Cost-Optimal Consumption-Aware Electric Water Heating Via Thermal Storage Under Time-of-Use Pricing

Time-of-use electricity pricing is touted as one of the solutions toward optimal load distribution in the future of smart grid. However, the benefits of such an approach are limited as human electricity usage can often be described as inelastic in nature, or not sensitive to pricing in economic theory. Water heating constitutes one of the largest components of such usage. This paper proposes technology to enable residential water heating to be converted from an inelastic to an elastic demand, which would respond to pricing incentives. This is accomplished by utilizing consumer hot water use patterns combined with thermal storage to calculate a user-specific temperature profile. Results demonstrated that such an approach could not only reduce electrical water heating costs significantly and allow for realization of large-scale grid benefits, but also improve customer experience as thermal storage capability would enable more hot water to be delivered at times of peak consumption.