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Working Paper
Processing Power: The Effect of Data Centers on Wholesale Electricity Markets
Data centers are reversing two decades of flat U.S. electricity demand. We estimate their effect on wholesale electricity markets using an hourly, unit-level dispatch model in which 23 U.S. regional markets trade over capacity-constrained interfaces. Data centers raised wholesale prices by 6.9 percent nationally by 2025 and by 15.0 percent in northern Virginia; under our preferred scenario, the national effect reaches 12.3 percent by 2028. Trade spreads these effects to regions hosting few data centers. Roughly half the increase in generator payments is a transfer to inframarginal generators. ...
Working Paper
Processing Power: The Effect of Data Centers on Wholesale Electricity Markets
Artificial-intelligence-driven data centers are reversing two decades of flat U.S. electricity demand and have generated questions about how this growth will impact electricity prices. We quantify this effect using an hourly, unit-level least-cost dispatch model covering wholesale electricity markets in the continental United States. We find that existing data centers have already increased wholesale prices by 3 to 5% on average nationwide, with substantially larger effects in regions hosting major data center corridors. Extending the model through 2028, we show that if proposed construction ...
Working Paper
Global Transportation Decarbonization
A number of policy proposals call for replacing fossil fuels in the name of decarbonization, but these fuels will be difficult to replace due to their as-yet unrivaled bundle of attributes: abundance, ubiquity, energy density, transportability and cost. There is a growing commitment to electrification as the dominant decarbonization pathway for transportation. While deep electrification is promising for road vehicles in wealthy countries, it will face steep obstacles. In other sectors and in the developing world, it’s not even in pole position. Global transportation decarbonization will ...