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Residential Demand Response: Water Heaters Get Connected

If you spend any time at all looking at alternative energy sources such as wind power and solar energy, you'll quickly discover one inconvenient truth: alternative energy production is both highly unpredictable and uncorrelated to energy demand.

Even with more traditional power generation methods, efficient, low-cost ways of storing energy are needed so that excess production can be saved during periods of low demand, then used during periods of high demand.

When you're talking about grid-scale storage, though, current battery technology just doesn't cut it. Instead, utilities use other ways of converting excess electricity into other forms of energy, then making use of it when needed. Existing solutions include: pumped storage hydropower, either above or below ground; flywheels; liquefied gas; compressed air; rail-based potential energy; power-to-gas; solar thermal storage; even superconducting magnets.

Each one of these comes with its own advantages and disadvantages, but another potential solution is already lurking in your basement or garage: the humble water heater.

Most people think of their water heater as a device designed solely for heating water for the shower or helping to wash a load of laundry. But electric water heaters can also provide responsive, flexible, scalable, and cost-effective grid energy storage.

Large-tank residential electric resistance water heaters (ERWHs) have been touted by the industry as ideal candidates for demand response (DR) because they contain significant thermal storage; they contribute a significant amount of the residential load; they have relatively high power consumption and a large installed base; and they follow a consistent load pattern that is often coincident with utility peak power periods.

An ERWH is essentially a resistor so its efficiency isn't affected by frequent switching, and it doesn't require reactive power support to operate.

Figure 1

Demand response water heater system (source: Sequentric)

Demand response water heater system (source: Sequentric)

How do they work for DR? A typical proposed eco-system is shown in Figure 1. In a DR-enabled smart water heater, a third heater coil is added below the two normally used. This coil, controlled by the utility, is used to heat water in the lower (coolest) third of the tank at times of excess supply, i.e. low demand. Since hot water use tends to track residential energy demand in general, that results in load shifting from high-demand to low-demand periods.

Even without DR-enabled water heaters, over 250 electric cooperatives in 35 states re already conducting residential programs, reducing demand for electricity during peak hours by simply turning off water heaters remotely for short periods with no noticeable impact on water temperatures.

In the next step, interactive pilot projects are also underway. The Pacific Northwest Smart Grid Demonstration Project, for instance, is communicating with residential hot water heaters to help balance load from wind resources using “transactive control”. The transactive control signals contain information about what power is available (and at what price) and what power is needed by end users.

Water heaters fall under DoEs energy conservation regulations, though, which are forcing phase-out of most over-55 gallon ERWHs – the best ones for DR use – this year because they demand an energy factor of at least 2.057, double the efficiency of a high-efficiency ERWH.

The utilities are fighting back. In the newest development on Capitol Hill, the Energy Improvement Act of 2015 allows for grid-enabled water heaters of 75 gallons or more that have an energy factor of at least 1.061 to still be sold. Utilities will have to report annually on how many water heaters are used in their territory for demand response.

Replacements for non grid-enabled water heaters use heat pumps and can save to 63% energy use per water heater, inherently reducing peak load. Although not as suitable for DR use, a report from national laboratory PNNL concluded that they could still be part of a viable strategy.

Water heaters aren’t the only household appliance that could be used for demand response. Heating and cooling has the largest potential, but everything from refrigerator compressors to dishwashers could theoretically be shifted to run when energy costs are lower if they could receive utility signals. As the IoT revolution adds connectivity to just about every home appliance, this may become feasible in the next few years.

In the meantime, perhaps it's time for some enterprising soul to develop a system with a local feedback loop and route excess energy from a rooftop solar installation into the water heater instead of selling it back to the local utility.

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