On May 28, Schneider Electric and AutoGrid announced that Schneider had made an investment in AutoGrid, making Schneider a major shareholder in the company. The two have already been partnering on projects, but this move indicates a more formal relationship in what the two companies are calling a co-innovation partnership. Schneider will use AutoGrid’s distributed energy resource management system (DERMS) to provide artificial intelligence-driven solutions for utilities and commercial and industrial customers.
DERMS Competition
This transaction is the latest activity in a hot DERMS market. There are several large energy conglomerates like Schneider and many startups like AutoGrid that are developing new software capabilities to help grid operators control the DER that are proliferating on the system.
The question for the large companies is a classic growth problem: build or buy? Some vendors, like Siemens, GE, and Lockheed Martin, have chosen to build internal DERMS capabilities. Others, like ABB, have decided to partner with smaller, more-specialized players (in ABB’s case, it was Enbala). In Schneider’s case, it has been developing DERMS-like capabilities in house, but it must have hit the critical decision point where it weighed the cost of continuing to invest internally versus the benefit of outsourcing the expertise.
The Bigger Picture
DERMS is just one aspect of the rise of DER across the globe that vendors, utilities, and customers are trying to use to their advantage. Initially, DER was used at the market edge, where conventional power was difficult and expensive to provide. However, technology advances, business model innovation, changing regulations, and sustainability and resilience concerns have brought DER into the core of future deployment of energy infrastructure. The global proliferation of DER has begun to have a significant, if controversial, influence on the electricity grid and industry.
Rapidly expanding investment in DER represents a major shift from the centralized, one-way electrical grid. This growth has generated concern and optimism throughout the power industry as regulators and grid operators work to understand the evolving landscape that is redefining the relationship between utilities and customers. The shift from centralized generation requires innovative technologies and solutions on the part of grid operators. Advanced software and hardware enable greater control and interoperability across heterogeneous grid elements that are key components of the Energy Cloud.
How to Learn More
Navigant Research recently published its Global DER Overview report, which covers the latest opportunities and barriers in the fast-moving DER space. Vendors of all sizes, from inside and outside the energy industry, are strategizing to figure out the best way to profit from DER and provide customer-friendly solutions that maximize the benefits and minimize the hassles of these complex technologies.
