Electrifying nearly everything is necessary as the world transitions to net zero carbon emissions. Electricity demand will double with rapid innovation in supply and demand. As the share of intermittent renewables, primarily solar and wind, grows and extreme weather events become more frequent, balancing supply and demand every second becomes more challenging. Restructured wholesale markets provide real-time balancing. The market determines clearing prices that balance supply and demand, motivating operations to maximize social welfare.

Prices vary by time and place. Electricity prices, typically about $40 per megawatt-hour, may be negative when renewable production is high and thousands of dollars during extreme weather. Participants attempt to manage this risk with forward trade, but several market failures limit risk management and undermine efficient investment. Electricity markets have struggled with these challenges for decades.

Our market platform addresses the critical market failures that have hindered efficient electricity investment and stifled innovation: incomplete markets, market power, and uncertainty. Once adopted, this research will expedite decarbonization. It leverages robust market designs to foster innovation and competition, bringing essential flexibility for reliable and resilient electricity in a setting with high renewable penetration. The research identifies the need to involve demand, particularly during extreme weather. Such a market significantly enhances price incentives, enabling efficient investment and operation of participants' resources. Notably, retail consumers stand to benefit from these reforms. The result is a net-zero economy that provides reliable and resilient electricity at the least cost.