The Compute Heat Rate
Now published with the Social Science Research Network
I am happy to share that the Compute Heat Rate™ (CHR) has been published with the Social Science Research Network.
You can check out the full paper on SSRN1.
The CHR is a single metric: the maximum electricity price an AI data center operator can rationally pay before the computation becomes uneconomic. The demand-side analogue to the gas heat rate, built entirely from public data.
Blended result across AI workload types: ~$3,270/MWh.
Gas heat rate benchmark: ~$50/MWh.
That gap is the story. The paper explains what it means for wholesale price formation, and for every other electricity consumer on the grid.
More soon.
Hans Royal is the originator of the Compute Heat Rate™ (CHR) framework. All views are his own and do not represent those of any employer or affiliated organization.
Royal, Hans, The Compute Heat Rate: Quantifying AI-Driven Electricity Price Tolerance
and Its Implications for Wholesale Market Repricing (February 28, 2026).
Available at SSRN: http://dx.doi.org/10.2139/ssrn.6322318