## 2 Demand Response and Residential Customer Segments
### Deployment and Main Characteristics of EWHs  
EWHs are as an interesting option for improving the future power system's reliability, energy transactions, and environmental concerns. EWH was defined as a \"hidden battery\" a decade ago [6] because an EHW stores thermal energy, whereas its characteristics can help cover other missions, which is far from traditional DSM policies. Nevertheless, WHs engaged in DR pilots usually are large-size units, around 200 or 300 L, to cover needs for several end-uses (apart from personal care) and to take profit from Time of Use tariffs (ToU). This picture represents an equivalent \"hidden\" storage of around 2-5 kWh (considering 55-65 \({}^{\circ}\)C inside the water reservoir). Thus, EWHs can store energy as much as electric storage systems do, but with an increased lifetime (number of cycles) and a reduced capital cost, especially for ERWH. Nevertheless, environmental and efficiency subsidies by utilities and states could make HPWHs competitive. A main problem of proposed alternatives [2] is that some residential segments equipped with Gas WH (GWH, e.g., apartments or flats) do not have the possibility to install large EWH appliances, or they use hot water for human uses only, which limits the benefits of a larger tank. An additional problem appears when technology is changed from EWH or GWH to HPWH whose size is 20% greater and takes more time to heat water. From the authors' point of view, future scenarios for WHs present several variants for different customer segments and countries (technologies, tank size, water use, etc.). Table 1 shows the distribution of ERWH in France according to WH capacity (note that data are from 2007, but they are still representative of the residential segment), the kind of WH, and primary energy used for heating. From the point of view of control, EWHs may have unique competitive advantages with respect to other DERs: they are more uniformly distributed throughout the power system, and consequently, DR could potentially lead to larger benefits because they can be a more reliable resource through the distribution and transport levels. The deployment of the Internet of Things has made two-way communication and control devices at home that provide necessary feedback to aggregators(smart thermostats and residential monitoring; e.g., CTA-2045 protocol [8]) cost-effective. For instance, a large amount of demand data with higher granularity can improve load forecasting. These smart and two-way devices can also give feedback about the status of the appliances involved in flexible groups for Demand Response and information about end-use service (e.g., the temperature inside the dwellings or water draw temperature in the simulation case proposed in the paper). This feedback can also benefit the development of more accurate demand baselines or improve the knowledge about the status of load response (e.g., the evaluation of offline flexible resources). Finally, HPWH sales have increased drastically in the US and EU. For instance, France increased HPWH sales by 13% from 2018 to 2019 (116,000 appliances in 2019 vs. 103,000 in 2018) or 12% of overall WH appliances in 2019 (Table 1). This increase can also be explained by energy-efficiency policies in buildings [9], at the expense of GWHs and SThWHs, which have decreased in sales (between 5% and 20%, according to [10]). In California, incentive programs ($1000 to $3000) developed by some utilities and some interesting changes in building codes act as a catalyzer for HPWH adoption. The capacity of the tank is another important factor because it conditions the storage potential and the time of curtailment, and this can lead to a higher possibility for customer complaints. This capacity varies from country to country. In [11], the capacity of WH tanks is analyzed for EU countries. Figure 1 gives the average volume of larger (>30 L) EWH (mainly ERWH). The EU average is around 150 L, with the biggest sizes in France (258 L) and Finland (229 L). The smallest size corresponds to Italy and Spain (67-90 L).