Analysing the Economic Viability of Implicit Demand Response Control of Thermal Energy Storage in Hot Water Tanks

Demand-responsive control of electrically heated hot water storage tanks (HWSTs) is one solution, already present in the building stock, to stabilise volatile energy networks and markets. This has been put into sharp focus with the current energy crisis in Europe due to reduced access to natural gas. Furthermore, increasing proportions of intermittent renewable energy will likely add to this volatility. However, the adoption of demand response (DR) by consumers is highly dependent on the economic benefit. This study assesses the economic potential of DR of centralised HWSTs through both an analysis of spot price data and an optimisation algorithm approximating DR control. The methods are applied to a case study apartment building in Norway using current pricing models and examine the effect of the demand profile, electricity prices, heating power and storage capacity on energy cost and energy flexibility. Unit cost savings from DR are closely linked to the variation in unit energy price during the optimisation period. Increasing the storage capacity or the heating power increases the flexibility with a diminishing rate of return. However, increasing storage capacity does not result in cost savings as additional heat losses are greater than the saving from shifting demand, except for during highly volatile electricity price periods. Changing the minimum setpoint temperature improves the cost curve as a greater thermal storage capacity can be achieved without increasing heat loss. Systems utilising a smaller heating power are more economical due to the dominant role of the monthly price related to the peak energy demand of the system.