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Law Loosens an Efficiency Standard But Boosts Grid Stability

Legislation that went into effect last month allows some low-efficiency water heaters to be sold—for good reason

3 min read
Law Loosens an Efficiency Standard But Boosts Grid Stability
Photo: iStockphoto

The Energy Improvement Act of 2015, which went into effect last month, brought a change that might seem incongruous with the name of the legislation. You see, it loosened  the U.S. Department of Energy’s newest energy-efficiency standards for electric waters heaters, which came into force just this past April.

The DOE standards had called for large electric waters heaters—ones with a capacity in excess of 210 liters—to meet very stringent efficiency ratings, ones that would in practice require them to use heat pumps rather than simple electrical-resistance heating elements. The new law relaxes that requirement and allows some very large (in excess of 285 L) water heaters to be sold even though they warm water the old-fashioned way, with simple resistance heating elements.

So what gives? Was Congress unduly influenced by a bunch of K Street lobbyists working for entrenched interests in the water-heater industry?

No, there’s nothing untoward going on here. But what happened to cause this reversal in the rules is nevertheless interesting. The story goes like this: Back in 2010, the U.S. government formulated regulations to improve the efficiency of many types of appliances, including electric water heaters. The new standards were slated to go into effect in April of 2015.

This seemed a good idea, at least on the surface. But according to Harshal Upadhye of the Electric Power Research Institute, the regulators involved didn’t appreciate that electric utility companies were keen to use people’s electric water heaters for load management, switching them off remotely to reduce power demand when needed. A water heater is a perfect load to use in this way, because it can store energy in the form of hot water for long periods. It’s sort of like having a big wet battery connected to the electric grid.

Upadhye explains that this strategy has been used in some places as far back as the 1960s and 1970s, when utility companies struggled to deal with the fundamental mismatch between the preferably steady output of coal and nuclear plants and the large variation in daily demand.

imgPhoto: Vaughn Thermal Corp.

Such mismatches between supply and demand are especially severe nowadays with many regions having considerable amounts of highly variable solar and wind power pouring onto the grid. So having an opportunity to reduce energy demand when power is scarce and soak up energy when power is cheap is extremely valuable to electric utilities.

“The benefits are tremendous,” says Upadhye, who notes that Great River Energy, a consumer-owned electric cooperative in Minnesota, among others, has for some time now been controlling its customers’ electric water heaters as well as certain other loads to avoid having to purchase power during the day when prices peak. By buying energy at night—when there’s lots of wind power available to the grid in this Midwestern locale, and using that to heat water for later use—Great River Energy saves its members money.

This utility company, and others like it, has been using FM transmissions to send control signals to people’s water heaters, says Upadhye, but the industry is slowly moving toward Internet connectivity for this purpose, because it allows much finer-grain control of whose water heaters to switch on or off. Internet-based controls also afford the possibility of using water heaters to adjust electricity demand second by second. That can help stabilize the frequency of the grid, which shifts when generation and use get out of balance.

The law makes it illegal to “unlock” a grid-enabled water heater so that it can be used without being part of a demand-management or thermal-energy storage program

In 2011, shortly after the new appliance-efficiency regulations were formulated, interested parties in the electric power industry realized that the upcoming rules would make it hard for them to use large-capacity electric water heaters for demand management or grid stabilization. The Department of Energy was sympathetic and issued a call for public input in 2012 in hopes of revising the regulations it had formulated a year earlier. It wanted to change the regulations so that large-capacity “grid-interactive water heaters” could be sold even though they didn’t meet the more stringent efficiency requirements in the works.

This might seem a simple correction for regulators to make, but the effort was stalled by legal requirements put in place to prevent environmental rules from backsliding, explains Upadhye. Those interested in this method of demand management were thus forced to pursue a new law, the one that went into effect last month.

That legislation now allows large-capacity electric water heaters to be sold, despite their inefficiency compared to the heat-pump type. But there are provisions to ensure that most, if not all, of those water heaters are used in laudable ways.

For example, it makes it illegal to “unlock” a grid-enabled water heater so that it can be used without being part of a demand-management or thermal-energy storage program. And the government can still bar the sale of such water heaters if it determines that the number of them being sold is 15 or more percent greater than the number of them involved in the kinds of programs they were designed for.

So the lesson should be clear. Jailbreak your iPhone if you want, but don’t jailbreak your grid-interactive water heater or you’ll make it bad for everybody.

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