From demand management to distributed energy management


Historically, vertically integrated utilities focused on creating sufficient electricity supply and delivery to meet market demand.

Demand management has been viewed primarily as a solution for shifting energy consumption in ways that are beneficial to the electrical grid. Typically, this means using less electricity during hot summer afternoons when the grid is congested or during winter mornings when there isn’t solar production.

Today, the growing need for utilities to meet energy efficiency regulations, enable broader customer choice in energy management and better optimise the use of distributed energy resources (DER) is driving a significant evolution of demand management toward distributed energy management. The goal of DEM is to help utilities use a broader toolset to address these trends and facilitate better grid performance and reliability, reduce peak demand, drive customer engagement and save energy.

With the rapid integration of renewables and distributed technologies onto the grid, utilities can no longer feasibly address the challenges of maintaining power quality, balancing supply and demand in real time and ensuring adequate distribution infrastructure capacity with their legacy systems and traditional business processes alone. High data volumes and the need for action on sub-second time scales necessitate a platform built on distributed intelligence. Placing devices with onboard computing power at the grid edge and enabling them to communicate quickly and reliably to neighboring devices, such as behind-the-meter loads and DERs, enables a host of new outcomes that weren’t possible with traditional demand response technologies and programmes.

Demand response has evolved from a resource primarily used for emergency purposes to an essential resource for the distribution grid. Access to detailed, near real-time data has driven significant improvements in demand management, shifting from a manual approach to a streamlined and more precise process. And with distributed intelligence, distributed energy management is enabling new outcomes for utilities from operational improvements to increased forecasting accuracy to increased customer convenience.

Utilities have recently deployed demand management programs as operational resources to solve problems traditionally handled by supply-side resources or investments in transmission and distribution infrastructure. These ‘non-wires’ solutions can only be successful with an approach that leverages data to drive improved performance. Historically, utilities relied on a manual approach to demand response, using excel spreadsheets to determine how much load would be available. Obviously, this method made it difficult for the utility to perform in an emergency, adjust to rapid weather changes or effectively sort through the expansive amount of information. Think about what happens to renewable generation when the sun slips behind some clouds or the wind stops blowing.

Leveraging more timely and detailed data, utilities can rely on the power of detailed, customer-specific models and improve resource management. These capabilities transform raw data into relevant information and analytics that provide a precise and trusted asset in the control room.

These non-wires solutions are becoming dispatchable assets.

The effectiveness of leveraging data to improve demand response is delivering material improvements in program precision and effectiveness. For example, an electric utility in Florida installed two-way communication load control devices instead of traditional one-way communication devices. The utility can now use device data and weather data to more accurately forecast load reduction. With these improved forecasting and dispatching capabilities, utilities can leverage demand response as a strategic asset not only to improve grid reliability, but also to integrate intermittent renewable resources of energy and defer large capital expenditures such as transmission and distribution infrastructure. This enables cities to better serve their citizens by not building unsightly new infrastructure while introducing more clean sources of energy without sacrificing reliability.

Taking advantage of distributed intelligence and the real-time edge computing power, utilities can derive even more operational benefit from their demand response and distributed energy resources through more reliable network communications and realtime measurement and verification of load drop. In addition, these distributed computing capabilities will give utilities greater access to timely data and analytic power, allowing automated DER dispatch decisions as opposed to relying on grid operators to manually make decisions. This will also help utilities with their grid planning decisions by combining forecasting capabilities with data from end-use devices, making the forecasting process even more accurate.

Distributed energy management will also bring new data and real-time situational awareness that promises to greatly enhance consumer engagement. It will allow price signals to be sent to consumers in real time and enable demand charge management with real-time alerts and automated load control. Imagine a solution that could learn a consumer’s preferences and willingness to tolerate higher temperatures in their home by presenting cost versus comfort tradeoff settings and observing interactions with the thermostat during load control events.

Bringing demand management to the grid edge also includes producing an application running on a meter that could tell a load control switch to delay a water heater while an electric vehicle is rapidly charging; or an application running on a transformer that could tell a group of thermostats and other DERs to reduce usage when that transformer’s rated capacity is approached. Ultimately, these innovations will enable demand management to be used more frequently and effectively by utilities through an even more reliable network for communicating with thermostats and load control switches.

These are just a few potential examples of the power of distributed energy management. There is the opportunity to innovate and impact the industry – and that’s certainly an exciting place to be. MI

About the author

Steve Hambric is Itron’s vice president of distributed energy management (DEM). In this role, he is responsible for the sales, product and marketing teams for the DEM division. Prior to Itron, Steve worked at Comverge where he ran corporate strategy, regulatory, sales operations and technical sales. He’s often found collaborating with utility partners on demand side programmes and other concepts that take advantage of new innovations.