A Contract design approach for colocation data center demand response

Demand response programs maintain transmission stability in power grid through reducing electricity use during peak period, making grid more efficient and robust. While numerous demand response programs are currently being deployed by utility companies, we focus on emergency demand response program, which is critical to ensure reliability during emergency situations. As a key participant in such program, we consider a critical type of data center: multi-tenant colocation data center (or colocation), where multiple tenants mange their own servers in shared space but typically lack incentives to reduce energy for demand response. To enable multi-tenant data center demand response, we propose a contract-based mechanism, called Contract-DR, which offers financial incentives to tenants to shed energy during emergency situations, reducing the usage of cost-ineffective and environmentally-unfriendly diesel generation. We conduct theoretical analysis to prove the optimality of Contract-DR and also validate it through a trace-based study.