the distribution and retail electric power jurisdiction. Order 2222 formalizes the integration and participation of DERs in all aspects of bulk and retail power system and market operations. The order requires RTOs to accept DER Aggregations as small as 100 kW, with no size limit on individual assets that make up the aggregation.

This landmark FERC Order is, in part, a reflection of the capabilities and the economics that can be gained through the integration of DERAs with system operations and energy markets. DERA (also known as a Virtual Power Plant) is a resource on the distribution grid that can effectively act as a generator and/or a load.

Providing visibility and situational awareness to all grid-edge resources — and dispatching or controlling of these resources to provide various grid services — have become requirements for distribution grid operation, and can provide high value to bulk system operations and energy markets.

Figure 1. Smart connected demand-side assets provide flexibility needed to mitigate the intermittency impact of renewable generation

The emerging operational requirements of the distribution grid

Traditionally, the focus on distribution grid operations has been on managing distribution wires, and the protection, control, and regulating equipment to reliably deliver power from supply substations to end-use customers. Software tools and systems have been used to monitor the status of the distribution grid facilities in order to reliably deliver power at required voltages, and in the case of an outage, restore the system safely and in a timely fashion.

Due to economic and technical considerations, the scope of coverage of a utility’s Distribution SCADA (D-SCADA) and Distribution Management System (DMS), have been limited to the primary (high and medium voltage) distribution equipment with the assumption that the facilities and equipment under control are owned by the utility. Distribution Outage Management Systems (OMS) are also widely used to support system restoration following an outage.

In many cases, utilities are faced with technology and organizational silos, and the resulting compartmentalization of data. For example, a Customer Service group may maintain customer data in their Customer Information System (CIS) that may not be accessible to operators and systems in the Grid Operations group.

With the expanding penetration of DERs not owned by the utility, there are significant functional expansion and changes in distribution operations and the role of a distribution utility. This is in part due to the impact of DERs on the distribution grid and the capabilities they can provide in support of the grid and wholesale market operations. The distribution operator will need to have visibility to DERs and parts of the grid where they are located, the ability to forecast the DER capabilities to offer various grid services, the ability to schedule and control them in real time, and they must be able to assess their impacts on the grid.

Also, customer and third-party owned resources are typically operated under a given tariff or contract, and are subject to compensation for services provided under the terms of the tariff or contract. Thus, distribution utilities need capabilities that bring together commercial aspects of DER operations along with the grid related information, operational requirements and constraints. A Distributed Energy Resource Management System (DERMS) provides such capabilities.

Figure 2. DERMS brings commercial and grid operations together for the modernized grid

Advanced distribution management systems (ADMS)

An Advanced Distribution Management System (ADMS) is a modular system integrating D-SCADA, DMS and distribution OMS, offered as a fully integrated solution or provided on an à la carte basis.

ADMS utilizes the real-time data acquisition capabilities of SCADA along with DMS and OMS applications to support real-time distribution grid operations. The key objective here is to improve system reliability indices, including System and Customer Average Interruption Duration Indices (SAIDI/CAIDI) and the System Average Interruption Frequency Index (SAIFI).

A quick use case will help illustrate the purpose and efficiency of an ADMS system:

If a pole was knocked over by a car, a DMS application like FLISR (Fault Location, Isolation and Service Restoration), with the help of real-time D-SCADA information and fault detectors located in the field, would identify and isolate the fault location. The OMS will locate the nearest truck to dispatch to the location. The ADMS then creates switching orders for the field personnel to perform restorations. The OMS function uses the last-gasp information of AMI to detect customer outages.

Figure 3. Major functionality groups of DERMS and ADMS.

ADMS technology is architected to support real-time assessment of distribution grid conditions and provide for system restorations following an outage. This architecture is highly influenced by the need for real-time processing of grid telemetry data, alarms and controls. As such, it is built around a database representing the status of the primary distribution circuits, transformers and regulators only.

Furthermore, the ADMS operating model is typically built around utility owned assets with operators having full control of the assets, and behind-the-meter resources are not represented. In general, an ADMS does not deal with commercial aspects like tariffs or contracts, third-party supplied services, measurement, verification, or settlements.

Figure 4. DERMS brings together operational and commercial data from diverse sources and provides information to key systems and processes. DERMS manages the DER and DER Aggregation life cycle from registration to supply of grid services and settlements, and provides for integration from IoT devices to markets and across utility enterprise systems.

Distributed energy resource management system (DERMS)

A properly designed and implemented DERMS addresses both grid reliability operations as well as the commercial aspects of dealing with DERs and the associated transactions with customers and other third-party DER asset owners. A DERMS provides the monitoring and control of DERs directly, or through aggregators and third-party head-ends, and manages DER metering and telemetry data. It interfaces and exchanges data and controls with other enterprise and legacy systems including DMS/ADMS, breaking the silos of data across the distribution utility organizations to serve as the system of record for all data related to DERs and their operations. It provides the capability to model the distribution grid topological connectivity and power flow and voltages, and extends the distribution grid operator’s visibility to parts of the grid not visible to the ADMS. It also provides the capabilities to forecast, schedule, and analyze DER impacts on the grid, and monitor DER operations as well as transactions with customers, aggregators, grid operators, the ISO and other stakeholders. A DERMS addresses both grid reliability operations and the commercial aspects associated with managing customers, their assets, and their contractual issues.

Some vendors with experience in demand management position DERMS myopically, as simply an extension of a Demand Response Management System (DRMS). This view lacks the power system’s expertise to model and assess the impacts and benefits that controlling demand side assets, both DR and DER, may have on operations of both the distribution grid and the bulk power system. These may include providing frequency response to mitigate the impact of reduced system inertia, managing reverse power flows, and addressing the distribution grid operating constraints, such as voltage limits, phase imbalances and their impact on distribution grid losses, or fluctuations resulting from the intermittency of DER operations, among others. These capabilities are covered by a full function DERMS.

In a nutshell, DERMS helps turn DERs from being a grid reliability challenge into solutions that provide cost-effective grid services, which in turn improve grid reliability, stability, and resilience, while also improving supply economics.

A well-designed DERMS allows the utility to minimize renewable energy curtailment and instead leverage DERs to provide grid services, including capacity, various forms of reserves, frequency response, and voltage support, to mention a few. More generally, DERMS helps optimize the use of DERs so they are best utilized across multiple systems by considering technical, operational and economic factors, while also meeting local customer, tariffs, contracts and Power Purchase Agreement (PPA) requirements. A well designed DERMS, such as ours, provides among others:

  • Versatility: handling a wide range of DER assets and DER Aggregates with homogeneous or heterogeneous DER types.
  • Enhanced Visibility: leveraging field interfaces and sources of data.
  • Scalability and Adaptability: supporting large volumes of data representing customers, DERs, and their operations. Provide scaling to support a growing organization’s needs.
  • Performance: provide required performance for monitoring, dispatch and control and management of large numbers of DERs.
  • Field and Enterprise Integration: supporting industry interoperability standards integrating with DERs, third-party head-ends and enterprise systems— AMI, OMS, DMS, MDMS, CIS, EMS, GIS, and other systems.
  • Cyber Security: Stringent adherence to industry and federal cyber security standards.

Based on our field experience, when properly managed by a DERMS, DER assets can yield annual revenue streams in the range of $50 to $500 per kW DER capacity across the different products and services they offer. This does not include the additional “resiliency” benefits to the grid and consumers. To assess and monetize the value of resilience, subjective metrics are typically used, which could far exceed the quantifiable benefits quoted above.

Lessons learned and path forward

The great change of distribution grid operations we are observing today is reminiscent of a similar paradigm shift that we witnessed in North America more than twenty-five years ago.

In 1996, FERC Orders 888 and 889 mandated “Transmission Open Access” to enhance competition in the generation and supply of electric power. This accelerated the de-regulation of the electric power industry and ushered in the breaking up and separating of bulk generation from transmission, opening transmission to all sources of generators, and necessitating the creation of Independent System Operators (ISO) to administer and manage energy and ancillary services markets. At that time, system vendors and newly forming ISOs quickly realized that a simple application of power system applications, originally developed as a part of utility control centers and Energy Management Systems, could only address a small fraction of the requirements for managing the open transmission grid and administering market transactions with multitudes of new generation resources and a variety of stakeholders. New technologies and methods were developed at great expense to support the infrastructure required to interface with market participants, manage transactions, and also manage the grid.

OATI is familiar with this transition as it owes its success to pioneering cost effective solutions during this Transmission Open Access era that addressed the operational issues that bulk power system operators were facing from those FERC Orders.

In the new FERC Order 2222 arena, conventional power system applications and solutions dealing primarily with reliability and operations of the grid have limitations in terms of the performance and scalability needed to not only address numbers of data points, but also control orders of magnitude larger than what they were designed for. More important, they lack the functionalities required to address the commercial and transactive side of problems, such as enrolling retail customers, validating and registering their assets, forecasting asset capabilities, baselining of every single metering point, modeling local operational requirements and power purchase agreements (PPAs), and monitoring and controlling ubiquitous DERs using inexpensive sensors that utilize newly formed communications and message payload protocols and standards, among others.

OATI is sponsor of the DERMS track at DISTRIBUTECH International, set for Dallas, Texas, January 26-28, 2022. Learn more here.

About the Authors

Dr. Ali Ipakchi brings close to five decades of experience in information technology applications to power systems, energy markets, and electric utility operations. As the Executive Vice President Smart Grid and Green Power at Open Access Technology International, Inc. (OATI), he is responsible for product development, as well as business growth in Distribution Grid Modernization and Smart Grid areas. Prior to OATI, Dr. Ipakchi was Vice President of Integration Services at KEMA Consulting, assisting utility clients with roadmaps, specifications, and implementation strategies for operational and automation systems, particularly in the Smart Grid area. Prior to KEMA, he held various management positions at ABB and Alstom Grid, supporting power application development, and system solutions delivery to the power industry and the ISO markets. Dr. Ipakchi has led several new business-lines and corporate development initiatives in response to changing power industry requirements while managing product development and solutions delivery teams. Dr. Ipakchi is co-holder of several U.S. patents on power systems, and instrument diagnostics. He frequently is an invited speaker at various industry and Smart Grid events.

Dr. Farrokh Albuyeh (right) has over 35 years of experience in the electric power industry, developing and implementing power system applications and systems, as well as managing and delivering projects. Dr. Albuyeh is an Executive Vice President Smart Grid Projects at Open Access Technology International, Inc. (OATI). In this role, he is involved in the development and delivery of solutions and services for wholesale energy markets, applications for scheduling and management of Demand Response (DR) and Distributed Energy Resources (DERs), as well as the development and delivery solutions in support of distribution grid renovation. Dr. Albuyeh has specific experience with technical analytical studies, application software development, providing consulting services, managing, and delivery of large-scale projects.

Dr. Farrokh Rahimi (left) has 50 years of experience in the electric power industry. In his current role as Executive Vice President, Market Design and Consulting at Open Access Technology International, Inc. (OATI), Dr. Rahimi oversees development of market design and consulting activities. He is also a key contributor to OATI Smart Grid and Grid Modernization activities as well as the Microgrid development activities of USA Microgrids, an OATI company. Dr. Rahimi is an expert in restructured energy market design and related systems, including operations, commercial and business systems, and market monitoring applications.

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