Getting into Hot Water at a Utility

October 12, 2016

An example heat pump water heater and an airy bathroom. Source:

The electricity industry is going through a transformation unlike anything since the days of Edison, Insull, Westinghouse, Tesla (the man, not the car).  With increasing sources of supply (e.g., Solar PV, storage), loads creating non-conventional demand (e.g., EVs, storage), and controls managing electricity flows, it is a fascinating time to be learning about and working in the electricity industry.  Having worked in the industry for years as an engineer, consultant, and researcher, I have had the opportunity to learn about, analyze, and offer recommendations and insights.  But, it was not until this summer when I had the opportunity to work for an organization that is responsible for actually providing electricity.

In the summer of 2016, I worked at PG&E in their energy efficiency strategy and policy group.  I learned a ton of things, many of which were unexpected.  Some of them technical, others policy oriented, and others were simply that the company is full of very smart, well-intentioned people.  In the face of the many challenging dynamics it faces, there are many proactive steps being taken.

One of the projects I worked on was related to heat pump water heaters (HPWH).  These can simply be thought of as using an air conditioner, running in reverse, to heat water.  They are able to draw energy (i.e. heat) from the surrounding air, which allows them to have efficiencies that can be higher than 1.0 (magic!).  These devices offer an opportunity to switch from gas water heating (90% of California’s source of hot water) to electric water heating.  With increasing rates of renewable penetration onto the electric grid, a major benefit of this is that we as a state will have a cleaner grid, but it comes with the increased risk that there will be periods of over-generation (i.e. when supply exceeds demand).

A number of other institutions[1],[2],[3],[4],[5],[6],[7],[8] have examined HPWHs as a means of both decarbonizing the grid and offering more grid flexibility. The flexibility that is offered comes by allowing for load shifting, since water does not need to be heated at the same time that it is being used.  Thus there is an opportunity to heat water at times when power is cheap and these tanks can be then thought of as a “battery” for hot water.

The study I undertook was examining the net energy, environmental, and economics impacts of a HPWH under different control scenarios (i.e. controlled by the customer or by the grid operator) and different rate structures.  While the technology is emerging, it was an interesting result to find that under certain assumptions, HPWH could offer net benefits across all three metrics.

Overall, it was great to experience the industry inside of a firm that not only has to conduct analysis and plan, but also keep the lights on every hour of the year.  This complex task is something that takes expertise.  Having a chance to examine a technology that has potential to have significant demand-side and grid-side implication was really exciting.  I look forward to see how HPWHs, and other technologies, will be used to solve the increasingly complex challenges ahead.

[1] Steven Nadel, Comparative Energy Use of Residential Gas Furnaces and Electric Heat Pumps. ACEEE. Report. 5/16.

[2] Eric Rehberg, Grid Interactive Water Heater Pilot Demonstration in Oahu, Hawaii. Battelle. Presentation. 2/15.

[3] Ryan Hledik, Judy Chang, Roger Lueken, The Hidden Battery. The Brattle Group (for NRECA, NRDC, PLMA). Report. 1/16.

[4] Jim Lazar, Teaching the Duck to Fly Verson 2. RAP. Report. 2/16.

[5] Paul Steffes, Grid-Interactive Renewable Water Heating: Analysis of the Economic and Environmental Value. Steffes Corporation. Report. 1/00.

[6] AL Cooke et al, Analysis of Large-Capacity Water Heaters in Electric Thermal Storage Programs. PNNL. Report. 3/15.

[7] Power Shift Atlantic. Natural Resources Canada. Website. 1/00.

[8] Johanna L. Mathieu, Mark Dyson, and Duncan S. Callaway, Using Residential Electric Loads for Fast Demand Response: The Potential Resource and Revenues, the Costs, and Policy Recommendations. ACEEE Summer Study 2012. Conference Paper. 8/12.