While the introduction of the Tesla Power Wall was creating a stir in the electricity industry, Great River Energy and several partners were quietly working to show utilities that they already have storage capacity that most haven’t begun to tap.
The Minnesota generation and transmission cooperative had teamed up with the National Rural Electric Cooperative Association (NRECA), Peak Load Management Association (PLMA) and the Natural Resource Defense Council (NRDC) to reveal the “hidden battery in the basement.”
“That is what the electric water heater is,” declared Great River Member Services Director Gary Connett.
‘Battery’ almost banned
With three decades of experience in load shaping with electric water heaters and more than 100,000 units currently under the utility’s control, Connett knows whereof he speaks. That extensive history with demand response is what led Great River to initiate the study on the storage potential of the common household appliance.
When the Department of Energy was revamping its efficiency standards, Congress was set to ban electric resistance water heaters with a storage capacity of more than 55 gallons. Great River worked tirelessly to overturn the ban, and the Energy Efficiency Improvement Act of 2015 ultimately included an exception for large water heaters.
“But that experience made us realize that we had work to do to make utilities understand how important this appliance is to their load management strategies,” recalled Connett. “It is even more so, now that we are being asked to integrate more variable resources into the power mix.”
Showing how it’s done
The long fight to save large water heaters also attracted the attention of the NRDC, an unlikely ally, Connett acknowledges. However, the utility and the environmentalists found common ground in the innovative use of water heaters to “store” renewable energy. The NRDC joined Great River, NRECA and PLMA to commission a study by the Brattle Group economic consultants.
The six-month study evaluated several strategies familiar to Great River, using two types of water heaters—electric resistance and heat pump units—both of which the utility has on control programs. The electric thermal storage strategy involves heating water at night when electricity is cheaper. “And becoming greener over time,” added Connett. “As Minnesota moves closer to its 2025 goal of 25 percent renewables the percentage of green energy in the night time hours only increases.”
Peak shaving is another strategy, which curtails load during times of high demand on a limited number of days per year, usually in four- to eight-hour cycles. Great River has about 45,000 water heaters on its peak shaving program and 66,000 on the thermal storage program. “That’s 20 percent of all the water heaters on our system. How many utilities can say that?” Connett asked.
The study also looked at fast response, a way to provide balancing services in the form of quick load increases and decreases. “This strategy will be tremendously useful as utilities bring more variable generation onto their systems,” said Connett.
The Hidden Battery: Opportunities in Electric Water Heating, (pdf) the report resulting from the study, reinforced what Great River had already learned from years of water heater control. Depending on market conditions, the Brattle research shows that storage-enabled water heating could save the consumer as much as $200 annually. Based on that figure, payback for the appliance, associated control equipment and installation is five years.
The environmental benefits are significant too, as policy—and consumers—increasingly focus on clean energy and energy efficiency. Controlling water heaters not only saves homeowners money, but it reduces carbon dioxide emissions with the right power mix. As Connett noted, being able to shift electricity use to lower-cost generation in off-peak hours can increase the use of renewable resources like wind.
These findings were not so much a revelation as confirmation for Connett. “That validation was pretty exciting,” he admitted. “And now that storage is becoming more important to integrate variable generation, we will continue to move forward with our proven programs.”
Initiative to spread word
Shortly after the release of the report this January, the partnership behind it launched the National Community Storage Initiative to focus attention on opportunities to develop national, regional and local markets for electric storage technologies. American Public Power Association and Edison Electric Institute have added their endorsement to the initiative, too.
Similar to community solar projects, such programs would aggregate controlled residential appliances to build local energy-storage capability. In addition to giving utilities better control of their loads, these fleets could also potentially provide ancillary services. Connett noted that the new generation of “grid interactive water heaters” can be controlled over very short time intervals with nearly instantaneous response. “The market is driving manufacturers to develop smarter water heaters,” he said. “Utilities want more dynamic control, and manufactures are enabling that with Wi-Fi and global technology.”
Water heaters are not the only existing appliances that offer energy storage potential. Great River Energy also controls about 167,000 air conditioners and has 15,000 ceramic-block, electric thermal storage heaters on its system that could contribute storage capacity. “But the beauty of the water heater is that it is a year-round load,” Connett observed.
More smart appliances are in the pipeline, such as electric vehicles and the Power Wall. “There are plenty of opportunities coming up, but we don’t need to wait for new technology,” Connett said. “The water heater is here now, and this type of program is made for co-ops—it is collaborative, economical and innovative. It helps everyone on the system.”