Risk management in Internet Data Center operations under smart grid environment

In Internet Data Center (IDC) operations, some uncertainties are needed to be managed. Otherwise, IDC operators will be faced with a high operation risk. In existing work, electricity forward contract is adopted to minimize the IDC operation risk in smart grid environment under the assumption that workload and spot electricity price are independent. However, the above assumption is unreasonable in smart grid environment, resulting in the unsatisfactory performance of electricity forward contract. In this paper, a novel scheme is proposed to minimize the IDC operation risk in smart grid environment considering the correlation between workload and spot electricity price, based on a portfolio consisting of electricity forward contracts and electricity call (put) options in electricity derivative markets. Simulation results show that the proposed scheme can significantly reduce the IDC operation risk. Compared with electricity forward contract, the proposed scheme has more stable and better performance.