Electric Water Heaters – A Hidden Battery

Electric water heaters are a largely untapped resource with significant potential for load control and energy efficiency.
Published: Wed 17 Feb 2016

Domestic water heaters have long been used as a low cost and easy to implement option for utility demand management. But surprisingly programmes have been limited, despite regular attempts to promote the concept, and they remain an under-utilized resource.

But maybe for not much longer. A study by the Brattle Group for the US National Rural Electric Cooperative Association (NRECA), the Natural Resources Defense Council (NRDC), the Peak Load Management Alliance (PLMA) and Great River Energy, finds that water heaters represent a significant resource in the US.

In that country electric water heaters are the third largest source of residential electricity consumption accounting for 9%, behind space cooling (13%) and lighting (11%). There are approximately 50 million water heaters nationwide.

Water heater load control strategies

The premise of the Brattle study is that electric water heaters are essentially pre-installed thermal batteries that are sitting idle. It evaluates the economics of different strategies for controlling the load of these water heaters under different market scenarios and for two different water heater types (electric resistance water heaters – ERWHs, and heat pump water heaters - HPWHs).

Findings include the following:

• A peak shave strategy, in which load is curtailed during peak hours on a limited number of days per year, is well suited for market conditions in which there is a peak demand-driven need for generation and/or transmission capacity, a relatively flat energy price profile, and/or a limited ability to promote adoption of larger ERWH tank sizes.

• A thermal storage strategy, in which the water is heated each night to avoid higher priced hours during the day, can significantly increase benefits relative to the peak shave strategy, at little incremental cost, if offered to customers with larger (80+ gallon) water tanks in market conditions with a significant price differential between peak and off-peak periods.

• A fast response strategy that would provide balancing services in the form of quick load increases and decreases can significantly increase benefits over the other two load control strategies in markets with a need for resources that can quickly ramp load up and down. Ancillary services benefits are less dependent on tank size but very dependent on market conditions, including whether market rules allow demand-side resources to participate in ancillary services markets.

• Uncontrolled heat pump water heaters provide significant economic and environmental benefits in those locations where often-challenging technical factors can be effectively addressed.

In the case of the fast response strategy, the net benefits could reach around US$200 per participant per year under certain market conditions. This would effectively pay for the entire cost of the water heater and associated control equipment (including installation) in 5 years. Considering only incremental costs of the advanced control capability, the payback period is around 3 years.

Community storage initiative

The Brattle report was released at the same time as the launch of a new Community Storage initiative to demonstrate the potential of aggregating distributed energy technologies and appliances in homes in communities in order to increase energy efficiency, better integrate renewable energy resources and reduce customers’ monthly electric bills.

In one such community storage programme, Minnesota-based generation and transmission cooperative Great River Energy has been able to store a gigawatt of energy each night by controlling the electric resistance water heaters of 65,000 end-use members.

“When the wind is blowing or the sun is shining, large capacity water heaters can be enabled to make immediate use of that energy to heat water to high temperatures,” explains Gary Connett, director of member services. “The water heaters can be shut down when renewables are scarce and wholesale costs are high.”

Further reading

Brattle Group: The Hidden Battery. Opportunities in Electric Water Heating