A new law moving through California’s legislative bodies will require all new homes to include solar panels as of 2020. When the law takes effect, the impact will stretch across the Golden State as mass-market opportunities open up for solar panel and battery storage companies.
This shift in demand for renewable power isn’t limited to California. Demand for solar panels, wind turbines, and other renewable generation sources has skyrocketed in the past decade, and there is a growing need for comprehensive methods to efficiently manage the energy generated.
The early years of solar panels saw users powering just their own homes or offices, or perhaps municipal governments using specific solar panels to fuel individual street lights. All the energy created on one specific panel was sucked up by the appliance plugged into it, or the energy was simply wasted.
Those days are gone. Enter, the Age of the Energy Internet.
Now that renewable energy sources are in such demand, coupled with the worldwide need to reduce carbon emissions to stem the impact from greenhouse-gas-induced climate change, solar panels and other energy sources are no longer used as siloed tools. Often, they’re incorporated into medium- to large-scale power grids, as well as connected to auxiliary tools like battery storage, smart meters, and other renewable energy generators.
How is one supposed to manage such sprawling, complicated systems? The answer is to choose an energy storage management software system that best suits your business needs.
A distributed energy storage management system (DERMS) is a system that monitors, optimizes, and dispatches distributed energy resources to manage energy storage and electrical consumption over the landscape of one or more grids. This is accomplished via specialized software programs, which can vary based on the specific needs of the energy management organization or business.
As renewables are increasingly adopted across the US and the world, software methods to manage these assets will follow. Renewables made up about two-thirds of the new power capacity deployed around the world in 2016, with about 165 gigawatts coming online. 2017 was another banner year for renewable asset deployment, according to the International Energy Agency, a 30-state intergovernmental agency that serves as a policy adviser on energy issues to its member nations.
“ was another record year, largely as a result of booming solar PV deployment in China and around the world, driven by sharp cost reductions and policy support,” the agency stated in a 2017 report.
Distributed energy resource management systems also saw a rapid rise in growth over the past few years. The distributed energy resource management system market is expected to jump to a worth of $603.6 million, with a compound annual growth rate from 2011 to 2017 of 15.7%, according to a 2017 report on the renewables market by research firm MarketsandMarkets.
“The increasing share of renewable power generation in the energy generation mix, reduced costs of wind power, photovoltaic system, battery storage, and shift from centralized to decentralized power generation are the major drivers of the distributed energy resource management system market,” the report noted.
What’s more fascinating is this acceleration has only just begun, experts suggest.
“As we stand several years into an electric power industry transformation,” a 2018 Deloitte power and utilities outlook report reads, “the grid is ‘smarter,’ electricity sources are cleaner, and customers have more choices than ever before. But the change is likely just getting started.”
Industry trends may shift, but the energy powering the distributed energy resource management system forward is expected to surge through the rest of the decade and into the 2020s.
“We expect digitalization to increasingly enter the spotlight, as electric power companies map out new ways to deploy rapidly advancing technologies to address challenges and harness opportunities,” says Scott Smith, vice chairman in Deloitte’s US Power & Utilities department in the company’s 2018 industry report.
Picking Software: Why is This Tool Important?
Before we dive into the specifics of these types of software, let’s talk a bit about the importance of DERMS to your operation in general. Perhaps you’re a microgrid operator. Maybe your energy company hasn’t begun using renewable energy resources on a mass scale yet. Or perhaps you come from an analog world and smart inverters are as “techy” as you want to get. Why in the world, you ask, would you pay for an integrated computerized network that automates the process you already do successfully manually?
Because experts say you won’t be able to keep up otherwise. Sure, DERMS are an early and growing industry, but they’re growing in parallel with distributed energy resources.
Think of DERMS like the operating systems on early Apple I computers. Apple co-founders Steve Wozniak and Steve Jobs didn’t initially need an operating system when they were making some of the world’s first personal computers in the 1980s. They could go into the newly built computer terminal and tell the computer what to do in its base language.
But that method isn’t sustainable because you can’t pass along your work to another person, and the system keeps individual computers in isolated silos. Similarly, solar panels and battery storage work best when they’re connected with the other tools that complement them via one comprehensive program. The future of distributed energy is interconnectivity, both across networks and across physical borders. Having a comprehensive software system in place now will set you up for success as these norms permeate the industry.
Choosing the right software to manage your distributed energy storage system is especially important to make sure your battery storage resources are being used in the most efficient way possible.
Regardless of the chemistry used to store renewable energy, every storage center and storage operator wants to avoid unnecessary energy loss. By using the proper software systems to offload excess energy to areas that need—and thus, will pay for—the electricity, you ensure your resources result in a sale and that you don’t wear out your battery resources’ lifespan too soon by storing and dumping unused energy.
Battery technology optimization is one benefit to distributed energy storage systems, but the fiscal, environmental, and operational benefits don’t stop there. In reality, having the proper distributed energy storage software will be mission-critical to any distributed energy company in the near future—but choosing the right ones for your company’s needs can give your team the tools it needs to be successful right out of the gate.
Being able to optimize your storage systems will reduce costs and save money and energy, stated a report from Bosch’s energy storage solutions arm. In addition, there can be benefits in terms of safety, better battery life, longer system lifetime, a shorter payback time, real-time alerts to issues in-field, remote control, data backup, and faster diagnostics.
Bosch states that its system takes traditional energy resources and adds “the smart intelligence of a green ecosystem and our energy solution. [Its system] ensures that the demand and supply of electricity is matched at all times. With embedded smart algorithms, it is able to operate a battery and other energy assets to optimally maximize your benefits.”
What Software is Involved in Distributed Energy Resource Management
To start, any toolkit must begin with an operating system. This is the foundation that any computer system starts with, and it’s what creates the environment for every other piece of software that touches your computer or computerized tools.
For DERs, the industry hasn’t embraced a specific operating system for its management needs yet. Much like other industries that focus on the industrial realm, the distributed energy industry will need new types of operating systems as the foundation of its software needs.
However, it’s worth explaining some early efforts to create a DERMS operating system. In 2014, energy resources company Spirae launched an operating system for DERMS called Wave, with the intention of managing load, distributed generation, and integrating smart devices into the system. In 2015, distributed energy company Enbala Power Networks received $3 million from venture capital firm Obvious Ventures to pursue a DERMS solution. In 2016, they released Symphony, a DER optimization and control platform.
From there, application software for battery technology, microgrids, and specific intra-industry needs should be available either through a DERMS or on its own.
Each IoT device you use, including smart meters, smart inverters, and even smart EV chargers, will have its own software installed, and that software will have to integrate with your larger network to get the most use out of a connected environment.
The endpoints for this software are the energy generators themselves, such as solar panels, and the assets that actually receive the electricity, such as EVs, homes, businesses, and external grids.
Picking the Right Management Software
While the field is still evolving, you can consider a few important questions while researching DERMS. Some of these questions might include:
What are the hardware requirements? Do I possess that particular hardware?
You’ll want to choose software that works with your existing hardware, not the other way around. But investing a small amount of money in hardware to adapt to a new software system isn’t always a bad idea, especially if it increases your network’s cybersecurity.
Will this meet my short- and long-term needs?
Your needs today and your needs tomorrow won’t be the same, but chances are your software will still be the same. Evaluate your yearly goals and benchmarks to see which software systems make the most sense for your team.
How might this technology age? Are maintenance and regular software updates included in the software package?
Having support when you need it, where you need it is critical for any company. The last thing you want to do is have your team scrambling to try to figure out a connection problem to an unfamiliar element of your software—all with angry customers ringing your phone nonstop.
What are the cybersecurity elements that are included in this software?
Cybersecurity is as important as physical security. Cyber attacks against infrastructure and energy-based targets are no small threat, and cybersecurity should be of the utmost importance.
In some cases, it makes the most sense to keep your critical operational aspects in a closed intranet system. This may seem counterintuitive, given the hyper-connected nature of a DERMS, but you can still leverage IoT and smart grid technologies without offering an open door to hackers.
How do I know I can trust this service?
The software you choose will act as the lifeblood of your core business. Be sure you trust the company providing it with your business’s success. A bad software choice can be costly and time-intensive to replace.
Will the company providing this software still be in business in five years?
Given that this industry is so new, you’ll want to make sure any software you use is from a company that will be around for the long haul. You’ll need IT support and you’ll want to know that they aren’t selling lemons, so check on the runway of any startups and research the valuation, stock price, or other market indicators of the company from which you’re purchasing your software.
High-Tech Solutions and Where They Fit In
IoT, machine learning, and artificial intelligence elements are also being integrated into software applications for the distributed energy industry, and those tools will become more common as the industry evolves.
IoT resources—sometimes called “grid of things” in the distributed energy space—can give real-time data to analyze how your assets are performing and how the grid is operating.
A DERMS solution can coordinate these smart devices and communicate their data to a centralized area where all data can be analyzed and evaluated at once. This can help managers coordinate PV systems and DERs in order to optimize their uses during peak hours and other time periods where modifications need to be made across the environment as a whole.
Morgan Metcalf, a product manager in PG&E’s Grid of Things department, presented an overview of the “grid of things” to an audience at the 2018 EPIC Symposium which took place in Sacramento, CA. The symposium focused on PG&E’s Electric Program Innovation Charge (EPIC) consumer-funded program.
Metcalf spoke about how the “grid of things” is helping PG&E deploy more storage resources in residential and commercial venues to offset peak hour demand and increase the utility’s renewable portfolio.
In July 2017, PG&E announced that 150 residential customers and 20 commercial customers in San Jose would receive solar smart inverters and/or behind-the-meter battery storage systems to support the utility’s DERMS operations as a pilot project. Metcalf says that project helped show the possibilities of an interconnected grid managed with a comprehensive software solution.
“This demonstration has helped us determine how aggregated energy storage resources can be reliably and cost-effectively used to reduce peak loading or absorb distributed generation, and as a non-wires approach to address capacity constraints instead of other technologies that we would use for the same purpose, such as replacing transformers or reconductoring,” says Metcalf.
San Jose in particular has been attempting to integrate smart city technologies, and a smart grid system fits into that portfolio.
“Demonstrating new and innovative technologies is a key component of our Smart City Vision to enhance city services and the quality of life in San Jose. As the capital of Silicon Valley, San Jose is an ideal test bed for this kind of energy management technology that has the potential to help promote a smarter energy grid and improve energy conservation,” says San Jose Mayor Sam Liccardo in a 2016 announcement.
Software as an (Emergency) Service
While limiting energy loss and efficiently managing peak load to maximize revenue is a sought-after benefit, another significant benefit is an increase in the reliability of your system.
Having a DERMS not only can help optimize your day-to-day operations, but it can also help with emergency preparation and response.
Disasters like the months-long blackouts in Puerto Rico after Hurricane Maria and in areas of Texas after Hurricane Harvey reminded the energy industry just how fragile a grid can become faced with the power of mother nature.
Renewable deployment increases the likelihood of a fast rebound after a storm or earthquake, or another natural disaster. But renewables are tricky because the amount of energy generated is highly variable, and it changes hour by hour—literally with the wind and sun.
Analog-focused power grids don’t particularly like variability, and injection of fluctuating amounts of power isn’t ideal. With a smart grid that collects and analyzes injection data, operators can understand how much new energy is being loaded onto the grid and consumed by customers at any given time.
This helps during a disaster because operators can see which of their renewable assets are still functional, plus the power output of each of them. The analytical nature of any DERMS tool also means that the grid won’t accidentally get overloaded with too much renewable power because all injections will be monitored and recorded.
“Smart grids evolved first with the deployment in the field of automated switches and reclosers, the tools that utilities use to reroute power flows,” explains Gary L. Ockwell, Chief Technology Officer of Advanced Control Systems. “Next, many of those same utilities took the further step of adding software in the form of Distribution Management Systems (DMS) and advanced algorithm-based applications which allow utility grid operators to assess in real-time what is going on in the network and to take action (remotely operate equipment in the field) to maintain the best and most reliable operation.”
As California moves ahead with its plan to require solar on all new housing developments, the state could become a testing ground for DERMS as solar arrays move further and further from a siloed existence to a true “grid of things” environment.
Before long, DERMS could be the next iOS for the distributed energy industry. Ideally, the introduction of this management software will end up saving everyone time and money.
“This is a very bold and visionary step that we’re taking,” says David Hochschild, a California Energy Commission member.