What Connects Heating with Renewable Power and EVs?


On the face of it, there aren’t obvious connections between domestic heating, renewable power and electric vehicles (EVs), particularly if heating isn’t electric. Dig a little deeper though and some surprising possibilities start to emerge.

Before I illustrate these possibilities with a few examples, it’s worth a reminder of the importance of heating in some markets; particularly cool, northern climates such as here in the UK.  We’re kept unusually warm for our latitude, thanks to the Gulf Stream, so are by no means the coldest of these northern markets. Nevertheless we consume almost three times as much energy each year for heating (of spaces and water) as we do electricity. So heating is not just a big part of the energy mix, it’s also a crucial component of any long-term decarbonisation strategy.

From a demand perspective, heat should not be particularly time sensitive, particularly water heating (where this involves storing hot water in a tank, prior to usage). Given decent insulation, water can be heated several hours ahead of when it might actually be needed. In older housing stock, insulation may not be sufficient to say the same of space heating. However in renovated or newly built dwellings, particularly “Net Zero” homes, comprehensive insulation means that low-temperature, time-flexible heat from heat pumps is an efficient solution.

So what could any of that have to do with either electric vehicles or renewable power?

 

Grid-integrated Water Heating (GIWH)

Trialled as far back as 2014 in Hawaii, GIWH is seeing increasing interest in markets where electric water heating means that it provides a potentially large, but non-time-sensitive electric load – markets like the US for example.

In Hawaii, one specific reason for interest in GIWH was as a means to absorb domestic rooftop PV generation during sunny days and thus avoid problems when feeding large amounts of this energy into capacity-constrained local grid networks. Instead, excess solar energy could be used to heat water instead. In other markets, the availability of plentiful wind power could be an equally compelling driver, particularly where this coincides with otherwise weak demand (for example overnight) and might lead to curtailment.

Heating at times of excess electricity supply also means there’s reduced need to do so at times of highest demand, potentially shaving expensive-to-supply peaks. The use of electric heating to contribute to short-timeframe grid ancillary services has also been trialled.

Whatever the reason to use it, the fact is that GIWH or “smart electric heating” provides a source of fast-responding, flexible load – just the kind of thing that is helpful in integrating large proportions of variable renewable supply into a power system. Remarkably, some observers estimate that control of residential water heating could help integrate “up to 100,000 MW of additional variable wind and solar energy in the US”.

 

Aggregated domestic heating as part of a Virtual Power Plant (VPP)

Rather than having a utility or system operator deal with controlling thousands (or more) domestic energy systems, some markets allow the existence of third parties called “aggregators”. These are firms who contract to control multiple small energy systems and then combine them together such that, to a system operator, they look like a single large one (a “virtual power plant”). This can be helpful in monetising distributed resources, particularly if contracts for valuable ancillary or balancing services are only available to system components above a certain scale.

Aggregation can involve the output from distributed PV or other generators, the charging and discharging of behind-the-meter battery storage, the response of flexible loads such as heating or refrigeration; or a combination of all of these.

Vcharge is one example of a company involved in the market for what they term “transactive load”: distributed electric loads coupled to energy storage and capable of intelligent response to changing grid and market conditions. These transactive loads can include electric storage heaters and hot water heaters, as well as ice-based air conditioning and electric vehicles. By generating revenue from grid operators through the intelligent control of such assets, savings can be offered on the energy that consumers buy to power them. As well as selling new smart storage heaters and retrofitting smart controllers to older ones in North America, Vcharge are developing opportunities in other markets with significant electric heating load; including Ireland, the UK and Germany.

While their example is specific in its focus on storage heaters, bear in mind that other types of electric heating – heat pumps for example – could be time-controlled in a smart, system-friendly way too.

 

Heating and Time-of-Use (ToU) electricity tariffs

In countries with significant heating load and a sizeable amount of this heating electrified, this load is of prime interest when seeking to reduce peak loads – not least because peak electricity loads in cool, northern climates tend to happen on the coldest winter days. Heating load has a high potential to be shifted compared to other electrical loads, so even if control over heaters isn’t ceded by consumers to external entities such as system operators or smart aggregators, it makes sense to provide incentives for them to do this shifting themselves. Since money is a great motivator, pricing which encourages people to avoid consuming at peak times provides one obvious incentive.

In Canada, Nova Scotia Power offer a “Time-of-day” (TOD) rate aimed specifically at electric space-heating system owners: indeed having such a system is a precondition of entry into the tariff. The system must have timing and controls approved (and automatically operable) by the utility. By drawing electricity at times when the lowest tariff is in effect, consumers save money. NS Power save money by reducing their requirement for expensive peaking generation in times of high electricity demand. Everybody wins.

Not surprisingly, it is on winter weekdays that the TOD tariff offers the largest contrast in prices, from 19.7c/kWh on-peak (7am to noon and 4-11pm) to 8.4c/kWh overnight (11pm – 7am).

These TOD/ToU rates apply not just to heating load, but to all household electricity used at those times. So households which also have a domestic battery storage system (such as Tesla’s “Powerwall”) can take further advantage, by charging it cheaply overnight and then discharging during peak price times to avoid buying in expensive energy. And of course if they own an EV, they can charge that more cheaply overnight too – all by virtue of having agreed to allow the utility control over their heating load at other times.

Although this example can benefit EV owners through lower overnight rates, it doesn’t specifically link the ToU/TOD tariff to EV charging. However elsewhere there exist tariffs which do precisely that.

For example Sacramento Municipal Utility District, or SMUD, offer a ToU tariff with an additional incentive specifically aimed at EV owners. If you have an electric vehicle and charge it from midnight to 6am, there is currently a 1.5¢/kWh EV credit, applicable every day, all year long. As in the NS Power example, this credit applies not just to EV load but to all household electricity used during these hours. That means the price paid for any electricity consumption between midnight and 6 a.m. is 7.03c/kWh. Compare that with a rate of 14.8c/kWh from 9am to 9pm, and an eye-watering Summer Super Peak of 37c/kWh on weekday early evenings (4-7pm) from June to September.

The last point indicates that SMUD operate in a market driven by hot-weather (air conditioning) loads rather than heating demand. Nevertheless, it is no great leap of imagination to foresee similarly EV-specific offers and credits arriving in markets (like Canada) where ToU tariffs are primarily designed around the shifting of heat demand instead.

 

Distributed combined heat and power (CHP)

Most domestic heating here in the UK uses natural gas, arriving by mains pipe and combusted in a boiler. That seems hard to connect to the kind of smart home electricity management, including EVs, that we’ve been describing thus far.

Not so fast!

UK company Ceres, is one of a variety of companies involved in developing and commercialising fuel cells. Mention of fuel cells often provokes readers to think about transport markets and hydrogen fuel. In fact the Ceres fuel cells can run on a variety of fuels, including natural gas or a blend of natural gas and hydrogen. And while transport is one of their target sectors, so too is the household market.

Unlike a conventional gas boiler, a fuel cell can provide both heat and power. So the gas distribution system connected to a house can now contribute not just to heat demand, but to power generation too. And with a power generation efficiency of 50%, it’s like having a very efficient gas power plant right there in your home: i.e. distributed power generation.

Combining high efficiency with the current price of gas, it’s also much cheaper than buying electricity which is supplied centrally and delivered, after losses, through the electricity distribution system (the grid). In future, perhaps it will even prove to be low-carbon electricity too, with the “gas” pipe delivering hydrogen electrolysed using excess wind or solar power and/or methane derived from sustainable biomass sources.

Like other distributed generation, generating power using a fuel cell reduces the requirement to import electricity from the grid. Unlike distributed solar PV though, the operation of a fuel cell is inherently dispatchable and – since being used to generate heat too – likely to be contributing just when most helpful: on those cold winter evenings.

Like rooftop PV, this source of domestic generation can of course be combined with smart management, a home battery, smart electric vehicle charging and/or external aggregation and revenue streams too. It could be managed to take advantage of ToU electricity tariffs.

So, unconnected though the gas and electricity grids first appear, fuel-cell CHP provides a means by which the gas grid can be used to take load off the electricity grid. It thus ads another welcome source of flexibility and smart control into future power systems, assisting in the integration of challenging new distributed loads such as EVs.

 

Concluding notes

One of the most fascinating aspects of our ongoing energy transition is the extent to which, through combinations of technological and business model innovation, new and unexpected connections are regularly emerging.

Electric vehicles are blurring the boundaries between electricity systems and transport. Heat, often the poor relation in the drive towards cleaner, smarter energy systems, is starting to join in the fun.

 

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