DERMS Adoption in the New Energy Landscape

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In this edition of Industry Perspectives, Schneider Electric’s Jérome de Parscau explores distributed energy resource system (DERMS) adoption and how this is changing today’s energy landscape. 

With the energy landscape in the midst of a major upheaval, both consumers and distribution utilities are experiencing significant advancements in technology that is changing how electricity is delivered and consumed. Across the globe, adoption of grid-connected and behind-the-meter DER, including large and small-scale photovoltaics (PV), are creating voltage and frequency instability issues and are challenging established operating assumptions. New solutions are required to control voltage and frequency and maintain a high level of quality for delivered and consumed power. Areas which are experiencing higher penetration of PV capacity (20-30 percent of load) are being driven towards investments in flexible energy management to enable more advanced grid operations and coordinated dispatch of new energy resources.

Distributed energy resource management systems (DERMS) offer a solution that interfaces utility operating systems and grid edge DER. DERMS can support utilities looking to improve customer service, crew and public safety, and grid operations and planning; all with a focus towards an efficient and sustainable future. DERMS solutions provide greater situational awareness throughout the energy value chain and automate the optimization of grid connected DER. As an example, an advanced DERMS can enable active and reactive power support by dispatching traditional grid assets, such as voltage regulators and capacitor banks, in concert with new grid edge resources from smart inverters and battery energy storage systems to microgrids.

DERMS solutions are evolving to cover three wide-ranging sets of requirements: grid monitoring, analysis and control; optimization of DER assets for grid constraints as well as market and customer economic constraints; and customer integration encompassing onsite DER management and customer engagement. Since DERs can serve as flexible loads as well as distributed supply sources, local facility power management systems are entering the scope of DERMS requirements.

Barriers to adoption

DERMS deployments remain in their infancy, and there are significant regional differences in terms of definition and applications, due to local market designs and regulatory frameworks. Regardless, with a dynamic and varied market, many technology providers are specializing in subsets of DERMS functionality as utilities learn best practices and identify stepwise deployment options. Those that offer embedded and standalone solutions will likely see more rapid market adoption. For example, DERMS embedded or tightly integrated with distribution management systems (DMS) and demand response management systems (DRMS).

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Due to the fluidity of the industry in this early market stage, DERMS vendors can benefit the industry by offering end-customer hardware and software management tools that integrate with the grid and DERMS to enable management of all DER types, including traditional generation, alternative energy and energy storage. And as more regulators in regions experiencing high adoption of distributed renewable energy support and incentivize deployment of DER management technologies, DERMS adoption will accelerate.


The new energy landscape is ushering in greater levels of complexity. Interoperability and compliance certifications will become increasingly important as the number of DERMS deployments continue to grow. Industry standards for interoperability have proven to be vital to lowering the total cost of ownership for technology adoption. Utilities will soon demand a comprehensive and sustainable approach for managing all available DER in their service territory, integrating with other enterprise grid management systems and third-party aggregators. In addition, standards for how DER connect to the grid and support advanced grid operations will continue to evolve. This includes complex DER sites such as microgrids with local control solutions as well as small residential deployments.

Utilities are demonstrating an increased desire to monitor, manage and optimize DER, but each utility varies in its digital maturity.


Utilities are demonstrating an increased desire to monitor, manage and optimize DER, but each utility varies in its digital maturity. Many still use traditional SCADA systems for grid management while others have adopted DMS and outage management systems (OMS). When DERMS is fully integrated with DMS, OMS, and geographic information systems (GIS) solutions, utilities gain maximum network operational efficiencies and security from unified situational awareness and IT/OT data management. For localized grid issues, such as voltage constraints, DERMS help to maximum the value of DER and minimize the risks associated with higher penetrations. And with interoperability and compliance certifications becoming the norm and regulations evolving in the coming years, utilities will be able to more easily and accurately monitor grid performance and dispatch DER to benefit the grid, end-customers, and the evolving energy market.

Jérome de Parscau is ‎SVP, energy digital solutions & strategy at Schneider Electric.

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