Can hot water help us get out of hot water?
This guest blog is authored by Dr Gabrielle Kuiper, a strategic energy, sustainability and climate change professional with over twenty years’ experience in the corporate world, government and non-government organisations and academia. What’s your favourite distributed energy resource (DER)? Solar looks like the obvious choice followed by batteries and heat pumps, however a surprising number of energy experts champion the low-tech option of household hot water systems. Household hot water with ‘ripple’ control is the original DER, having been used since the 1950s to soak up abundant overnight electricity when coal plants were much harder to ramp up and down. The origins of ‘baseload’ are largely in this created overnight demand which is between one quarter and one third of residential energy consumption.
Ripple control works by sending a high-frequency signal (492, 750 or 1050 Hz) on the standard 50 Hz mains power to tell the receiving device to switch on or off. Ripple controlled hot water is typically on a second meter or a second element of a meter specifically for ‘controlled load’ and so charged a different rate to the rest of the variable household load.
Today’s cutting edge hot water technology is heat pump water heaters which are three- to five-times more efficient than electric resistance hot water systems (HWS). While heat pump HWS are more expensive to purchase, their high efficiency makes them cheaper overall and greatly reduces any GHG emissions from fossil electricity. Also efficient is solar hot water which comes in many forms, including evacuated tubes.
There is increasing international focus on the role of hot water in the energy transition. The Regulatory Assistance Project (RAP) calculated in 2017 that a grid-interactive electric water heat in the United States could create USD$3.6billion/year in benefits.
In 2023, research from the University of Technology (UTS), Sydney on the electrification of domestic hot water in Australia found the following savings across four scenarios with different levels of take up of electric heat pump and flexible hot water:
Highly flexible – Savings of AUD$6.7 billion from reduced gas and electricity use by 2040; plus $14.3 billion in avoided grid storage costs.
Highly efficient – Savings of AUD$4.7 billion from reduced gas and electricity use by 2040; plus $10.1 billion in avoided grid storage costs.
Rapid electrification – Savings of AUD$4.7 billion from reduced gas and electricity use by 2040; plus $13.1 billion in avoided grid storage costs.
BAU – No savings in energy use; AUD$5.4 billion in avoided grid storage costs.
The UTS report acknowledged these savings are partial, without accounting for additional system benefits, such as “increased ease of managing voltage, increased efficacy of emergency frequency control schemes, and higher likelihood of having a stable load for system restart services to successfully enable grid operation after a system outage” or those resulting from increasing minimum demand that are difficult to quantify.
Under the rapid electrification scenario, flexible domestic hot water would total 22GW/45GWh/day of flexible demand – equivalent to more than two-thirds of peak demand in the Australian National Electricity Market.
These numbers show how it is important not only to electrify gas appliances, but to do so in a smart way, making the most of current and emerging technology. A colleague recently bought a heat pump hot water system and was frustrated that it didn’t have any smart controls. A few months later she realised there was an additional plate screwed onto her system. Undoing the screws, she found a timer! Given the upfront cost of heat pump hot water systems, it is important they are operated in a way that maximises the return on investment for households, by using electricity when it’s cheapest.
These numbers show how it is important not only to electrify gas appliances, but to do so in a smart way, making the most of current and emerging technology. A colleague recently bought a heat pump hot water system and was frustrated that it didn’t have any smart controls. A few months later she realised there was an additional plate screwed onto her system. Undoing the screws, she found a timer! Given the upfront cost of heat pump hot water systems, it is important they are operated in a way that maximises the return on investment for households, by using electricity when it’s cheapest.
There are two basic scenarios for making the most of heat pump hot water. For households with rooftop solar, that electricity generated behind-the-meter can be diverted to the hot water system.
Research by Baran Yildiz and colleagues at the University of New South Wales have shown that on average Australian households use 6 kWh of energy for 142 L of hot water daily. Back in 2021, they modelled that with standard inefficient hot water technology and a small 4.5 kW rooftop solar system, excess solar generation could provide half (48%) of daily hot water heating for a typical working family, equivalent to a 28% increase in PV self-consumption. The average rooftop solar system sold in Australia is now over 9kW and with a heat pump hot water system, the rooftop solar could provide all the hot water heating for a smaller increase in self-consumption.
This is in fact happening as electricians take hot water off controlled load settings and hook hot water systems up to general supply when they are installing rooftop solar. In doing so, put in a diverter/relay and a timer which directs the solar generated electricity to the hot water system in the middle of the day. Essentially this treats a home hot water system like a battery, storing heat in hot water until it is needed.
This image features in the IEEFA report The Big Shift: How smart hot water can lighten the load for consumers and grid
As a result of these changes, in South Australia, up to a quarter of controlled load hot water is inactive. In NSW, it’s about 15-20%. If these hot water systems are using abundant solar during the day, then everyone benefits.
The same can be true for households without solar or in parts of the world where solar isn’t as abundant in the middle of the day. In these instances it is when wholesale prices are low or negative that distribution businesses can offer lower prices to consumers or even make payments to them, as is already happening in some parts of the world. In Hawaii and Nova Scotia, Shifted Energy has created a Virtual Power Plan using cellular-connected smart hot water systems where families earn about USD$3/month in utility bill savings for allowing their hot water system to be turned on and off to help balance the grid. As RAP highlights, it is important flexibility is inclusive – enabled in low income and vulnerable homes first. Hot water tanks plus smart controls is one relatively cheap way to action this. For example, EnergyCloud in Ireland offers free hot water for social housing tenants when there is a surplus of wind-generated electricity.
There are a range of considerations in making the most of the combination of solar and household hot water, including ensuring that the electric hot water systems being installed meet minimum energy efficiency standards and their installations are monitored through compliance and enforcement regimes.
Getting the details right on home hot water systems will unlock a huge flexible resource that will lower the costs of the energy transition for everyone. Climate change is heating up the planet leading to more frequent and intense heatwaves, droughts, floods, fires and storms. The oldest DER will have a large role to play in helping get humanity out of hot water.
