DERMS (Distributed Energy Resource Management System) and VPP (Virtual Power Plant) are both key technologies in the management of distributed energy resources (DERs), but they serve different functions within the energy grid ecosystem. While DERMS is more of a GRID system for distributed energy resource management VPP is a market oriented system that performs DERMS functions based on the market trends on the energy stock exchange intra and day ahead markets.
With other words the key difference between DERMS and VPP is that DERMS is putting focus on operating distributed energy resources with focus on the stability and manageability of the network while VPP is trying to maximize the profit of the owner of the energy resources and does not necessary care about the stability of the network.
Difference between DERMS and VPP in purpose and Functionality
- DERMS:
- DERMS is primarily a grid management tool.
- It focuses on monitoring, controlling, and optimizing distributed energy resources (such as solar panels, wind turbines, battery storage, and electric vehicles) in real-time.
- The main goal is to ensure grid reliability and efficiency by integrating DERs into the existing grid infrastructure. This includes balancing supply and demand, managing voltage, frequency, and addressing other grid stability issues.
- VPP:
- Virtual power plants are more of a market-facing system.
- It aggregates various distributed energy resources to operate as a single power plant. These aggregated resources are then used to participate in energy markets or provide grid services.
- The main objective is to maximize the economic value of these aggregated resources, either by selling energy or providing services like frequency regulation and demand response.
Difference between DERMS and VPP in terms of system scope
- DERMS:
- Typically focused on a specific grid or utility’s service area.
- It manages DERs at a more localized level, such as a distribution network.
- Ensures that DERs are integrated into the grid in a way that supports overall grid stability and reliability.
- VPP:
- Operates on a broader scale, often across multiple service areas or even markets.
- It does not just manage but also actively trades and sells energy and services on the market, positioning the aggregated resources to benefit from market opportunities.
DERMS vs VPP in operational Focus
- DERMS:
- Operates with a primary focus on grid operations.
- It’s concerned with technical aspects like load balancing, voltage regulation, and outage management.
- VPP:
- Operates with a primary focus on market operations and economic optimization.
- It’s more concerned with the profitability of energy trading, optimizing the dispatch of resources based on market prices and demand.
Control and Communication
- DERMS:
- Uses sophisticated communication and control technologies to interact with individual DERs.
- It might involve real-time or near real-time control to manage grid conditions dynamically.
- VPP:
- Focuses on the aggregation of resources and sending aggregated bids to the market.
- It communicates with DERs to optimize their output based on market signals rather than direct grid management.
DERMS/VPP End-User Interaction
- DERMS:
- Typically managed by utility operators or grid managers who are responsible for maintaining grid reliability.
- End-users (like solar panel owners) might not directly interact with DERMS, as it’s more of a utility tool.
- VPP:
- Often involves active participation by DER owners, who can benefit financially by enrolling their resources in the VPP.
- It can include residential, commercial, or industrial participants who allow their resources to be aggregated.
DERMS, VPP and ThingsLog
- DERMS is about managing and integrating DERs to maintain grid stability and reliability. ThingsLog platform could be used as a DERMS system for management and monitoring of many DERs by the energy utility operators – predominantly solar parks, wind and hydro turbines.
- VPP is about aggregating DERs to maximize economic returns through market participation. ThingsLog VPP is a product specifically designed for Virtual power plant management able to monitor DERS, follow the energy stock exchange intra-day and day ahead markets and to maximize the profit while putting under control the imbalance costs.
Both systems complement each other in a modern energy grid, but they have distinct roles in the management and utilization of distributed energy resources.
