Virtual power plants (VPPs) engage in active power control across a network of assets to deliver grid services that aren't heavily reliant on the exact location of individual assets, such as feeders or circuits. Typically, they offer system-wide advantages tied to the scaling up or down of generation or load, with a focus on broader regions including ISO and RTO areas.

Differing from VPPs, a Distributed Energy Resources Management System (DERMS) offers grid services that are closely tied to the specific location (grid connection) of each asset. DERMS-controlled grid services are delivered by manipulating power flows along individual feeders and include voltage management, optimal power flow, and locational capacity relief. DERMS possesses the capability to manage both real power (watts) and reactive power (VARs), enabling it to augment load on one section of a feeder while reducing load—and boosting generation—elsewhere on the same feeder. Unlike VPPs, a DERMS usually necessitates more extensive back-end system integrations owing to the need for precise locational grid and asset state information. Integration with the utility is crucial for DERMS applications, often achieved through a Distribution Management System (DMS), Advanced Distribution Management System (ADMS), Outage Management System (OMS),or SCADA system. For a utility focusing on location-specific and distribution-centric applications, aimed at orchestrating actions at a distribution feeder level to regulate grid conditions and enhance prevention of system excursions, blackouts, and power outages, DERMS is essential.

It's crucial to recognize that adopting a logical, phased approach, starting with a Virtual Power Plant (VPP) and gradually transitioning to a Distributed Energy Resources Management System (DERMS) over time, is entirely feasible. This approach provides a clear path for utilities to become more adept at real-time control and optimization of Distributed Energy Resources (DERs) while addressing the growing need for distribution-level grid balancing support. The foundation for a reliable and sustainable energy future relies on the development of more distributed and intelligent power networks. VPPs and DERMS serve as essential tools in achieving this goal, empowering both energy producers and consumers to leverage the potential of distributed energy.

In conclusion, while Virtual Power Plants (VPPs) and Distributed Energy Resource Management Systems (DERMS) share the common objective of managing, coordinating, and integrating Distributed Energy Resources (DERs) within grid operations and market systems to deliver grid services, their roles diverge in distinct ways. Understanding these differences is essential for effectively leveraging these technologies in the evolving landscape of distributed energy management. Both VPPs and DERMS contribute to the advancement of resilient and sustainable energy systems, with their unique functionalities catering to specific needs and challenges within the energy sector. As the demand for distributed energy management solutions continues to grow, the synergy between VPPs and DERMS presents promising opportunities for optimizing grid performance and facilitating the transition towards a cleaner and more decentralized energy future.

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This thought leadership article was originally shared with Energy Central's Grid Professionals Community Group. The communities are a place where professionals in the power industry can share, learn and connect in a collaborative environment. Join the Grid Professionals Community today and learn from others who work in the industry.

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