Smart Energy Use

BPA report details potential for water heaters as DR tools

A recent report from the Bonneville Power Administration identifies the potential to enhance the use of water heaters as a demand response tool.

The report is the result of a program that studied a particular control technology, CTA-2045, that would enable utilities to load shift excess wind or solar power and store it as thermal energy in water heaters.

The report said that traditional water heater control methods are only marginally cost effective because of the relatively high cost of implementation, but the more cost-effective CTA-2045 technology increases the demand response potential from water heaters to 1,200 MW. Assuming a 26.5% customer enrollment level, the BPA report found that using CT-2045 technology with water heaters could create a “conservative resource opportunity” of 301 MW of demand response potential in Oregon and Washington by 2039.

The report also found that “smart connected” water heaters could yield “significant cost savings compared to building peaking plants.”

While the program studied conditions in the Pacific Northwest, the report said that the findings apply to other regions of the United States.

The water heater project began in 2015 as a joint proposal by BPA and investor-owned Portland General Electric with funding from BPA’s Technology Innovation Program. The report from the water heater project was published in November.

The aim of the water heater pilot project was to create a market transformation plan that would “put the Pacific Northwest on a path to make hot water heating load shifting simple for customers without affecting their lifestyle,” BPA said in the report.

The CTA-2045 technology highlighted in the report is a communication interface comparable in concept to a USB socket, which can be found on many computers, smart phones and other digital devices, but the CTA-2045 socket is specifically designed for appliances.

Although the CTA-2045 technology can interface with a variety of communication protocols devices, the water heater program used a FM radio technology because BPA and its partners were familiar with the technology, it is low cost and it accommodates privacy sensitive customers who do not want appliance-specific usage information leaving the home.

One of the steps the report lays out to achieve a market transformation that would realize the demand response potential of water heaters is a call for all electric water heaters with a capacity of 40 gallons or greater shipped to the Pacific Northwest to have an open-source communication interface, i.e., CTA-2045.

The report also identifies several market barriers to adoption of its goals and recommendations. Water heaters generally last for 15 years before replacement, which means that a generalized marketing campaign would be “largely meaningless to all but a small segment of the population faced with a replacement decision,” the report found.

Consumers also have concerns about privacy, security, and performance, particularly with regard to water heaters “since they are largely invisible to the end-consumer.” Consumers also have concerns about cyber security, but the report says the “CTA-2045 socket approach is the robust solution to security.”

In its conclusions, the report says that “market opportunities alone are unlikely to drive the water heating market to add ‘grid-enabled controls’ to products without external intervention.”

Improving grid efficiency is generally beyond the scope of any single market actor, the report noted. In addition, at the point of purchase there are no obvious economic benefits to buying a water heater with a demand response socket. And, as the report notes, “manufacturers have little interest in adding features and subsequent costs to products for which the customer will not pay.”

As a result, BPA says “direct intervention that provides financial incentives to consumers, utilities, and/or appliance manufacturers will likely be necessary” to overcome the existing market barriers.

Among other things, the report recommends the formation of a coalition across a broad group of utilities, manufacturers, regulators, aggregators and customer advocacy groups in order to develop an action-oriented plan for a scaled roll-out of “smart-connected” water heaters that manufacturers can support.

Additional details, including the report, are available here.