A Truthful and Efficient Incentive Mechanism for Demand Response in Green Datacenters

Abstract

Datacenter demand response is envisioned as a promising tool for mitigating operational stability issues faced by smart grids. It enables significant potentials in peak load reduction and facilitates the incorporation of distributed generation. Monetary refund from the smart grid can also alleviate the cloud's burden in escalating electricity cost. However, the current demand response paradigm is inefficient towards incentivizing a cloud service provider (CSP) that operates geo-distributed datacenters. To incentivize CSP participation, this work presents an auction mechanism that enables smart grids to voluntarily submit bids to the CSP to procure diverse amounts of demand response with different payments. To maximize the social welfare of the auction, the CSP that acts as the auctioneer needs to solve the winner determination problem at large-scale. By applying the proximal Jacobian alternating direction method of multipliers, we propose a distributed algorithm for each datacenter to solve a small-scale problem in a parallel fashion. Desirable properties of the proposed auction, such as social welfare maximization and truthfulness are achieved through Vickrey-Clarke-Groves (VCG) payment. Through extensive evaluations based on real datacenter workload traces and IEEE 14-bus test systems, we demonstrate that our incentive mechanism constitutes a win-win mechanism for both the geo-distributed cloud and the smart grid.