January 29, 2024

Energy Management System

Table of Contents

Energy Management System

An energy management system (EMS) is a set of tools combining software and hardware that optimally distributes energy flows between connected distributed energy resources (DERs). Companies use energy management systems to optimize the generation, storage and/or consumption of electricity to lower both costs and emissions and stabilize the power grid.

How does an energy management system work?

An EMS collects, analyzes and visualizes data in real time and dynamically controls energy flows. An energy management system is the building block of future energy use cases as it intelligently monitors and controls a variety of energy assets within a household, building or larger site.

How does an energy management system work?

Common components of an energy management system

  • Gateway: a data collection and processing system that ideally operates independently of manufacturers.
  • Software: a range of sophisticated algorithms that create rules and restrictions to control energy assets according to specific needs e.g. to maximize self-sufficiency, charge devices in order of preference or to set limits for energy consumption according to local grid requirements.
  • Interface: a platform that enables users to visualize live and historical data, view KPIs, set parameters, and manage energy flows.

Different EMS applications

  • HEMS (Home Energy Management System) is where an EMS is used in a household to intelligently manage small assets, such as an electric vehicle, heat pump, photovoltaic (PV) system and/or battery.
  • BEMS (Building Energy Management System) is a method of monitoring and controlling a building's energy needs. It usually incorporates the management of heating, ventilation and cooling (HVAC), lighting, security measures and, increasingly, EV charging needs.
  • FEMS (Factory Energy Management System) allows the industry sector to make energy generation and consumption more efficient.
  • CEMS (Community Energy Management System) builds on the previous applications of EMS and integrates HEMS, BEMS and/or FEMS to enable holistic, smart energy management of entire communities on a larger scale.

Different types of energy management systems

Rule-based energy management system

A rule-based energy management system focuses on designing and implementing the logic governing energy distribution among connected DERS. It relies on established rules and predefined guidelines to make real-time decisions about energy allocation. The rule-based approach ensures operational stability, making it suitable for scenarios where straightforward decision parameters can achieve effective energy management.

Forecast-based energy management system

A forecast-based energy management system, on the other hand, specializes in crafting advanced optimization strategies for complex energy management scenarios that rule-based EMS cannot address. This system aims to enhance profitability, computational efficiency, and security in a changing energy landscape. By analyzing various forecasting strategies, considering factors like model types, data availability, and optimization frequency, this approach helps prosumers make informed decisions about energy usage and production.

The system factors in real-time data, such as rooftop PV production, battery status, and load consumption, along with external information like spot electricity prices or weather forecasts. This enables the EMS to make intelligent decisions on when to charge or discharge a battery, when to use locally-generated solar energy or draw power from the grid, and how to constantly optimize energy management strategies to accommodate the three D’s of the new energy era – digitization, decarbonization, and decentralization.

Cloud-based energy management system

what is a cloud-based energy management system

A cloud-based EMS is a cutting-edge energy management software solution that revolutionizes energy management for utility companies, energy consultants, and businesses across various industries.

Leveraging the power of cloud computing, this system enables remote access to essential energy-related data and tools, eliminating geographical constraints. It encompasses a comprehensive suite of features, including data collection from energy meters and sensors, secure cloud-based storage, advanced analytics, and real-time reporting.

Users benefit from the system’s scalability, allowing it to effortlessly adapt to evolving needs. Moreover, it empowers energy managers and consultants with the ability to remotely monitor energy parameters, optimize consumption, and ensure compliance with energy regulations and standards.

By promoting collaboration and accessibility, it fosters transparency and efficiency in energy management practices.

Different EMS functions for different industries


In the e-mobility space, an EMS plays a pivotal role by enabling dynamic load management, efficient charging optimization, and smart bidirectional charging. The EMS actively manages the charging process of electric vehicles (EVs) by dynamically distributing power to minimize peak demand (peak shaving), while always avoiding grid overloads – this guarantees constant grid stability and cost-effectiveness.

Through advanced algorithms, the EMS optimizes charging schedules based on factors like capacity tariffs, travel requirements, and grid conditions, reducing operational costs and improving energy efficiency. In the case of bidirectional charging, the EMS intelligently controls when an EV charges and discharges – according to local supply and demand, electricity prices and other factors – to minimize costs, maximize self-sufficiency and stabilize the grid.

White goods

With smart meters and communication protocols like EEBus, an EMS facilitates real-time data exchange and enables coordinated energy management of white goods (e.g. washing machine, fridge, dishwasher). The EMS takes the total load of white goods into account to then adjust the energy consumption of heavy consumers (e.g. heat pumps and electric vehicles) accordingly. The EMS can also consider electricity prices and encourage operation at optimal times to reduce electricity costs and alleviate stress on power grids during peak periods. By aggregating data from various white goods, users are able to monitor consumption patterns and make more informed decisions about when they use devices.

Photovoltaics (PV)

EMS solutions allow sites with rooftop solar panels to maximize self-sufficiency and lower costs. For example, the EMS uses historical consumption patterns, forecasts and setpoints to ensure that rather than being curtailed, surplus solar power is used to charge or power other devices, such as a battery or electric vehicle (EV). It also feeds electricity back to the grid when prices are high and draws from the grid when prices are low to keep costs to a minimum. An EMS can be configured to reach different goals, for example to minimize costs or to minimize emissions.

what are the functions of an energy management system

Heating and cooling

A heat pump, favored for its high efficiency and low CO₂ emissions in heating and cooling, can leverage an EMS to unleash its full potential. EMS technologies integrate heat pumps into holistic systems to intelligently respond to demand fluctuations. In a HEMS, a heat pump’s operation can be adapted based on real-time electricity prices, grid conditions, and user preferences. This enables load shifting, where heat pumps adjust their operating schedules to times of lower electricity demand and pricing, resulting in reduced energy costs.

Integrated renewable energy resources

The integration and coordination of various energy sectors – such as electricity, heat, and mobility – aims to optimize the overall energy efficiency and enhance the integration of renewable energy sources. This is often called sector coupling. Electrification, a key aspect of sector coupling, involves the replacement of fossil fuel-based with electric technologies to save money and reduce greenhouse gas emissions.

In this context, having an energy management system becomes crucial, as it enables the seamless coordination and control of distributed energy resources and their electricity flows across multiple sectors. An EMS maximizes the utilization of energy and minimizes waste to contribute to a more sustainable and integrated energy landscape.

The benefits of an EMS

For businesses

Gain visibility and transparency

An EMS provides real-time monitoring, data analysis, key performance indicator (KPI) measurement, and visualization of energy consumption and savings. This enables more informed and effective decision-making to enhance efficiency, increase sustainability and optimize performance across an entire site.

Lower costs

By optimizing the utilization of each asset, an EMS ensures that costs are constantly minimized: electricity is drawn from power grids during cheap periods, locally generated electricity is maximized, and consumption is aligned with optimal weather and off-peak demand. In addition, use cases like dynamic load management and peak shaving ensure that power is optimally used within existing grid infrastructure. This eradicates or minimizes the need for costly grid extensions and significantly lowers grid fees.

Stay ahead in a changing landscape

By employing an EMS, businesses gain a competitive edge in an evolving energy landscape characterized by digitization, decarbonization, and decentralization. An EMS enables efficient energy resource management, the alignment of consumption and sustainability goals, and lowered costs. It seamlessly integrates variable renewable energy (VRE) sources into energy systems, to enable faster scaling of clean energy projects and reduced reliance on fossil fuels.

Tap into new markets

what are the benefits an energy management system for businesses

Businesses can tap into new markets by offering tailored energy solutions that align with evolving trends and customer demands. New markets entail both new regions, with different regulatory environments, as well as new energy fields. Rather than simply offering individual products, companies are shifting their focus towards holistic energy solutions – this means that manufacturers, service providers and utilities are all moving beyond offering a single product to an energy-as-a-service model that offers greater customer value. This requires an energy management system to connect different devices and features into one solution. For example, rather than simply providing HVAC units, the manufacturer Viessmann shifted its focus to instead offer customers holistic home energy management systems.

Enhance agility with extendible features

Adaptable and extendible features are the key to accommodating constantly changing regulation and customer preferences. For example, rising and increasingly volatile electricity prices, combined with new regulation that pushes dynamic tariffs, has caused a significant push to time of use tariffs. Companies with an extendible EMS can more easily adopt new solutions as the market ripens for such complex use cases. In doing so, businesses can tailor their strategies to address customer needs, thereby enhancing agility and bolstering their market positions.

Reduce complexity with a single interface

An energy management system mitigates business complexity by offering a unified interface that consolidates various energy operations into a cohesive platform. This singular access point simplifies tasks by streamlining monitoring, control, and data integration for diverse energy assets. Real-time insights into energy usage, automation of control strategies, and centralized reporting enhance decision-making and resource optimization. The EMS’s cross-sectoral communication capabilities foster collaboration between energy assets, while its reduced training requirements for parties involved, especially the end user, expedite user proficiency.

Lower carbon emissions

With over 70% of greenhouse gas emissions attributed to the energy sector, an EMS serves as a powerful tool in the fight against carbon emission. For one, an energy management system enables demand response, allowing businesses to curtail energy usage during peak hours, thereby decreasing reliance on fossil fuel-based power generation.

And there is also load optimization that ensures that an equipment operates at peak efficiency, preventing energy wastage and lowering overall consumption, leading to reduced emission. On top of that, an EMS facilitates the seamless integration of renewable energy sources, such as solar and wind, into the grid. By prioritizing the use of renewable energy when available, en EMS reduces the need for fossil fuels, which is the main culprit for carbon emissions.

The use of battery energy storage under EMS control further enhances emission reduction by storing excess renewable energy for use during peak demand periods. Lastly, data-driven decision-making, a hallmark of EMS, continuously analyzes consumption patterns, identifying opportunities for optimization and lower emission.

For end consumers

what are the benefits of an energy management system for consumers

Minimize energy costs (lower energy bill)

An EMS offers end users a host of benefits, chief among them being the substantial savings on energy costs. . In a household, for example, users can charge their EV and battery when PV generation is high or when electricity prices are low. They can also avoid high electricity loads during costly consumption spikes, which can significantly reduce power bills.

Maximize self-sufficiency

A PV system alone is not enough to maximize the self-sufficiency of a household. This must be combined with other assets to ensure that energy is produced, stored and consumed in the most efficient and intelligent manner. An energy management system combines all assets that produce, store or consume energy and optimizes the energy flows between them to ensure that self-generated energy reaches its maximum utilization. This leads to increased independence from the grid, as well as minimized costs and emissions.

Lower carbon footprint

Considering that household energy consumption in Europe accounts for around 60% of global greenhouse emissions (GHGs), an EMS plays an important role in emissions reduction. An EMS allows consumers to optimize their energy consumption, minimizing their reliance on the power grid and maximizing their self-generated solar energy. The consumption of energy devices within the house, coupled with e-mobility services, constitutes a substantial portion of a household's CO2 emissions, especially in economies with a low share of renewables in the power mix. Smart and holistic energy management through an EMS ensures that rooftop solar covers as much energy demand as possible and only limited solar power goes to waste. In this way, renewable energy is more intelligently integrated and utilized in modern power systems.