Would you like to be paid to heat your water?

New solar and wind electric generators are being installed at increasing rates because their costs are declining and utilities are getting better at integrating intermittent generation into their grids. New renewable generation plants are more economical than new coal or natural gas plants. Renewable generators are, therefore, displacing fossil or nuclear fueled plants when the old plants are retired.

However, generation from solar and wind sources doesn’t necessarily happen at the exact same time electricity is being used. The inevitable result is that renewable generation is being overbuilt for some hours during the year. Some generation, including from solar and wind sources, is available when there isn’t enough demand for it.

When that happens, the utility grid reacts in one of two ways (or both): Either wholesale prices fall below zero, and/or energy that could have been generated at no marginal cost without the use of fuel is curtailed (i.e., the grid operator prevents this essentially zero-cost electricity from being generated).

This is happening on a large scale now. The California Independent System Operators’ April 2023 report on curtailed renewable resources shows that over a billion kilowatt-hours of wind and solar energy were curtailed in the first four months of this year. At La Conner retail energy rates, that’s over $100 million of zero-emission, nearly zero-cost energy that was not produced at all, because the grid didn’t have enough instantaneous demand to take that electricity at the times it could have been produced.

When the circumstances that result in curtailment occur, energy prices on wholesale markets are very low. Sometimes, wholesale energy prices can even become negative – the utility has to pay customers to take electricity off the grid to keep the system balanced.

It is possible to create retail rates and systems that allow customers to participate in wholesale markets. In other words, if you had inexpensive energy storage systems that could absorb excess grid energy when it is being produced, the utility industry could actually PAY YOU to take zero-cost, zero-emission electricity.

In Scotland, individual apartment residents have reduced their energy bills by installing thermal storage systems that capture “excess” wind energy and use it to heat a well-insulated box filled with bricks. When energy costs are high, stored heat from the bricks is released, reducing the need to either burn gas or use new electric resistance heat. These apartments are being heated with what would otherwise have been curtailed renewable energy.

To be paid to heat your water here, and reduce your propane, gas or electric costs, you would need a water heater that could receive a signal from the utility to start heating when wholesale prices are negative. You would need to be able to overheat your water, and mix cold water into it to be sure you could safely use the water if the water in your storage tank is too hot. The utility would need to have a retail rate that allowed customers to receive electricity at a lower price than your usual rate, at utility-specified times, for an amount up to the amount captured by your water heater.

None of this is difficult. It does require appropriate regulation and some easily-developed technology.