Strategic Innovation fund

Watt Heat

Project Data

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Watt Heat aims to accelerate the decarbonisation of heat and reduce costs by stimulating the market for flexibility through heat storage technologies. The project is investigating the potential of thermal storage to mitigate peak electricity load from heat, capture low energy prices, and provide wider system and DSO flexibility.

What is the project about?

The decarbonisation of heat in homes presents a significant challenge in achieving Net Zero, particularly the electrification of heat which increases peak demand. Flexibility of heat demand, facilitated by thermal storage, has the potential to reduce the need for network infrastructure, optimise the consumption of renewable energy, and reduce energy costs for customers. Limited data exists on the performance of thermal storage solutions, and market mechanisms for heat flexibility are nascent. Whilst several innovation and BAU trials are ongoing exploring domestic DSR flexibility opportunities, such as Crowdflex, DFS, and ODFM, exploration of heat technologies is currently limited to single asset types or single market opportunities. Further insight is needed into the DNO benefits thermal storage can provide, and into how a range of heat technologies with thermal storage under different propositions and multiple market incentives could act in combination in future. Watt Heat aims to consolidate knowledge and demonstrate viable heat flexibility propositions for widespread adoption.

How we’re doing it

Watt Heat will investigate the flexibility potential of thermal storage technologies – including cutting-edge technologies in thermal batteries, as well as the use of more traditional technologies such as heat pumps in combination with other forms of heat storage.

Watt Heat has been investigating how this potential can support the effective incentivisation of ESO and DSO value pools so that heat flexibility can be unlocked for end-consumers. We have modelled load profiles of technologies against demand times where they are required (usually peak demand times) vs flexible demand patterns (that avoid peak demand) by using thermal storage technologies.

The project is also looking to complete a first, real-life demonstration that will provide insight into the mass interaction of thermal storage technologies that will help shape market-ready propositions through generating detailed load profiles, evaluating the effectiveness of these market signals and customer access to these value pools.

What makes it innovative

Currently, exploring the flexibility potential of thermal storage assets has focused on consumers saving on energy costs through ToU tariffs, and revenues from central system services. Ongoing trials focus on individual heat technologies and incentives, rather than how technologies and incentives will behave in combination in any given network area. Interactions between thermal storage and DSO services are also relatively unexplored.

Customer propositions and business models remain unproven, as System Operators need market scale to invest in designing incentives for these technologies, but consumer uptake is slow due to high upfront costs. Watt Heat is therefore aiming to support propositions that can deliver value to end-consumers, DNOs, DSOs and the wider energy system.

What we’re learning

We are learning that thermal storage provides a significant opportunity to support heat flexibility propositions:

  • Currently there is a disconnect between the value realised from flexibility to it being passed through to the end-customer (heat technology asset-owner)
  • Thermal storage has the ability to lower the unit price of electricity for households
  • Current flexibility propositions for heat technologies require more trial data to refine baseline performance to define what value should be passed back to customers
  • If customers can share in the benefits of flexibility, they may be more willing to invest in (low—carbon) heat technologies, which would support the transition to Net Zero
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