Electrifying Hydronic Heating in New England
Replacing Boilers with a Grid Innovation
White Paper #1
Space heating represents a major expense for consumers, and a major source of carbon
emissions for the planet. Replacing boilers and furnaces with heat pumps can lower costs
for consumers and reduce carbon emissions on a renewables-intensive electric grid.
However, the existing approach to rolling out heat pumps is confronting two major
challenges:
Challenge 1: In many places, air-to-water heat pumps cannot keep homes with hydronic
distribution systems1 warm on the coldest days; and
Challenge 2: Heat pumps do not help prepare for a renewables-intensive grid, and in fact
strain the existing system by delivering a peak load exactly when other loads
on the grid are also peaking, on the coldest days in the winter.2
This paper describes how the grid innovation of transactive thermal storage has the
potential to meet both challenges. The second paper in this series describes what is
required to implement this grid innovation from the
What is a Transactive Energy
perspective of technology, regulation, business
Resource?
models, and business practices.
The term Transactive Energy was
Heat Pumps and Hydronic Heating Systems
In hydronic heat distribution systems, water is
heated in a boiler and then circulated by one or
more pumps throughout the building to heat
emitters: radiators, baseboard fin-tubes, panel
heaters. Hydronic heat is most common in places
where temperatures are cold, because hydronic
heating systems can deliver large amounts of heat
with relatively inexpensive equipment. The list of
18 states with highest fraction of hydronic heat
contains 14 of the 20 coldest states in the country.
coined almost 40 years ago by
researchers at the Pacific Northwest
National Laboratory (PNNL). A
Transactive Energy Resource is a
physical electric device capable of 247, real-time localized response to grid
conditions that can significantly shift
and adapt its pattern of electric power
use with negligible negative consequences for its primary use. Transactive Energy Resources usually, but
not always, have some sort of
embedded storage that allows them to
decouple the purchase of energy from
the delivery of energy services.
A critical parameter for hydronic heat is the
temperature of water entering the home’s heat
distribution system. This water temperature is
called the Source Water Temperature (SWT). Some systems use a fixed SWT, although this
is not as efficient as using a system that varies the Source Water Temperature to match the
heating needs of the house. This is done by monitoring the outside temperature and
adjusting the SWT upward as the outside temperature falls. The SWT that is chosen by this
system on the coldest day is referred to as the design day or required SWT.
Hydronic heating systems are also called forced hot water systems
Heat pumps are especially “peaky” because on cold days, not only do homes and business call for more heat
when it is cold, but the Coefficient of Performance of the heat pump drops, requiring more electricity to
deliver the same amount of heat.
1
2
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Many hydronic heating systems in the northern tier of the United States have required
SWTs that are between 140° and 180° F. This is a higher temperature than can be delivered
by today’s air-to-water heat pumps. Importantly, these higher water temperatures are not
required all the time, but a heating system that cannot keep the house warm on really cold
days is unacceptable.
There is conflicting data on the percentage of homes in the US with hydronic heating, and
almost no systematic data on required SWTs. According to the Federal Energy Information
Administration (EIA), homes with hydronic heating systems represent about 8% of all
homes in the country, and over 20% in the 20 coldest states. However, the EIA’s 2020
Residential Energy Consumption Survey3 reports that 31% of Maine homes use steam or
hot water for heat. Efficiency Maine’s 2015 Residential Baseline Study4 reports that this
number is over 70%. Evidence on required SWT’s is strictly anecdotal: reports from local
contractors in Maine suggest that over 90% of hydronic systems in Maine require SWTs
above 140° F, and many homes (estimates range from 5% to 20%) with hydronic heating
have required SWT over 160° F. Of course, these homes will also be those that use the most
energy for heat.
The Challenge of Preparing for Renewables and Electrification
The electrification of space heating will challenge the electric grid. Heat pumps pose a
particular problem, because they tend to have peak load at just the same time that other
loads are peaking.
Total non-heat load on the grid
Heat pump load on a cold winter day
Source:
“The addition of heat pump electricity load profiles to
Great Britain electricity demand: Evidence from a heat
pump field trial,” Applied Energy 204 2017 pp 332-342.
The graph below shows the effect on the grid of 25% and 50% penetration of residential
and commercial heat pumps on cold winter days.
3
4
https://www.eia.gov/consumption/residential/data/2020/index.php?view=state
https://www.efficiencymaine.com/docs/2015-Maine-Residential-Baseline-Study-Report-NMR.pdf
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ISO-NE Winter Peak Load with 50% Residential and Commercial Heat Pump Load
50
Gigawatts
40
50% Heat Pump Penetration
25% Heat Pump Penetration
Peak Winter Load
ISONE Total Generation
ISO-NE All-Time Peak Load
ISO-NE Max Load 2014-2022
30
20
10
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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19
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22
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Hour Ending
But peak loads will not be the most immediate problem facing beneficial electrification.
Almost every model of a decarbonized energy system features a major role for intermittent
renewables in meeting our energy needs.5
The Declining Value of Renewables
These models – which strive to find the
The generation of electricity by most
economically optimal mix of generation
renewables is highly time- and place-specific.
technologies, transmission infrastructure,
Wind farms need to be located in windy
grid control, and storage – all show a
locations and only deliver when the wind is
blowing; all solar arrays in a region deliver
surprising result: they predict a significant
their peak output at the same time.
amount of renewables curtailment. Indeed,
In the absence of large amounts of storage
even on today’s grid, renewable curtailment
and/or transmission, the consequence of this
is not uncommon, and is in fact a frequent
time and place specificity is that the value of
occurrence in certain locations. (See
renewable generation tends to fall when and
Graphical Appendix.) One consequence of
where the wind is blowing and the sun is
this over-generation is a continuing erosion
shining, as supply outstrips demand in these
in the value of renewables: see sidebar.
places and at these times. This trend has been
carefully documented by researcher at
Lawrence Berkeley National Labs, (Seel et al,
“Impacts of High Variable Renewable Energy
Futures on Wholesale Electricity Prices, and
on Electric-Sector Decision Making”), which
shows a significant erosion of wholesale electricity prices for wind and solar in places
where large amounts of these types of generation assets have been deployed.
This erosion in value presents the perhaps
greatest short-term challenge to the continued development of renewable energy in the
US.
What these models imply is that the US
energy system is heading towards a future of
intermittent cheap energy. While most
people look to the problem of what to do
when the wind doesn’t blow and the sun
doesn’t shine, in fact the more immediate
problem is how to economically make use of
this abundance. Of course batteries can solve
both the problem of increasing peak
demand, and the problem of wasting
abundant low-carbon energy, but at an
enormous cost.6
5 Not all low-carbon energy sources are intermittent. Geothermal, biomass, and nuclear are low-carbon
generation technologies that can serve as base load or reliable dispatchable generators.
6 Using NREL’s projections for the installed cost of solar ($1,000/kW), wind ($1,500/kW), and batteries
($500/kWH), the addition of 4 hours of storage to a grid-scale solar facility will triple the levelized cost of
energy (LCOE), and will increase the LCOE of wind by 230%.
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These periods of low prices present an opportunity for flexible loads – like EVs and heating
systems with thermal storage – to lower the cost of driving and heating homes. Loads that
can turn on when electricity is abundant (and cheap) can not only reduce wasteful
curtailment, but also lower the cost to consumers of getting around and staying warm.7
Thermal Storage
This set of papers explores how adding thermal storage with a resistive boost element8 to
an air-to-water heat pump can meet both of these challenges, delivering hotter water when
needed, and allowing both the heat pump and the resistive boost element to help balance
intermittent renewables on the grid. The thermal store does this by decoupling the delivery
of energy to the property from the delivery of heat to the residents. This means that the
heating system can reduce or eliminate energy deliveries when electricity is scarce, and
dramatically increase electricity deliveries when electricity is abundant. The use of a
resistive boost element also allows the storage tank to be hotter than what the heat pump
can deliver, only delivering this hotter water to the system in those hours when it is
required.
The left panel below shows the outline of such a hydronic heating system. The right panel
shows that a system like this can also be used with forced hot air heating systems by
adding a heat exchanger to the plenum of the duct work.
Hot Air Supply
Emitters
Thermal Energy Store
Boost
Store
Boost
Store
Variable Temp
Mixing Valve
>
Variable Temp
Mixing Valve
Resistive Elements
>
Heat Exchange
in Plenum
Thermal Energy Store
Software
Agent
Cold Air Return
Resistive Elements
Software
Agent
Sensing and Control
Sensing and Control
>
>
SCADA
SCADA
Heat Pump
Heat Pump
Forced Hot Water System
Forced Hot Air System
The heating system described here uses entirely off-the-shelf equipment, with one
exception: the control system. A standard heating system uses a very simple feedback
control algorithm: when the thermostat indicates that the house is below its setpoint, it
instructs the boiler (or furnace or heat pump) to come on, using as its energy source either
fuel from a tank (in the case of fuel oil) or energy delivered by pipeline (natural gas) or a
wire (electric). But a heat pump thermal storage heating system requires a more complex
control algorithm. The decision to use the store to raise the SWT can be made by a simple
7 Few energy suppliers or aggregators currently face local real time prices, and therefore cannot benefit from
this type of beneficial load adjustment. The regulatory reform (and business model changes) required to
allow end users to do so will be discussed in the second white paper in this series.
8 Resistive boost elements are a standard feature of most heat pump systems in cold climates. However, these
non-Transactive loads exacerbate the peaking problem, do nothing to alleviate the problem of overproduction by renewables, and can be very costly to residents.
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mixing valve that uses the current outside air temperature to control the mix of heat pump
and boost store energy. But the decision to put energy into the store must be made based on
the current and future cost of electricity and the expected future heat requirements of the
building. For this reason, such a system requires a forward-looking algorithm that uses
weather forecasts to anticipate when the heating system will call for higher SWTs, and uses
price forecasts and real-time data from energy markets to only turn on the resistive boost
element when necessary, and when electricity is cheap and abundant. The cloud-based
agents running these algorithms are responsible for keeping residents warm, as well as
minimizing the cost of heat. This responsibility is the flip side of the coin of 24-7 real-time
localized response to grid conditions inherent in this grid innovation.9
These forward-looking optimization techniques are not new. For example, a group of
researchers at Lawrence Berkely National Laboratories are developing and deploying
algorithms like this for thermal storage heating systems in a cluster of projects associated
with Cal-Flex Hub.10 In addition VCharge, a Providence RI company, used these techniques
to control resistive electric thermal storage heaters in hundreds of homes in
Massachusetts, Maine, Pennsylvania, and the UK between 2009 and 2018.11
A heat pump with a transactive thermal storage can heat Northern-tier hydronic homes
with high SWT requirements and can prepare for a renewable grid – matching wind and
solar when it would otherwise be curtailed, and adding nothing to existing peak loads.
Using Forward-Looking Optimization techniques to anticipate the few times in the year
when the system will require hotter water than the heat pump can deliver, it allows the
home to be heated primarily by the heat pump, with all the efficiency benefits that this
brings. In addition, the thermal store can be used to keep the resistive boost and the heat
pump from running during on-peak periods, effectively flattening the load curve and
consuming more energy during cheap off-peak periods.
The Millinocket Pilot
Millinocket Maine is just west of two of the largest wind farms in New England. As a result
of very high generation levels from these farms on windy days in the winter, the ISO-New
England substation at Keene Road gets overloaded in 20% of the hours during winter
months. This forces ISO-NE to curtail the wind farms, wasting free low-carbon energy.
When this happens, the wholesale price of electricity at Keene Road and another 6
substations surrounding it goes to negative $40 per MWH or below.12 This results in
stranded costs for Maine’s utilities, and greatly weakens incentives for wind developers to
build in this part of the state.
9
Note that this grid innovation introduces intertemporal substitution into the delivery of energy. The true
power of storage comes from allowing the system to evaluate tradeoffs between current and future energy
delivery to the building. For example, if the forecast calls for high winds and low prices driven by those winds
in 3 hours, the system will choose to wait before filling the store.
10
The California Load Flexibility Research and Development Hub (CalFlexHub) is the innovation hub
supporting the scaled adoption of affordable, equitable, and reliable load flexible technologies.
https://www.sciencedirect.com/science/article/pii/S0306261922006894
11 VCharge was sold to a UK energy supplier in 2016. The acquiror subsequently closed down the US
operations and integrated the UK operations into its business in the UK.
12 These “local” prices are called p-node or nodal prices by ISO-New England.
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Millinocket is an ideal field deployment site for the grid innovation discussed in this paper,
with the potential to demonstrate how beneficial electrification with transactive thermal
storage can accelerate the transition to a renewable energy ecosystem. In addition, while
regulatory change will be required in both Distribution and Energy Tariffs to fully
compensate transactive loads for the benefits that they deliver to the system13, the existing
tariffs structures are sufficient for this grid innovation to lower the cost of home heating for
Maine residents. By allowing residential customers to put their electric heating load on a
highly favorable Time-of-Use Tariff offered by both of the large investor-owned utilities in
Maine, distribution charges can be cut by 60% during off-peak periods (from 11.4¢ per
kWh to 4¢ per kW14) making heating with electric cheaper than heating with oil.
The situation at Keene Road is not very common on today’s electric grid, but it is the future.
Intermittent, cheap, low-carbon energy will be abundant, not only in Maine, but everywhere. Our ability to access this coming abundance requires that we re-think some of our
infrastructure choices (especially with respect to our electric appliances) as we electrify
the energy ecosystem. While the solutions will not look the same everywhere, starting with
a concrete problem in a location where solving it is hard is a great place to start. As the
bumper sticker says: Think Globally; Act Locally. Millinocket is the canary in the coal mine
for a low carbon electric grid.
These regulatory changes will be discussed fully in the next white paper.
These are the rates for Versant Power’s Standard Residential and Thermal Storage Heat tariff. The on-peak
distribution tariff is 38.3¢ per kWh.
13
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Graphical Appendix: The Declining Value of Renewables
One week of prices in CAISO
Source: CAISO
Frequency of Negative Prices in 2022
Percentage of Days in Which Prices Go To Zero or Below Between 10:00AM and 2:00PM
CAISO 2022
80%
70%
60%
50%
40%
30%
20%
10%
0%
January
February
March
April
May
June
NP15
July
SP15
August
September
October
November
December
ZP26
Source: CAISO
California Load Zones
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Negative Prices Around Wind Farms in the Midwest ISO
The Forty Most Congested
Price Nodes in MISO and their
Frequency of Negative Prices
Q1 2021
Node
ALTW.FXLK3.ARR
GRE.ORMATHR
GRE.ELMCR2_IBR
GRE.ELMCRK
GRE.TRIMTTRIM
NSP.ODELL.WND
GRE.LKFLGR1
GRE.LKFLGR2
GRE.LKFLGR3
GRE.LKFLGR4
GRE.LKFLGR5
GRE.LKFLGR6
ALTW.ODINWF
ALTW.LKFLD.IPL
NSP.NOBLE.CWS1
NSP.NOBLE.CWS2
NSP.NOBLES.WND
ALTW.SOUTH.FRK
NSP.CISCO1
NSP.EWINGTON1
GRE.CHRISFRWD
NSP.NOBLES2.MP
ALTW.CMMPA.WIN
MEC.HIGHLAND1
MEC.HIGHLAND2
MEC.HIGHLAND3
MEC.OBRIEN
MEC.OBRIEN.MVP
ALTW.UPLANDPR
NSP.FENTON.WND
ALTW.W_BINGHAM
ALTW.ENDV
ALTW.MRES
ALTW.MRES_1.AZ
GRE.ALTW.ENDVI
MEC.GLACIERS
MEC.PALOALTO1
ALTW.LEDYD.MVP
ALTW.FCLDFCL1
ALTW.WRTHNGT
MEC.KOSUTH.MVP
ALTW.GOLDENPLN
ALTW.UPLS_1.AZ
NSP.JEFFERS2
MEC.ADAMS
AMIL.SBL_ASIBL
ALTW.KOSSUTH
MEC.CONTRAIL1
ALTW.WOLFWIND
MEC.POCHNT_1
https://api.misoenergy.org/MISORTWD/lmp
contourmap.html
Type
Hub
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Loadzone
Gennode
Gennode
Gennode
Gennode
Hub
Gennode
Gennode
Gennode
Gennode
Loadzone
Hub
Gennode
Gennode
Gennode
Hub
Gennode
Loadzone
Hub
Gennode
Hub
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Gennode
Percentage
of hours
that LMPs
were
negative
31%
30%
30%
30%
30%
30%
30%
30%
30%
30%
30%
30%
30%
30%
29%
29%
29%
29%
29%
29%
29%
29%
29%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
28%
27%
27%
27%
27%
27%
27%
27%
27%
27%
Source: MISO
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Negative Prices East of Millinocket, ME
Hourly LMPs Behind the Keene Road Constraint
2021
500
400
300
200
100
0
-100
Ja
nu
a
Ja ry
nu
a
Ja ry
nu
Fe ary
br
u
Fe a ry
br
u
Fe a ry
br
ua
r
M y
ar
ch
M
ar
c
M h
ar
ch
Ap
ril
Ap
ril
Ap
ril
M
ay
M
ay
M
ay
Ju
ne
Ju
ne
Ju
ne
Ju
ly
Ju
Au ly
gu
Au st
gu
A st
Se ugu
pt st
e
Se mb
pt er
e
Se mb
pt er
em
Oc ber
to
Oc be r
to
Oc be r
No tob
ve e r
No mb
ve e r
No mb
ve e r
D e mb
ce e r
D e mbe
ce r
D e mbe
ce r
m
be
r
-200
Source: ISO-New England
The Declining Value of Solar Through Time in New England
Source: ISO-New England
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The Declining Value of Solar as a Function of Solar Penetration
Source: Andrew D. Mills, Joachim Seel, Dev Millstein, James Hyungkwan Kim, Mark Bolinger, Will Gorman, Yuhan Wang,
Seongeun Jeong, Ryan Wiser, “Solar-to-Grid: Trends in System Impacts, Reliability, and Market Value in the United States.”
LBNL February 2021
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