  Data centers have emerged as promising resources for demand response,
particularly for emergency demand response (EDR), which saves the power grid
from incurring blackouts during emergency situations. However, currently, data
centers typically participate in EDR by turning on backup (diesel) generators,
which is both expensive and environmentally unfriendly. In this paper, we focus
on "greening" demand response in multi-tenant data centers, i.e., colocation
data centers, by designing a pricing mechanism through which the data center
operator can efficiently extract load reductions from tenants during emergency
periods to fulfill energy reduction requirement for EDR. In particular, we
propose a pricing mechanism for both mandatory and voluntary EDR programs,
ColoEDR, that is based on parameterized supply function bidding and provides
provably near-optimal efficiency guarantees, both when tenants are price-taking
and when they are price-anticipating. In addition to analytic results, we
extend the literature on supply function mechanism design, and evaluate ColoEDR
using trace-based simulation studies. These validate the efficiency analysis
and conclude that the pricing mechanism is both beneficial to the environment
and to the data center operator (by decreasing the need for backup diesel
generation), while also aiding tenants (by providing payments for load
reductions).
