Large-Load Demand Flexibility as Virtual Storage

Chandan Chaudhary, Mohammed Ben-Idris, Joydeep Mitra

Water electrolysis plants, hyperscale data centers, and aluminum potlines represent gigawatts of demand-side flexibility for bulk power system balancing, operational planning, and procurement services. Such loads are scheduled through per-interval power bounds and horizon energy windows, whereas co-located battery energy storage systems (BESS) operate under state-of-charge dynamics. The two formulations share no common mathematical structure, and the joint procurement value of co-located loads and storage goes unrealized as a result. This paper establishes the connection between the two formulations through a virtual storage (VS) equivalence. Every feasible large-load trajectory under power-bound and energy-window constraints is a valid charge trajectory of a VS device that operates at unity accounting efficiency in the grid power balance. Production and service-level costs lie outside this abstraction and enter the dispatch through curtailment opportunity costs. For a portfolio co-located with a BESS, aggregation reduces the constraint count from O(NT) to O(T) and yields a co-dispatch price for both resources. Validation on the IEEE RTS-GMLC with three representative load classes shows that virtual storage delivers the dominant share of joint procurement savings. In the tested case, savings are additive because the two resources dispatch to non-overlapping intervals, and the curtailment shadow price tracks the peak-price band onset rather than the daily peak price.