The problem with water is that to make it cost-effective requires appropriate geologic configuration and massive infrastructure investment. In California for example, all the appropriate locations are used, there are no more viable locations (according to the USGS)
What about electric water heaters? I am unfamiliar with the usage patterns and losses over time, but having my home water heater having some variability in temperature would be ok with me — I’d simply adjust the handle in the shower.
Colleagues of mine are working on a system using these kinds of water heaters. Specifically, they are working for a standardized protocol to allow these devices to negotiate prices / indicate to the grid how much they could take.
From what I heard they said something like a half-time for the heat in these devices of about 1 to 2 days.
Thermostatic valves are common in institutional water heating installations.
There are also quite a few people who use thermal storage with wood fired boilers. The boilers burn the most efficient and cleanest when they are near full output, then hot water is stored in an insulated tank to intermittently supply the house with heat.
With a properly installed thermostatic mixing valve, you don't even need that. The water will always exit at a safe, constant-ish temperature regardless of the water temperature in the heater, by mixing in the cold supply.
