Credit: Great River Energy
Great River Energy Member Services Director  Gary Connett.

The much publicized Tesla Powerwall battery offers a way for homeowners with solar panels to store their energy for use at night as well as help utilities manage the grid.

Yet a decidedly less flashy piece of equipment residing in basements and closets of homeowners holds much greater potential as a residential battery – electric water heaters.

For the past 30 years Great River Energy (GRE) has deployed electric water heaters in homes to manage loads. Today more than 110,000 homes – around 20 percent of its to customer base – have water heaters that collectively, according to the utility, amount to a gigawatt of storage.

GRE’s approach is finally receiving broader recognition as the Community Storage Initiative (CSI), a new national effort, ramps up to push for greater use of water heaters and electric vehicles for storage.

The initiative has received support from Duke Energy, several Minnesota cooperatives and other co-ops in Wisconsin, Pennsylvania and other states. Organizations involved include several major national associations, the Edison Electric Institute (EEI), the Natural Resources Defense Council (NRDC), Peak Load Management Alliance (PLMA) and the Rocky Mountain Institute.

Chairing the initiative is Great River Energy member services director Gary Connett, a veteran of the co-op’s water heater storage program and evangelist for community storage.

Along with a push for more community storage, the CSI released a study by the Brattle Group which showed water heaters consume on average 15 percent of household energy use.

Consumers can save money and reduce carbon dioxide emissions by 30 percent by using water heaters as a “thermal battery.” The study also revealed that emissions drop to 50 percent by deploying heat pump water heaters.

Connett spoke to Midwest Energy News about the CSI and GRE’s long standing behind-the-meter program that offers members rebates and deals to buy water heaters.

Midwest Energy News: Why is community storage important?

Connett: There’s a renewed interest in the load side of the business. We didn’t pay much attention to the load in the past but today we need to. Everyone is searching for the magic battery, from academia to researchers to the (utility) industry itself. But one could consider the water heater in everyone’s home as a battery.

How so? It’s hard for me to get my head around the water heater as a big Duracell in my basement. 

It’s not a battery in the sense of what we think of as a battery. But the grid sees water heaters as batteries because they absorb energy in the night time hours when energy is abundant because the demand curve has dipped. At night is when we charge water heaters.

How much energy do they store?

Each water heater absorbs 13 to 14 kilowatt hours (kWh) of energy every night. The next day that water heater is discharging energy in the form of hot water, not in the form of electricity. At Great River Energy we store a gigawatt of power every night in water heaters.

Are they typical water heaters?

No. The water heaters we use are large volume, large capacity, collective resistance water heaters. They’re going to be 85 to 100 gallons in size, which is far larger than a normal water heater in someone’s home. We have the storage capacity to get customers through a long period of time without any energy being applied to their water heaters.

How does that work?

We charge water heaters from 11 p.m. to 7 a.m. For the remaining 16 hours of the day they no longer receive energy. There’s enough hot water to get the homeowners through the next day. There are times during the night when energy on the grid is free, or negative in price. We can heat water at an extremely low cost.

What if a customer has natural gas?

They can’t participate in the program. But we’re finding in new homes that having a natural gas water heater is quite expensive. You need an exhaust vent and an intake vent.  In some cases new homes are choosing electric (water heaters) because they require two less penetrations in the walls and roofs. It’s a simple installation for contractors.

Green building advocates always talk about on-demand water heaters. How do these compare with them?

On-demand gas and electric water heaters don’t start until you turn them on so there’s no standby losses. With on-demand there is going to be huge demand for hot water at supper time – and if everybody had on-demand electric water heaters on at the same times we have a problem. We don’t want all that demand at supper time or we’re going to end up having to build additional peaking plants.

Why not just get a Tesla Powerwall and do the same thing?

Batteries like that are 10 times as expensive as a water heater. The Tesla stores around seven kWh, our heaters store almost twice that. We think of water heater storage as an arbitrage – we’re buying energy in the middle of the night when it’s really cheap and our members are using (water) during higher cost periods of the day. Telsa’s putting electricity back on the grid, we’re putting hot water in people’s homes.

What impact do the heaters have on power sources? Doesn’t wind blow better at night?

Electric utilities around the country and around the world are getting more of what we call variable or intermittent generation resources, those being mainly wind and solar. There’s an abundance of wind energy available during the night and because of that over time these water heaters become cleaner and greener because they’re using more renewable energy.

Minnesota has a strong renewable energy standard. How do water heaters impact that?

Water heaters have become a strategy of ours for meeting renewable energy standards. Having a battery to store that energy during the night becomes critical, becomes strategic. There’s a boatload of renewable energy that’s not being used now. Let’s find a way to use it, or store it – and water heaters are perfect for that.

Great River Energy has been a big advocate of electric cars. How do they fit into the community storage concept?

The challenge with electric vehicles is we want to charge them exclusively in the middle of the night if possible. We have programs today that encourage that. The charge comes on at 11 p.m. and stops at 7 a.m., just like the water heaters.

What if they charge at a different time?

Some electric vehicle owners want to charge after work so they can run errands at night. We’re developing a time-of-use rate – if you want to charge over the supper hour the price will indicate that that’s an expensive time. We’re not going to stop you from doing it, you’re just going to pay so we can recover our costs associated with that time period.

What happens when more solar comes online?  

What we’re seeing in Hawaii and California is a “duck curve,” with solar panels serving customer loads in the middle of the afternoon rather than utilities. When you graph it out it looks like a duck’s outline. Then demand rises around suppertime. It’s interesting because the load curve was once handled exclusively by utilities, all day long, but now some California utilities have off peak hours in the middle of the afternoon.

So you could charge the heaters in the middle of the afternoon?

We could. We’re just looking for the proper time period. Traditionally that’s been the middle of the night but as more and more photovoltaics come into the equation those hours may be something different. The control technology is far more responsive and dynamic than it used to be. We can engage and disengage these water heaters fairly fast.

Could capital investments be deferred by improved load management of this sort?

It certainly could defer new generation. And with water heaters the potential is that we could defer a transmission or a distribution line with these sort of technologies.

Why the interest now in community storage?

Our generation resources up until now have been staid and true – we turn them on and they’re on. What utilities are struggling with is if we have variable resources in our future, like wind and solar, is there a better way to manage our load, to accommodate the variability of these generation resources? Traditionally we have managed the generation to meet the mode. Now we’re going to manage the mode to the meet the generation. That’s a paradigm shift for utilities.


Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.

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