Wholesale electricity pricing in the presence of geographical load balancing

Power management in data centers is becoming an increasingly important issue. Geographical load-balancing (GLB) is one such power management method, which exploits data centers' workload flexibility and spatial diversity to minimize electricity cost. However, conventional wholesale electricity market clearing mechanisms would face many challenges in the presence of the GLB, particularly with regards to bidding and market clearing. We showcase that electricity prices can be unstable when employing dynamic pricing programs that are not properly updated to account for the coupled nature of these infrastructure systems. This instability leads to supply/demand imbalances which may require costly compensation from the real-time market. In addition, it can increase the required reserve margins of the power grid. To address this issue, we provide a distributed market clearing algorithm that overcomes these challenges in the presence of GLB.