On Coordination of Smart Grid and Cooperative Cloud Providers

Cooperative cloud providers in the form of cloud federations can potentially reduce their energy costs by exploiting electricity price fluctuations across different locations. In this environment, on the one hand, the electricity price has a significant influence on the federations formed, and, thus, on the profit earned by the cloud providers, and on the other hand, the cloud cooperation has an inevitable impact on the performance of the smart grid. In this regard, the interaction between independent cloud providers and the smart grid is modeled as a two-stage Stackelberg game interleaved with a coalitional game in this article. In this game, in the first stage the smart grid, as a leader chooses a proper electricity pricing mechanism to maximize its own profit. In the second stage, cloud providers cooperatively manage their workload to minimize their electricity costs. Given the dynamic of cloud providers in the federation formation process, an optimization model based on a constrained Markov decision process (CMDP) has been used by the smart grid to achieve the optimal policy. Numerical results show that the proposed solution yields around 28% and 29% profit improvement on average for the smart grid, and the cloud providers, respectively, compared to the noncooperative scheme.