Evaluation of Urban CO2 Reduction Potential from Demand Response-Ready Residential Heat Pump Water Heaters

This study quantifies the CO₂ reduction potential of demand response (DR) operation of residential heat pump water heaters (HPWHs) in Utsunomiya City, Japan. An evaluation framework was developed by integrating spatiotemporal electricity demand and photovoltaic (PV) generation, both estimated from approximately 410,000 smart meters, along with dynamic grid carbon intensity. Scenario analyses assessed the combined impact of HPWH penetration, DR readiness, and PV adoption. Results show that enabling DR in existing HPWHs can reduce citywide CO₂ emissions from HPWHs by up to 34%, primarily by shifting operation to daytime with lower grid carbon intensity. When PV deployment was doubled or tripled, surplus PV utilization by HPWHs increased substantially, enhancing the CO₂ reduction effect of DR even at current penetration levels. However, the effectiveness of DR varies across the city, as surplus electricity remains scarce in dense areas with high demand. In the most ambitious scenario, where 80% of households adopt HPWHs and citywide PV generation triples, total CO₂ emissions from all residential water heating systems across the city could be reduced by up to 49%. Developing locally optimized strategies that integrate PV, HPWHs, and DR is essential for realizing effective urban decarbonization through DR operation of residential water heaters.