A distributed energy resources management system (DERMS) is a platform which helps mostly distribution system operators (DSO) manage their grids that are mainly based on distributed energy resources (DER). By lack of a common definition, a DERMS thus – depending on your point of view – is something similar or even identical with a Virtual Power Plant (VPP).

On some key aspects, people seem to agree: DERMS is a software platform that is used to organize the operation of the aggregated DER within a power grid. The usual DERMS application is found at the distribution grid level. DERMS typically require a more full-fledged integration of various other systems such as a distribution management system (DSM) for integrating it with a utility. Furthermore, an outage management system (OMS) or a supervisory control and data acquisition (SCADA) system is usually needed to provide all DERMS functionality.


From a use case view, one can think of a DERMS as a VPP for applications on the distribution grid levels. DERMS provide grid services that especially focus on the location of each aggregated asset. Objectives of a DERMS are:

  • Voltage management of the grid
  • Optimization of the power flow within the grid
  • Local grid load management (e.g. for smart grid projects)

VPPs on the other hand are responsible for active optimizations and control of power production and consumption. The location of the aggregated doesn’t play an important role. The main purposes of a VPP are:

  • Grid frequency stabilization
    Energy trading
    Portfolio management
    Peak load/demand management