A Truthful Incentive Mechanism for Emergency Demand Response in Geo-Distributed Colocation Data Centers

Data centers are key participants in demand response programs, including emergency demand response (EDR), in which the grid coordinates consumers of large amounts of electricity for demand reduction in emergency situations to prevent major economic losses. While existing literature concentrates on owner-operated data centers, this work studies EDR in geo-distributed multitenant colocation data centers in which servers are owned and managed by individual tenants. EDR in colocation data centers is significantly more challenging due to lack of incentives to reduce energy consumption by tenants who control their servers and are typically on fixed power contracts with the colocation operator. Consequently, to achieve demand reduction goals set by the EDR program, the operator has to rely on the highly expensive and/or environmentally unfriendly on-site energy backup/generation. To reduce cost and environmental impact, an efficient incentive mechanism is therefore needed, motivating tenants’ voluntary energy reduction in the case of EDR. This work proposes a novel incentive mechanism, Truth-DR, which leverages a reverse auction to provide monetary remuneration to tenants according to their agreed energy reduction. Truth-DR is computationally efficient, truthful, and achieves 2-approximation in colocation-wide social cost. Trace-driven simulations verify the efficacy of the proposed auction mechanism.