Low-cost energy storage for power grid can be found in your basement, study says

The least-expensive battery to store energy from the electric power grid may be sitting in homeowners' basements — the electric water heater.

That is the surprising finding of research released Wednesday by the cooperative power industry, including Maple Grove-based Great River Energy, and an environmental group.

Customers at many utilities already save money by heating water at night, taking advantage of low, off-peak electric rates. It requires a special electric water heater that holds a day's worth of household water, but offers long-term savings.

Now, a study by the Brattle Group, an economic consulting firm, says that the nation's 50 million residential electric water heaters can address bigger challenges on the power grid, such as storing intermittent renewable energy from wind farms and solar arrays.

Using advanced controls, for example, utilities could turn on insulated water heaters as wind turbines are spinning or the sun is energizing solar panels — and hit the off switch when renewable energy wanes. The study said various smart technologies focused on water heaters offer significant energy savings and environmental benefits because 9 percent of U.S. household electricity is used to heat water.

"Somehow or other this water heater in the basement has been forgotten and not often mentioned when you talk about smart appliances," said Gary Connett, director of member services at Great River Energy, a wholesale power cooperative that serves 660,000 customers in 28 local co-ops in Minnesota.

Connett, speaking on a conference call about the study, said a water heater is the only appliance in the household that can store energy. At the local co-ops served by Great River Energy, 110,000 water heaters already are controlled in some way, mostly in overnight storage programs, he said. That represents 17 percent of the co-ops' customers.

Connett and other industry officials who advocate expanding these programs call the concept "community storage." The phrase is borrowed from the solar industry which calls its shared-solar programs "community solar." But industry officials didn't say what share of U.S. households they hope to reach.

Electric water heaters often are installed in rural areas where natural gas isn't available. Electric customers in most urban areas have gas service offering lower-cost hot water. Xcel Energy, Minnesota's largest power company whose 1.2 million electric customers include Twin Cities residents, has just 608 customers using the off-peak overnight rate and not all of them use it for hot water storage.

The Brattle study, called "The Hidden Battery," was done for the National Rural Electric Cooperative Association, the Natural Resources Defense Council and the Peak Load Management Alliance, a group that promotes reducing electric demand rather than building new power plants. Great River Energy also helped with the study.

Unlike grid-scale battery storage, where high cost remains a challenge, the study found that the net benefits of water heater-based storage, demand-reduction or other technologies could approach $200 annually per participant.

The water heaters and control equipment carry extra costs, ranging from $100 to $500, but the expense is offset by savings, the study found.

Customers who participate in such programs probably won't have to endure cold showers. Brattle studied what happens when utilities turn off a customer's water heater during periods of peak power demand. Its modeling found that a 50-gallon tank could be interrupted for up to four hours with little risk of running out of hot water.

David Shaffer • 612-673-7090 • @ShafferStrib