Unlocking the flexibilities of data centers for smart grid services: Optimal dispatch and design of energy storage systems under progressive loading

Yingbo Zhang, Hong Tang, Hangxin Li and Shengwei Wang

Energy, 2025, vol. 316, issue C

Abstract: As the backbone of the digital world, data centers have placed great stress on the power grids, labeled “electricity hogs”. However, this challenge also presents a unique opportunity for data centers to become key contributors to grid stability by offering flexible services. By leveraging this opportunity, data centers can potentially reduce their energy costs, creating a win-win situation. This study pioneers utilizing the surplus capacity of energy storage systems for emergencies in data centers to provide grid flexibility services under progressive loading conditions. Two optimization problems are formulated: one for the optimal dispatch of energy storage capacity and another for design optimization of storage systems. The objective of optimal dispatch is to minimize the electricity cost, by efficiently allocating battery and cold storage capacities. The design optimization aims to minimize life-cycle costs, including investments and operational cost savings, under typical loading conditions and electricity markets. The study considers two typical electricity markets (Guangdong electricity market and CAISO electricity market) and four investment scenarios for energy storage systems. The impacts of discount rates and battery prices on the life-cycle economic benefits are also analyzed comprehensively. Results show significant economic benefits for data centers in providing grid flexibility services. Over the lifetime, the battery storage can achieve economic benefits of $1.6 million, which is 1.29 times its total investment. The cold storage can achieve economic benefits of $0.35 million, which is 2.39 times its total investment.

Keywords: Data center; Progressive loading; Energy storage system; Design optimization; Grid flexibility services; Optimal dispatch (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:316:y:2025:i:c:s0360544225001537

DOI: 10.1016/j.energy.2025.134511

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