Hot water could prove to be an important tool to help power grid operators stay out of hot water.

A study released this week found that using the electric water heaters in more than 50 million U.S. homes as thermal batteries could save consumers money, reduce carbon dioxide emissions, increase grid operators' ability to accept power from intermittent renewable sources, and help grid operators regulate voltage and frequency.

The study, titled, "The Hidden Battery - Opportunities in Electric Water Heating," was prepared by The Brattle Group, a global consulting firm with expertise in economics, finance, regulation, competition and energy. It was released to announce the launch of an initiative, called "Community Storage," to aggregate the storage capacity of things that are or will be behind consumers' electric meters, ranging from water heaters to electric vehicles and storage systems such as Tesla's Powerwalls. 

The initiative is an effort of the National Rural Electric Cooperative Association, the National Resources Defense Council, the Peak Load Management Alliance and Great River Energy, an electric generation and transmission cooperative serving about 1.7 million people in Minnesota. It is open to any entity that wants to participate in it.

"The intent is to make a welcoming organization that encourages everyone to look at and exchange ideas," said Robin Roy, the director of building energy efficiency and clean energy strategy for the NRDC.

Electric co-ops have been controlling their customers' water heaters to reduce demand at peak times for decades, noted Keith Dennis, NRECA's senior principal for end-use solutions and standards.

Great River Energy, for example, has a program in which it controls 65,000 large-volume water heaters so they only use power from 11 p.m. to 7 a.m., which is when electricity is cheapest. It also has a program in which it controls 45,000 smaller water heaters only on peak demand days for about three to five hours.

Now electric utilities are testing technologies that would enable them to control water heaters so that they could be used to provide such ancillary services as frequency and voltage stabilization.

Beyond helping grid operators, all these uses of water heaters could save consumers money and help the environment.

The Battle Group found that the net benefits of these multiple uses could approach $200 per year for an individual water-heater owner in some conditions. A caveat is that the owner's system operator would have to allow him or her to sell ancillary services, either directly or indirectly.

The Battle Group also found that an 80-gallon electric resistance water heater being controlled in a thermal-storage program would generate around 30 percent less carbon dioxide than an uncontrolled 50-gallon electric resistance water heater.

Electric water heaters are more common in some areas of the country than others - rural and other areas where homes don't use gas or oil heat. Still, the Battle Group said they are in more than 40 percent of U.S. households and account for 9 percent of all household electricity consumption, placing them third behind space cooling, which accounts for 13 percent, and lighting, which accounts for 11 percent.

Using water heaters for ancillary grid services, and improving their ability to be used for the types of programs run by Great River Energy, will take some new technologies. Fortunately, those technologies seem to be coming to market.

For example, electric water heaters typically have two heating elements - one at the top of the tank and one at the bottom. A company called Sequentric Energy Systems has designed a water heater with three elements that can keep the water at the top of its tank hot, while allowing the grid manager to control the element at the bottom of its tank, where the water is usually cold. That allows the grid manager to aggregate the Sequentric water heaters in its territory and use them for frequency regulation.

Consumers don't get the money from the grid operator directly. Instead, Sequentric is working with a company that leases water heaters to consumers and charges them less if they let it allow the grid operator to control the water heaters.

"Once you aggregate enough of them, it becomes hugely valuable to the power grid," said Dan Flohr, Sequentric's CEO.

Direct Energy, a retail provider of electricity, natural gas and home services, deployed Sequentric-designed water heaters in a test that began in late 2014 and continued through the middle of last year. The water heaters were deployed in Houston, Pittsburgh and the part of Tennessee served by the Tennessee Valley Authority.

http://www.energybiz.com/article/16/02/water-heaters-hidden-battery