Unlocking the Full Potential of Distributed Energy - Combining local flexibility markets with Utility DERMS

In recent years, flexibility markets have become an increasingly trusted solution for managing the growing complexity of modern grids. More and more utilities and Distribution System Operators (DSOs) across the globe are leveraging these markets to integrate Distributed Energy Resources (DERs) like solar panels, wind farms, and batteries into their grid operations. Piclo has led the way in the evolution of these markets, with key advancements in functionality, such as short-term flexibility services, seamless end-to-end experiences, and automation via APIs.

And we can go even further.  Automating more of the DSO-side processes, will ensure that the growing number of flexibility opportunities will not become bottlenecked by manual interfaces that can no longer keep up with the pace of change,, especially as DER adoption accelerates.

Amid this evolution, another transformative technology has emerged to support DSOs: Utility DERMS (Distributed Energy Resource Management Systems). These systems help DSOs better understand the challenges posed by DERs by leveraging the "digital twin" of the distribution grid. Utility DERMS can predict grid issues and propose solutions using DSO-owned or DSO-controlled assets, such as flexible connections. However, as grid complexity continues to increase and the number of DERs grows, relying solely on DSO-owned/controlled assets is no longer enough. To stay ahead, DSOs need access to—and the ability to influence—the thousands of third-party-owned DERs scattered across the grid.

This is where Piclo comes in. Piclo has developed a digital solution designed to facilitate the integration of Distributed Energy Resources (DERs) into energy grids through local flexibility markets. It acts as a marketplace where Distribution System Operators (DSOs) can procure flexibility services from third-party-owned DERs, such as solar panels, batteries, electric vehicles (EVs), and demand response (DR) systems. By connecting these resources to the grid, Piclo helps DSOs better manage supply-demand imbalances, grid congestion, and other operational challenges that come with a decentralised energy system. Furthermore, by integrating Piclo with Utility DERMS, DSOs can unlock further potential by enhancing grid awareness, improving flexibility procurement, and enabling automation at scale. Let’s dive into how this integration can work in practice.

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Understanding the Grid Architecture: A Symbiosis Between DSO and Third-Party Assets

The distribution grid consists of two primary types of assets:

1. DSO-Owned Assets (Grid Assets): These are assets such as transformers, switchgears, and other infrastructure that the DSO controls. Many of these assets can be tele-controlled, providing real-time flexibility (e.g., network reconfiguration, voltage control).
2. Third-Party-Owned DERs (DER): These assets—such as solar panels, electric vehicles (EVs), and batteries—are owned by independent entities, including energy providers and individuals. These assets can be operated by Flexibility Service Providers (FSPs) to provide services like demand response (DR), generation turn-up and curtailment, and consumption turn-up and turn-down.

Through Piclo, DSOs can access flexibility from third-party-owned DERs by publishing their grid needs and acting as a "Buyer" in the flexibility market. However, until now, the Utility DERMS has not been fully integrated with these markets, preventing DSOs from tapping into the full potential of both DSO-owned and third-party DERs.

By connecting Piclo with Utility DERMS, this untapped potential can finally be realized, creating a seamless flow of information and automation that powers grid flexibility at scale.

Enhanced Grid Awareness and Predictability: Unlocking More Accurate Forecasting

Currently, Utility DERMS provides visibility over large DERs, typically renewable energy plants (RENs) connected to the medium-voltage (MV) network. However, thousands of smaller DERs—such as residential solar panels, home batteries, and EV chargers—are dispersed across the grid and largely remain invisible to traditional DSO systems.

This is where Piclo can make a transformative impact.

• Improved Static Data: By integrating with Piclo, DSOs gain visibility into previously untracked DERs. Through the price signals and market opportunities sent to the market via Piclo, DER assets that were once invisible will surface, enriching the grid’s digital twin.
• Improved Dynamic Data: Piclo also brings dynamic, near real-time data about the commitments of these DER assets in flexibility markets. This insight allows DSOs to conduct better technical assessments before making bid decisions, that can also enable smoother coordination with Transmission System Operators (TSOs) and reduce the risk of grid instability.

*The diagram on the left demonstrates current DERMs viability and access to large but few DERs. Diagram to the right shows that by integrating Piclo with DERMs DSO’s are able to tap into a richer ecosystem with more opportunities. 

With a more accurate digital twin, DSOs can improve their grid forecasting capabilities:

• Earlier Identification of Grid Needs: By pinpointing grid issues in advance, DSOs can use market-based DER flexibility as a reliable solution alongside traditional tools, such as network reconfiguration.‍
• Better Price Signals: With more accurate forecasting, DSOs can send more targeted price signals, ensuring they pay the right amount for the flexibility they need at the right time. These improved signals are more attractive to Flexibility Service Providers (FSPs), driving greater liquidity and competition in the market.

Automating Flexibility Procurement Based on Real-Time Grid Topology

Imagine a scenario where the DSO’s Utility DERMS identifies an impending grid issue—say, a transformer in an MV substation is expected to exceed its operational limits in the next 24 hours. Traditionally, DSOs would announce this need manually and search for flexibility via a geographic competition, specifying the area where flexibility could be sourced.

By integrating with Piclo, this geographic information can be combined with grid topology, which can in particular further boost the effectiveness of using assets on the low voltage network. By using real-time updates from Utility DERMS, DSOs can access the most up-to-date version of the grid's topology, allowing flexibility to be sourced from the right assets—connected to the right circuits. This ensures that the flexibility purchased is relevant to the specific grid need, optimizing the entire process.

Accessing and Influencing a Broader Pool of DERs

The true power of integrating Piclo with Utility DERMS lies in the ability to tap into the vast pool of non-DSO-owned DERs. While these assets were once seen as unmanageable variables in the grid equation, Piclo’s market-driven approach allows DSOs to access and influence their behavior.

When a grid issue arises—say, a transformer approaching overload—Utility DERMS can pinpoint the flexibility services needed, factoring in the full context of the grid’s status. Piclo then automates the dispatch of flexibility services to the relevant DERs, ensuring that the necessary adjustments are made to keep the grid stable.

This integration turns previously unmanageable DERs into valuable resources, with the DSOs able to influence their operation and thus optimize grid operations to build a more resilient, sustainable grid.

Conclusion: The Key to Unlocking Grid Flexibility and Future-Proofing Operations

The integration of Piclo with Utility DERMS is more than just a technical upgrade—it offers a further step to unlocking greater potential of local flexibility markets and ensuring that DSOs can navigate the increasing complexity of modern energy systems.

By combining Piclo’s market-based flexibility solution with the advanced grid optimization capabilities of Utility DERMS, DSOs can:

• Achieve greater grid flexibility through access third-party DERs.
• Improve forecasting accuracy, identifying grid needs earlier and more precisely.
• Automate the procurement of flexibility services based on up-to-date grid topology.

As the energy landscape continues to evolve, DSOs need smarter, more automated tools to manage the decentralized grid of the future. Piclo is the digital solution that will help unlock that future, enabling DSOs to create a flexible, integrated, and resilient grid for a more sustainable energy future.

For more information, contact us today.