Year: 2026
Type: article
Abstract: Can incremental market reforms stimulate clean energy transitions in coal-dependent systems? China's electricity spot market pilot in Guangdong, which is a regulated experiment in partial liberalization, reveals how even limited market exposure can spark systemic transformation. Leveraging quarter-hourly, unit-level generation data, and a novel causal inference approach, we demonstrate that the implementation of market mechanisms decreased coal-fired power output by 6.6% while increasing renewable utilization and system flexibility reserves. The "green spark" originated from two mechanisms: (i) exposing cost structure differences between inflexible coal units and near-zero-marginal-cost renewables and (ii) reducing renewable curtailment through market-driven dispatch. However, the reform's decarbonization potential was partially offset by an increasing dependence on gas-fired and small coal units for flexibility. While partial marketization can drive energy transitions, legislative safeguards are needed to address flexibility gaps. These insights guide developing economies in accelerating renewable adoption through incremental institutional innovation.
Source: PNAS Nexus
Authors: Xinya Hao, Ao Sun, Feng Song, Huanhuan Zheng, Lin Zhang
Language: English
Subfield: Electrical and Electronic Engineering
Field: Engineering
Domain: Physical Sciences
Open Access status: gold
Estimated APC paid: $4,202
OpenAlex ID: W7147684327
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