Conformal blocks from vertex algebras and their connections on $\overline{\mathcal{M}}_{g,n}$

We show that coinvariants of modules over conformal vertex algebras give rise to quasi-coherent sheaves on moduli of stable pointed curves. These generalize Verlinde bundles or vector bundles of conformal blocks defined using affine Lie algebras studied first by Tsuchiya-Kanie, Tsuchiya-Ueno-Yamada, and extend work of a number of researchers. The sheaves carry a twisted logarithmic D-module structure, and hence support a projectively flat connection. We identify the logarithmic Atiyah algebra acting on them, generalizing work of Tsuchimoto for affine Lie algebras.