What Distributed Energy Resources Are
Distributed energy resources (DER) are small to medium-scale energy assets located close to where electricity is used, rather than at large centralized power plants. DER can generate, store, or control electricity at the local level, helping balance supply and demand on the distribution grid.
Why DER Matter
DER are becoming essential as grids integrate more renewables and electrification increases (EV charging, heat pumps, industrial electrification). They help improve reliability, reduce peak load, and unlock smarter energy management at sites and across networks.
– Reduce grid congestion by supplying or shifting power locally
– Support peak shaving and lower capacity-related electricity costs
– Improve resilience with local backup and flexible demand
– Enable higher renewable penetration with storage and demand response
– Support faster EV charging rollout by optimizing limited grid connections
Common Types of DER
DER can include a wide range of assets at homes, commercial sites, and industrial facilities:
– Solar PV (rooftop or carport/canopy PV)
– Battery energy storage systems (BESS)
– On-site generators (diesel, gas, biogas) mainly for backup or peak support
– Combined heat and power (CHP) systems
– Demand response and flexible loads (HVAC, refrigeration, industrial processes)
– Smart EV charging and managed fleet depots (EVs as controllable load, sometimes bidirectional)
– Microgrids that coordinate multiple local assets behind a single connection
How DER Work With the Grid
DER interact with the electricity system through monitoring and control, often coordinated by an energy management system (EMS) or aggregator. Depending on local rules and market access, DER can:
– Consume electricity when prices are low or renewable output is high
– Export electricity back to the grid (if permitted and contracted)
– Provide flexibility services like frequency response, capacity support, or local congestion relief
– Adjust demand dynamically to stay within a site power cap
DER and EV Charging Infrastructure
EV charging sites increasingly behave like energy hubs, making DER especially relevant:
– Depot charging can be optimized by combining smart charging with BESS to avoid peaks
– Destination charging can increase solar self-consumption by charging during PV generation hours
– Load management becomes more effective when EV charging is coordinated with building loads and storage
– DER can delay or avoid expensive grid upgrades by reducing peak import demand
Key DER Concepts
Understanding DER often involves these related ideas:
– Behind-the-meter (BTM): assets on the customer side of the utility meter
– Front-of-the-meter (FTM): grid-connected assets operated as part of the wider power system
– Self-consumption: using locally generated electricity on-site rather than exporting it
– Peak shaving: reducing maximum site demand (kW)
– Energy arbitrage: charging storage when cheap and discharging when expensive
– Grid services: contracted flexibility that supports grid stability
Benefits of DER
When designed and operated well, DER can deliver measurable operational and commercial value:
– Lower electricity bills through reduced peaks and better tariff alignment
– Improved uptime resilience for critical loads and charging operations
– Better sustainability outcomes by integrating local renewables
– Faster scalability for EV charging where grid capacity is limited
– More predictable energy costs through on-site flexibility
Common Challenges and Pitfalls
DER value depends heavily on correct sizing, control logic, and local regulation:
– Underestimating peak demand drivers (EV simultaneity, seasonal building loads)
– Poor control integration between CPMS, EMS, and building systems
– Battery cycling strategies that reduce asset life without sufficient savings
– Export limitations, permitting complexity, or unclear interconnection rules
– Data quality issues that weaken optimization and reporting
Related Terms for Internal Linking
– Energy management system (EMS)
– Battery energy storage system (BESS)
– Peak shaving
– Smart charging
– Depot energy optimization
– Load management
– Virtual power plant (VPP)
– Grid congestion management