Flexibility is and will continue to be necessary for the cost-efficient and safe operation and balancing of European power systems. Indeed, the need for flexibility is increasing. The EU aims to better utilise demand flexibility to help reduce grid investments and increase security of supply. Electric storage water heaters (ESWH) are highly flexible electrical appliances with the potential to be used in almost all buildings. They can therefore provide demand flexibility for distribution grids where alternative sources of flexibility are limited.
We have analyzed the value of flexibility from ESWHs, i.e. the value that may be lost if ecodesign regulation prohibits the use of such water heaters. Our analysis shows that the value of individual flexibility services ranges from 8 to almost 500 €/kW/year, depending on the type of flexibility that is needed.
Electric storage water heaters in Europe represent a flexible capacity of more than 20 GW
We have estimated the total storage capacity of electric water heaters in Europe at more than 120 GWh per day, and the daily flexibility capacity at 20 GW. This represents a significant source of potential flexibility, comparable to one-third of French nuclear generation capacity or the entire generation capacity of the Czech Republic.
Water heaters can provide a range of flexibility services
Electric storage water heaters can provide flexibility services in different markets and for different uses, from fast response to load shifting whether locally or at the system level. ESWHs have several attractive flexibility characteristics:
- Storage in the hot water tank implies that the electricity load can be shifted without comfort loss for the consumer
- They are highly distributed, implying that they can provide local flexibility in areas with few alternative sources of flexibility
- They can respond quickly, automatically and cheaply
- The investment costs are minimal, as they are already installed
- The required control and management technologies have been demonstrated and proven in many contexts
The flexibility can be used for several system purposes
- Within the individual building (behind the fuse), ESWHs can interact with EVs and solar panels, for example, and thereby contribute to better utilisation of local generation and even out load variations
- In the distribution grid, the flexibility can be used to maintain voltage levels or manage congestion or critical situations as an alternative to grid investments
- In system operation, the flexibility can be used in frequency control and to balance supply and demand. The flexibility from ESWHs has already been used in system operation for decades in countries such as France, Finland and Switzerland.
The value depends on the cost of alternatives
ESWHs are not the only source of system flexibility. The value of the flexibility they can provide depends on the type of flexibility that is needed and the cost of alternative flexibility solutions. Since water heaters are already widely installed, their incremental costs are low compared to other sources of flexibility such as distributed grid batteries, local generation, the interruption of loads or reserve capacity
Based on alternative costs and market prices, we have estimated the value of ESWH flexibility at between 8 and 500 €/kW/year. These are values for individual flexibility services, but ESWHs can provide several different types of flexibility services covering different areas over the course of a year.
Even though the estimates are uncertain, there is little doubt that both the need for flexibility and the costs of alternatives are set to increase. We expect that flexibility from several sources will be needed to meet system needs and keep costs down.
The context for the report is the ongoing revision of Ecodesign regulation 814/2013. The strict energy efficiency requirements in the Ecodesign regulation have already reduced the flexibility potential from large ESWHs. The stricter requirements that are currently being considered threaten to outlaw electrical water heaters that are in widespread use in Europe and that represent a significant source of potential flexibility.
The report was commissioned by the Norwegian Water Resources and Energy Directorate.