Electricity Market Design and Risk Trading with Flexible and Endogenous Demand
With the growth of hyperscale computing and commensurate new large data center loads as well as increasing electrification, the price of energy is now an important factor in load-side investment decisions. Both the spot price as well as risk-trades (via contracting) can mitigate and manage price risk. However, incomplete markets in risk mean that modeling market outcomes requires solving computationally intensive equilibrium problems that may have multiple equilibria. We extend a method to reduce bilinear terms in a risk-averse general equilibrium problem to include flexible and endogenous demand as well as various forms of contracts including swaps and options. We use an exact rather than algorithmic approach and are thus able to make robust claims about the range of market equilibria in terms of reliability, emissions, and social welfare. Through case studies based on the New England and ERCOT systems, we find that including the risk appetite and flexibility of consumers can radically alter investment decisions. This work has implications for incorporating new large loads as an active market participant rather than treating them as an exogenous, inelastic parameter. We demonstrate that when exposed to market signals, new demand is not inherently harmful to reliability or average prices in the long-run so long as sufficient new supply can be connected. Price caps can lead to lower supply and demand investment, while hedging arrangements can better protect existing consumers.
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- Imperial College London
- South Kensington Campus
- London, England
- United Kingdom SW7 2AZ
- Building: Department of Electrical and Electronic Engineering
- Room Number: 909B
- Starts 18 March 2026 12:00 AM UTC
- Ends 26 March 2026 04:00 PM UTC
- No Admission Charge
Speakers
Conleigh Byers of Harvard University
Biography:
Conleigh Byers is a Director at FTI Consulting based in Zurich with expertise in electricity market design and power systems planning and regulation. She was previously an Environmental Fellow at Harvard University and the Harvard Kennedy School of Government, where she maintains an affiliation. Her research uses tools from operations research, economics, and electrical engineering to design energy systems, with a focus on the energy transition. She has lectured and published on topics including resource adequacy under deep decarbonisation, investment cost recovery with high shares of variable renewables, flexible demand, capacity markets, pricing with unit commitment, and locational pricing. She received a doctorate in Electrical Engineering from ETH Zurich, a dual masters from the Massachusetts Institute of Technology in Electrical Engineering & Computer Science and Technology & Policy, and an undergraduate degree from Princeton University.
