(68a) Into Hot Water: Utilizing Thermal Distributed Energy Resources to Improve Grid Reliability

Combined heat and power (CHP) technology along with grid-integrated water heaters (GIWH) are underutilized thermal distributed energy resources. They can be implemented on a large scale to provide ancillary services for the grid, including load shifting, frequency regulation, and improved grid reliability. The market is ripe for CHP and GIWH to be rapidly implemented on a large scale. This paper discusses the legislative and technical background of CHP and GIWH, the way these technologies provide benefits to a rapidly modernizing smart grid, and concludes with potential policies on the state and federal level that would support greater use of thermal distributed resources. Three policies are discussed in detail. The first of these is to expand the Department of Energy’s CHP Technical Assistance Partnership program to facilitate knowledge and implementation of a shared ownership model for CHP systems between utilities and an institution that will utilize the energy produced. Next, states should encourage utilities to create incentives for consumers to install GIWH to be used in utility programs; these incentives should focus in particular on assisting low-income households to purchase GIWHs. Last, states should set goals to have all utilities that function on retail markets to adopt time-based pricing structures for electricity.