Remunerating Space-Time, Load-Shifting Flexibility from Data Centers in Electricity Markets

TL;DR

This paper proposes a market framework that remunerates data centers for their space-time load-shifting flexibility using virtual links, enhancing grid integration of renewables and stabilizing prices.

Contribution

It introduces a novel market clearing formulation that treats data centers as prosumers providing load-shifting services via virtual links, ensuring economic efficiency and fairness.

Findings

DaCes are remunerated based on nodal price differences.

The approach reduces space-time price volatility.

The formulation satisfies economic properties like revenue adequacy.

Abstract

We study an electricity market clearing formulation that seeks to remunerate spatio-temporal, load-shifting flexibility provided by data centers (DaCes). Load-shifting flexibility is a key asset for power grid operators as they aim to integrate larger amounts of intermittent renewable power and to decarbonize the grid. Central to our study is the concept of virtual links, which provide non-physical pathways that can be used by DaCes to shift power loads (by shifting computing loads) across space and time. We use virtual links to show that the clearing formulation treats DaCes as prosumers that simultaneously request load and provide a load-shifting flexibility service. Our analysis also reveals that DaCes are remunerated for the provision of load-shifting flexibility based on nodal price differences (across space and time). We also show that DaCe flexibility helps relieve space-time price volatility and show that the clearing formulation satisfies fundamental economic properties that are expected from coordinated markets (e.g., provides a competitive equilibrium and achieves revenue adequacy and cost recovery). The concepts presented are applicable to other key market players that can offer space-time shifting flexibility such as distributed manufacturing facilities and storage systems. Case studies are presented to demonstrate these properties.