| Work Detail |
Big, centralized power plants like a 500-MW combined cycle natural gas plant are large enough that they can afford to have human intervention. To manage these large power plants, asset owners hire a trading desk which continuously relies on human intervention for market participation. Distributed energy resources (DERs) like solar, on the other hand, can not afford this type of human intervention — not just because it isn’t financially viable, but also because they are growing exponentially complex with multi-faced inputs requiring real-time decision making. Automation is increasingly critical to optimize DER usage and extract their full value stream. That’s why, for the energy transition to fully develop, DERs, like battery storage, CHPs, heat pumps and EV chargers, need to be treated like mini power plants.
Traditionally, DERs have been treated as event-based solutions and not like power plants. They are seen as the grid-edge instead of grid-forming technology. In other words, they have been managed by a Curtailment Service Provider (CSP) that tells a site, “Hey, we have an event tomorrow from 4 p.m. until 6 p.m., make sure you dispatch your battery or backup generator.”
DERs are not managed continuously as part of the grid, but rather dispatched at most around 100 hours a year. The other 8,600+ hours per year, the assets unnecessarily sits idle.
To truly unlock the energy transition, DERs need to be managed continuously. They need to be constantly asking, “Can I make money right now? Can I save money right now? Is now the cheapest time to charge? How can I be managed to provide the best carbon reduction?” Even if the answer is to not dispatch, it is critical to always be searching for opportunities.
However, the ability to constantly be asking the grid how smaller DER assets can be best leveraged requires that a number of separate technologies work together in a coordinated and holistic matter. Most DER management solutions are designed as siloed offerings of either asset monitoring and controls, data analytics and asset optimization or ISO/RTO market facing services. These siloed offerings don’t always communicate with each other, making it increasingly challenging to access the full value stream. But when all of these solutions are strategically combined in a holistic, end-to-end predictive analytics and optimization platform, they enable improved value extraction for both the DER owner and the grid. In order to achieve this, an end-to-end platform needs to be able to:
Complete the “last mile” handshake with the RTO/ISO and utility. If the service provider cannot automate the process, be the market participant and communicate directly with the ISO and/or utility, it cannot be managed continuously.
Be predictive about what is going to happen and when. When deciding which value stream to optimize, technology must be leveraged to be predictive, including any behind-the-meter (BTM) load constraints.
Control the asset. It’s not enough to just tell a site to do something via text or email. The technology needs to reach in and control the asset, sometimes at a 2-to-4-second interval.
Manage for economic and environmental benefits. Increasingly, there are hard costs on carbon and incentives to utilize DERs to drive down carbon emissions, for instance in New York City with Local Law 97. The ability to automatically layer carbon into the decision-making process is critical.
It would be an enormous missed opportunity for the energy transition to not squeeze as much value out of DER assets as possible. To have gigawatts of deployed DERs and only use them less than 5% of the time is a waste. In order to unleash the true power of distributed assets, we need to leverage end-to-end energy management platforms that can treat these assets like mini power plants so they can be continuous market participants. |
