Grid impacts of building electrification: Not that scary!

November 6, 2023 | Neil Kolwey, Industrial Program Director & Building Electrification Specialist

As momentum builds towards electrifying our homes and other buildings with heat pumps, heat pump water heaters (HPWHs), and induction cooking, many contractors and homeowners are asking: “Can the grid handle all this new electric load?”

To respond to this question, the Beneficial Electrification League of Colorado (BEL-CO) sponsored a synthesis of the existing studies of grid impacts of building electrification by several Colorado utilities and by the City of Denver. We hired a consulting company, Cadmus, to summarize the key points of these studies, which they did in this webinar and final report. (The Southwest Energy Efficiency Project (SWEEP) is an active member of BEL-CO and helped supervise the Cadmus project.) 

The grid impact studies share many common points. Colorado utilities, including Xcel Energy, the state’s largest electric utility, are tracking the adoption of electric devices and planning for future transmission and distribution system upgrades and the need for new generation resources.

  • In Xcel’s case, the utility predicts that even under the more aggressive electrification scenario to achieve the greenhouse gas (GHG) emission reduction goals under Colorado’s “GHG Roadmap,” Xcel’s system will not become winter peaking until about 2041. Although some distribution system upgrades may be required before then, Xcel has a lot of time to plan for adding new generation resources before the shift towards winter-peaking begins. 
  • Winter peaking due to building electrification may happen by 2035 in some utility service territories, such as that of Holy Cross or possibly Platte River Power Authority. The timing of this shift depends on the aggressiveness of building electrification adoption scenarios.

Currently, all Colorado utilities have the highest peak demands during summer months, due to cooling loads. When a utility becomes “winter peaking,” this means it may need to add new generation, transmission, and distribution resources to provide the winter peak power needs, which will result in added costs. In addition, it may be challenging and/or expensive to fully serve the winter peak demands with renewable resources and battery storage, because the peak demand times (probably morning hours on the coldest days) may not align well with the availability of wind or solar generation. 

Here are some other key points of the grid impacts studies:

  • The building electrification grid impacts are mainly from space heating (water heating impacts are much smaller), and there are larger grid impacts from residential electrification than for commercial buildings. 
  • Electrification of vehicles will add more electricity consumption than buildings, but will contribute less to winter peak demands. This is because most vehicle charging will occur during off-peak hours.
  • For existing homes and commercial buildings, partial electrification (displacement of 75% or more of fuel use), through the use of dual-fuel heat pump systems (with backup gas or propane furnaces) reduces the grid impacts of electrification. This will also tend to increase the load factor of existing generation resources, helping to reduce electricity rates, at least in the short-term. 
  • Full electrification of heating in new or existing homes causes more significant grid system impacts and costs. However, the grid impacts can be reduced through implementing energy efficiency measures (insulation and air-sealing) along with heat pump adoption, and through installing high efficiency cold-climate heat pumps. 
  • There is limited ability to do load-shifting to reduce the grid impacts of space heating. Water heating (through HPWHs) has a much smaller grid impact, but its loads can be more flexible.
  • Utilities should incorporate building electrification into forecasts by monitoring and updating projections for electric device adoption. 
  • Utilities should monitor and anticipate new generation needs and distribution-system impacts, and iteratively plan for and procure clean generation additions.

Overall, the studies indicate that the grid impacts of building electrification are quite manageable. SWEEP encourages all Colorado utilities to aggressively pursue building electrification targets, keeping in mind the best practices mentioned above. Working together, including through BEL-CO, we can transform the market for heat pumps and HPWHs, and achieve or exceed the state’s climate goals.