• Time of Use Rates
  • Decarbonization
  • DER
  • Software
  • Energy Management

Energy Management Solutions Are Essential in the Energy Transition

Dan Power
Jun 13, 2022

Guidehouse Insights solar panel

The deployment of clean energy hardware systems needs to drastically increase to fully decarbonize. Natural gas and coal fired power plants need to give way to large-scale wind and solar farms, utility-scale energy storage, rooftop solar PV systems, behind-the-meter (BTM) batteries, and other distributed energy resources (DER). Clean energy hardware system efficiencies will likely improve with time, and there are bound to be more breakthroughs in the world of energy storage in the coming years, enabling the utilization of more renewable energy. However, sophisticated software platforms such as DER management systems (DERMSs) and virtual power plants (VPPs) are also required to seamlessly integrate, orchestrate, manage, and control the complicated network of DER assets. These software platforms can maximize the current technological capability of renewable energy assets and overcome some of their shortfalls. 

With jurisdictions around the globe beginning to institute aggressive emissions reductions mandates and clean energy deployment goals, increasing the number of operational wind turbines, solar panels, and energy storage systems is critical. However, because of the variable nature of renewable resources, simply increasing the amount of renewable energy capacity on the grid is not sufficient to meet these objectives. Without advanced software systems in place to control and optimize these generation sources, renewable curtailment could increase while reliance on fossil fuels remains. This situation could lead to additional renewable generation plants being oversized to meet climate goals or following the trend of fossil fuel peaker plants where they are only operational a fraction of the time. In both instances, ratepayers are stuck paying higher rates to subsidize the renewable generation power plants’ development and operation.

Energy Management Systems Offer Operators Multiple Benefits

As DER BTM capacity grows and more end uses switch from fossil fuels to electricity, grid operators need advanced software solutions to help maintain grid balance. DERMSs and VPPs can give operators greater control over how and when demand for certain flexible end uses such as space conditioning, water heating, and EV charging is met through load flexibility. Load flexibility can help flatten the mountains in the net load curve, often referred to as the duck curve in high solar adoption areas. Steep demand ramps are the result of decreased renewable generation and increasing demand in periods such as the evening when the sun is setting but many people are returning home. Energy IT software solutions enable flexible end use demand to be shifted from the consumers’ time of use to earlier in the day when more solar energy is available, effectively flattening the typical duck curve without affecting end users’ comfort.  

Throughout the energy transition, utilities and grid operators need to upgrade their grids to accommodate the growth in electricity demand from electrification, the increase in renewable energy capacity, and the increased presence of DER. Traditional grid infrastructure upgrades can be expensive, time consuming, and disruptive to the surrounding communities. Non-wires alternatives make use of unconventional transmission and distribution technology, such as advanced energy management systems, to defer or avoid the need for traditional infrastructure upgrades by providing load relief at the local level. Energy management systems allow operators to use both supply- and demand-side resources connected to their network to their advantage. As utilities, grid operators, and energy providers prepare for a greener energy future, they should not ignore the role software platforms can play in achieving their goals.