Could Water Heaters Double as Batteries?

February 26, 2016


Not as svelte as a Tesla Power Wall, but – Smart is the ultimate sexy.

Chris Mooney in the Washington Post:

New research suggests that in the future, one of the most lowly, boring, and ubiquitous of home appliances — the electric water heater — could come to perform a surprising array of new functions that help out the power grid, and potentially even save money on home electricity bills to boot.

The idea is that these water heaters in the future will increasingly become “grid interactive,” communicating with local utilities or other coordinating entities, and thereby providing services to the larger grid by modulating their energy use, or heating water at different times of the day. And these services may be valuable enough that their owners could even be compensated for them by their utility companies or other third-party entities.

“Electric water heaters are essentially pre-installed thermal batteries that are sitting idle in more than 50 million homes across the U.S.,” says a new report on the subject by the electricity consulting firm the Brattle Group, which was composed for the National Rural Electric Cooperative Association, the Natural Resources Defense Council, and the Peak Load Management Alliance.

The report finds that net savings to the electricity system as a whole could be $ 200 per year per heater – some of which may be passed on to its owner – from enabling these tanks to interact with the grid and engage in a number of unusual but hardly unprecedented feats. One example would be “thermal storage,” which involves heating water at night when electricity costs less, and thus decreasing demand on the grid during peak hours of the day.

Of course, precisely what a water heater can do in interaction with the grid depends on factors like its size or water capacity, the state or electricity market you live in, the technologies with which the heater is equipped, and much more.

“Customers that have electric water heaters, those existing water heaters that are already installed can be used to supply this service,” says the Brattle Group’s Ryan Hledik, the report’s lead author. “You would need some additional technology to connect it to grid, but you wouldn’t need to install a new water heater.”

Rocky Mountain Institute:

Of all the new tech emerging on the energy landscape, water heaters seem an unlikely contender. Alongside battery players like Tesla, with its Model X and Powerwall, water heaters look like even more of a stretch. However, the growing industry consensus is that grid-interactive water heaters have serious potential. They just might be the unexpected battery in your basement.

Why the buzz about water heaters?

Water heaters and batteries have one fundamental feature in common: they both store energy, batteries as charge and water heaters as heat. This ability to store energy gives water heaters flexibility. For example, they can be heated at night when power is cheap without jeopardizing your ability to take a hot shower in the morning.

Grid-interactive water heaters (GIWH) are electric water heaters that the grid operator or the local utility can control in real time (or the customer, automated software, or a third party could control them in response to granular retail price signals from the utility). This controllability makes a GIWH valuable for more than just hot showers. For example, in addition to heating water when power is cheap, it can also shut down during yearly system peaks, help integrate renewables, and provide services to the electric grid like frequency regulation. Optimizing water heaters like this can significantly reduce carbon emissions and, as explained below, create billions of dollars in value.

Better yet, this functionality is not dependent on future technology: any electric water heater with a tank—be it old-school electric resistance or newfangled heat pump—can become grid-interactive. Making modifications to an existing water heater to install a grid-connected communications device takes a couple of hours and could cost a few hundred dollars. However, building in grid-interactive capabilities at the factory only costs a few dollars and provides much more value to the grid and to the customer.

A high-value source of demand flexibility

In our 2015 report, The Economics of Demand Flexibility, RMI analyzed the potential of flexible loads to provide significant economic value to the grid, finding at least $13 billion per year from common residential loads like water heaters and air conditioners. We found that water heaters, especially, have the potential to be an easily-tapped and high-value source of this flexibility.

A new study by the Brattle Group provides an in-depth exploration of the economic benefits of GIWHs. The fact that the study was jointly commissioned by utilities, environmental advocates, and industry groups highlights the diversity of groups interested in the potential of GIWHs. Brattle analyzed the potential of multiple scenarios, calculating that up to $200 in net system benefits may be realized annually for every GIWH participant. Ultimately, the authors concluded that GIWHs are a resource with significant opportunity for reductions in both costs and emissions, and one whose operational viability is already being demonstrated in pilot projects around the country—an exciting endorsement for the mild-mannered water heater.

$3.6 billion/year in value from a grid-interactive fleet of water heaters. Source: RMI.

But are they valuable enough to reach their full potential? The answer seems to be yes: RMI calculates that, if America’s nearly 50 million residential electric water heaters went grid-interactive, the system benefits would reach $3.6 billion. This number comes from the following sources of value:

  • Energy arbitrage: simply heating water when power is cheaper (at night rather than in late afternoon, for instance) provides major value. ($1.8B)
  • Avoided generation: avoiding utility investments is a huge source of value. By ensuring that water heaters don’t draw power during times of peak electricity demand, utilities can avoid building extra generation resources. ($1.4B)
  • Avoided transmission & distribution: for the same reason as above, not using power on peak avoids investment in expensive transmission & distribution system resources. ($400M)
  • Renewable integration: water heaters charging up at night could use wind energy that would otherwise be curtailed, or daytime solar that would otherwise be exported for less-than-retail compensation in certain markets. ($36M)
  • Smart energy savings: installing a grid-interactive device could also allow homeowners to program their water heater for “vacation mode,” which prevents energy waste through standby losses. ($29M)

23 Responses to “Could Water Heaters Double as Batteries?”

  1. We have an electric water heater. It encourages water conservation.

    20-40 cents/kWh (tiered SDG&E rates) + electric hot water heater = very short showers.

    Wouldn’t mind a smarter water heater, even if not grid-interactive. I’d program it so that it stays off most of the day.

  2. dumboldguy Says:

    My rural electric coop in NO VA (NOVEC) has offered what they call a “load management program” since 1979. You can voluntarily have radio-controlled cut-off devices attached to your hot water heater and A/C that will allow the Coop to cycle them on and off at peak load times.

    The incentive for this is free repairs for any malfunction of the electrical components of your hot water heater and a free evaluation of your “broken” A/C before you talk to a contractor. (And they promise to rush right over when you call with a problem).

    NOVEC has about 150,000 customers and says that 50,000+ have agreed to have at least one device attached, so that’s a minimum “penetration” rate of ~16%, and could be as high as ~33% if all customers did both.

    IMO, This is an “every little bit helps” strategy. Electric hot water heaters will need to be even better insulated for max benefit and it will take a long time (and some $$$) to replace the old stock and fit the load management devices. Inertia is a problem, as evidenced by the fact that NOVEC has gotten so few to sign up in 37 years. There will have to be direct $$$ incentives (or government mandates) for most people to buy GIWH, and the fact that electricity is cheaper lately doesn’t help, just as SUV’s and pickups are having a sales surge because of cheap gasoline—-GIWH savings likely won’t counter the CO2 from them.

  3. grindupbaker Says:

    In my prior 1960s house they ran the hot water pipe a long way with no insulation. I do turn the (CH4 gas) heater up a bit in winter & down a bit in summer. ~1959 the slightly fancy schmancier homes across from the council homes that Alan Rickman & I grew up in had “night storage heaters” that Cushman told me used bricks for thermal storage, heated at night only. Bring it back not that I’ve studied brick thermal capacity but because we could call it “The Brick Wall”.

  4. MorinMoss Says:

    I don’t agree calling these “batteries” as you can’t get electricity OUT of them

    • dumboldguy Says:

      Yep, the only real “battery” here is the assault being committed on the minds of the public by the media types that value “cuteness” over scientific accuracy.

      (Not you, Peter, you’re simply reporting what others have said, and it DOES make a catchy Crock headline, so we forgive you).

      • greenman3610 Says:

        energy is energy. whether it’s heat, or electrons. there are other ideas for storage that use novel media

        also, smart devices on walk-in freezers at grocery stores can “store” cold by operating more at night, during low usage / low cost hours.

        • j4zonian Says:

          It’s also crazy to use energy to heat a house in cold weather, incidentally heating the inside of the refrigerator with that energy and then using more energy to cool the inside of the refrigerator and reheat the inside of the house. Better to hook the refrigerator to the outside, with a heat exchanger and a simple thermostat.

          • dumboldguy Says:

            LMAO! Have you got a link that explains the “science” behind this idea?

          • otter17 Says:

   is an example. See first couple paragraphs of main page to get an idea of the engineering principles they apply to refrigeration.

            It only makes sense to use a reservoir of air/fluid that is at the desired temperature that exists on-site at the point of usage. For refrigeration and freezing, often the biggest appliance loads in residential and commercial, that can mean drawing on cold outside air. The same can be said with space heating, drawing upon the onsite resources such as geothermal or outside air temperatures. Geothermal is catching on quite fast, and is essentially a mainstream appliance to add to new residential home builds. Automatic fresh air circulation systems are not as prevalent, but act on the same principle as the refrigeration concept, simply draw upon the outside air when needed. It also has the added benefit of automatically managing the building’s circulation, reducing those days where the air condition feels to stuffy or stale.

            These require some forethought in building arrangement, or integrative design as Amory Lovings calls it.

        • dumboldguy Says:

          Energy is not simply energy. The laws of thermodynamics govern how “energy” behaves (think entropy), and all our efforts to move it around and “store” it merely add to the sum total of energy in the global system, i.e., produce AGW.

          Heating up piles of bricks and making huge ice cubes in the basement are clever idea, but until such time as NONE of the energy to do so (or make the apparatus needed to do so) comes from fossil fuels, we will continue to lose ground and heat the planet up.

          In the meantime, all these “techno-fixes” are nothing more than putting lipstick on a pig, promoting bright-sidedness among the science-illiterate, and encouraging scam artists to think of more ways to make a buck.

          • otter17 Says:

            Yes, a good point that energy is certainly limited in its ability to convert or sometimes to be stored.

            I think what Peter is getting at and what researchers have been trying to figure out is how to use energy in the same form by which it is produced (use stored heat to heat the building, not likely to produce electricity). In that particular case, energy is energy. Having developed storage methods for thermal, electrical, etc, energy doesn’t necessarily mean we would continue to lose ground, even if these storage methods were powered solely by fossil fuels over the next decade or two, which is hopefully unlikely. Non-GHG emitting energy production is certainly needed, with deployment and research there ongoing. Storage offers some good benefits in increasing the overall efficiency of either the energy production chain overall (ex: maybe won’t need to deploy as many peaker power plants, or make use of night-time wind) or for the individual building, industrial process, or vehicle.

            In the end, these technologies make for a potentially higher deployment rate and percentage penetration of renewables. Yes, there are scam artists that may be out there, but by and large these methods are sound engineering, simply requiring more field deployment and production experience. Of course, techno-fixes won’t be the end, requiring some real evaluation of policy and conservation efforts among the high per-capita energy users in order to make the changes required.

          • dumboldguy Says:

            I will be an old bore and simply repeat myself regarding energy “storage”.

            “….until such time as NONE of the energy to do so (or make the apparatus needed to do so) comes from fossil fuels, we will continue to lose ground and heat the planet up”.

            “…all these “techno-fixes” are nothing more than putting lipstick on a pig, promoting bright-sidedness among the science-illiterate, and encouraging scam artists to think of more ways to make a buck”.

          • otter17 Says:

            The repeated points were already addressed. Energy storage isn’t the only fix, but does help human energy consumption patterns in that they enable flexibility to conserve energy, use it in an overall more efficient manner, or more effectively make use of variable renewable resources. These efforts, coupled with significant policy measures and conservation of energy consumption offer a shot at making it to the end goal of halting the increase in GHG concentrations while keeping the human populace relatively happy.

            I’m not seeing the value of downplaying potential avenue for progress simply because it doesn’t get to the end goal on its own. There are no silver bullets to solve the problem.

    • grindupbaker Says:

      Electricity can be gotten out of any energy source. The issue is the efficiency. 1 kWh of electricity converted to warmer water cannot be converted back to as much as 1 kWh of electricity by any technology because the perpetual motion machine turned out to be a trick. I think it also relates to energy density and I’m certain it also relates to entropy (if you drop a bag of Smarties you must make carbon rusty to get them back). I hope this helps for anybody about to buy a water heater.

  5. fredeliot Says:

    Back in the ’60s we had an electric water heater what had its own meter with a built in clock that controlled the bottom element and only heated the water during the night. The upper element kicked in only if necessary. The tank was at least 100 gal and the electricity for it was $.0075 /kWh.

  6. Most households in New Zealand has had ripple controlled water heaters since at least the 1960s.

    A ripple frequency signal superposed onto the mains supply controls HW heating via a relay. Electricity retail suppliers offer lower tarrifs in exchange for the control.

  7. John Scanlon Says:

    I remember TV ads for off-peak hot water in Australia in the mid-70s (‘tastes the same’ – ‘still steams!’ – ‘it’s different?’), not sure if that was similar to the NZ system but could be.

  8. MorinMoss Says:

    Fellow Crockpots, help me out, please. There’s a reader of this site who keeps a blog of announcements of battery / energy storage breakthroughs going back to the 70s and I’ve lost the bookmark.

    Is that any of you or can someone point me in the right direction?

    Thanks in advance.

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