What are Distributed Energy Resources (DERs)?

What are Distributed Energy Resources (DERs)?

Distributed energy resources (DERs) are energy networks but on a smaller scale. They produce, store, and manage energy operations, usually located near the area where the energy is to be consumed. DERS provides grid flexibility and energy stability.  

The role of DERs in modern energy systems is to create more bespoke, local and efficient energy generation and storage systems. They differ from centralised power systems because they are usually much smaller - in some cases, some may only consist of a few solar panels. While DERs have much to offer regarding sustainability, they also offer grid reliability. However, they do come with challenges of integration and regulation. One thing is for sure - DERs are transforming the potential of the energy grid and are having a huge impact on how electricity is generated, traded, and consumed.  

Common types of distributed energy resources 

As the renewable industry diversifies, DERs now come in many shapes and sizes. We look at some of the more commonplace occurrences.  

1. Rooftop solar and small-scale wind 

One of the more common forms that DERs take is in photovoltaic (PV) systems and small-scale wind systems. Solar panels can be fitted to the roofs of residential and commercial spaces to generate energy close to the point of use. These small renewable arrays have been the subject of government grants and financial initiatives, making them an affordable investment for some DER project managers.  

2. Battery energy storage systems (BESS) 

For any network to be truly stable and resilient, battery storage must be incorporated. This allows excess generated energy to be banked during high output periods and released during power outages or low production periods. This is even more crucial in the case of DERs, which rely on energy generated on a smaller scale and may experience more frequent power outages. Therefore, they rely on battery storage to supplement energy generated during high-demand periods.  

3. Electric vehicles as mobile energy assets 

While the perception of green transport is that it consumes energy rather than acting as an energy generator, it’s not strictly true. Electric vehicles are not just a method of green transport; they can also act as DERs. They do this by storing excess energy generated and then can potentially return this extra banked energy to the grid.  

How do DERs support the modern energy grid?

Distributed energy resources cannot only increase green practices but also help support—and even improve—the future energy grid.  

1. Enhancing grid resilience and reliability 

For the grid to become more resilient, it needs to be able to cope with unpredictabilities that might come its way frequently. This might include extreme weather events that could cause power outages on a larger, centralised network. Smaller networks can enjoy targeted maintenance and machine health practices as they are more localised. These can operate independently or as part of a larger grid network, taking advantage of and supporting the wider grid when necessary and opting out when detrimental. DERs are becoming more interactive, which helps to facilitate this interaction with the grid when needed.  

2. Reducing transmission losses and congestion 

As DER systems are more localised, energy is considered close to where it is generated. This means that the energy does not have to travel long distances for it to be utilised. Therefore, long-distance transmission isn’t necessary, reducing the likelihood of transmission losses and congestion.  

Economic and environmental benefits of DERs 

Distributed energy resources also benefit the environment and significantly benefit consumers and businesses.  

1. Lower energy costs for consumers and businesses 

Using DERs can result in lower energy costs for consumers of the energy generated compared to fossil fuel equivalents. This is due to several renewable-led benefits, with two key reasons being attributed to the decentralisation of the energy grid. As energy consumption is local, the requirement for upgrading or building new transmission lines is reduced. The fact that customers can generate their own energy also means that dependence on the grid is lesser, and they can avoid price hikes associated with wider networks, particularly on a fossil fuel basis. Energy generated can also be sold back to the grid, reducing the cost of energy even further.  

2. Job creation and local economic development 

The integration of distributed energy resources may also bolster the local economy by creating new employment. For DER activity to occur, new jobs will need to be created. These roles could even provide an opportunity to reskill employees in the fossil fuel industry as this sector begins to be phased out.   

3. Reduced carbon emissions and improved air quality 

Utilising the energy generated via DERs rather than relying on fossil fuels distributed by wider networks increases the amount of renewable energy produced and consumed. Less fossil fuels are consumed, resulting in fewer harmful emissions being released into the atmosphere, which means the air quality in a specific area could be improved by consuming the energy generated by a DER. 

Challenges and considerations in DER integration 

While distributed energy resources have undeniable benefits, they also come with challenges to be overcome in future implementation.  

Grid interoperability and technical limitations 

Our current national grids are not fit to receive an influx of unpredictable energy sources - for example, renewable, energy. Renewable energy can often be non-dispatchable. This means it cannot be turned on or off in the way that dispatchable energy can be - our current grid is set up to interact with dispatchable energy sources, such as fossil fuels. Due to compatibility issues, DERs rely on renewable energy, so integrating these renewable sources with legacy equipment can be challenging. The cos of this can also be quite high, making it unattainable in certain scenarios to scale. 

Cybersecurity and data management concerns 

Data security is a genuine concern with DER systems because integration between many different types of legacy equipment can result in vulnerabilities in the system, with the potential for data leaks. Therefore, compliance with data privacy regulations—particularly in the case of consumer data—is crucial in the development of DERs. 

The Internet of Things - an intricate network of test and measurement sensors monitoring and reporting on all areas of a network - can allow decisions and pre-emptive maintenance to take place on the network, making it more resilient. However, collecting all this data can become problematic in the case of a data leak, leaving DER plants open to cyber attacks. 

DERs offer huge energy benefits but need grid upgrades and security safeguards. Embracing DERs is key to building a cleaner, smarter energy future.