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VPP vs DERMS
VPP vs. DERMS: the outcome and the tool
Two acronyms, often used interchangeably, that describe different jobs — one sells flexibility to markets, the other keeps the local grid safe.
VPP Economics has no affiliation with, sponsorship from, or endorsement by any utility, aggregator, platform, or device maker named here.
The short answer
- A DERMS is the utility’s tool; a VPP is the outcome. A DERMS gives grid operators visibility and control over distributed resources; a VPP aggregates those resources to act like a power plant.
- They face different directions. A VPP is market-facing — it sells capacity and energy. A DERMS is grid-facing — it keeps local wires within limits (GridBeyond).
- The lines are blurring. Several vendors sell one product as both, and utilities increasingly run VPPs through their own DERMS.
- Why it matters to you: the more a program is about local grid relief, the more location-specific — and potentially valuable — your device becomes.
DERMS vs. VPP at a glance
Simplified roles; real products often combine both.
Swipe to see the full chart →
Where each fits in the money trail
In a wholesale VPP, the aggregator bids a fleet into a market and is paid by the grid operator. In a utility VPP, the utility often uses a DERMS to decide when and where to call devices, then pays customers through a program. Camus, for example, sells grid DERMS and cites $75 million of capital flexibility at AES Indiana (Camus); EnergyHub runs utility VPP programs covering 2.6 million devices (Business Wire).
Aggregation is the third term you will see: the commercial act of signing up many sites so they can qualify for a market. Most VPP companies do some of all three.