2026: Designing a Curtailment Credit Market: Leveraging Data Center Development to Incentivize Grid-Wide Decarbonization and Affordability (EDF)
The project aims to develop and test a novel mechanism, named Curtailment Credit Market (CCM), that leverages AI data centers’ willingness to pay for uninterrupted power to unlock grid-wide demand flexibility. This willingness to pay is driven by the exceptionally high value of computation. Under CCM, when grid operators issue curtailment instructions, data centers can purchase tradeable credits from flexible loads that reduce consumption on their behalf. This transfers capital from high-profit tech operators to ratepayers while activating underutilized flexibility. Using network-constrained simulations and industry collaboration, we will test how this market mechanism can achieve simultaneous decarbonization and affordability goals while addressing growing AI data center power demand.
Cornell: Max Zhang (Cornell Duffield Engineering / Mechanical and Aerospace Engineering)
EDF: Thomas Brindle (Director, Legislative & Regulatory Analysis, U.S. Region)