Impacts of electricity market reforms: from the perspective of economic-energy-environment system synergies

Electricity market reforms have a direct impact on the sustainable development of the economy-energy-environment system through electricity price mechanisms. This study outlines the mechanisms by which electricity price fluctuations influence key variables within the system and constructs a computable general equilibrium (CGE) model based on the 2020 social accounting matrix (SAM) table. The model is designed to assess the impact of price fluctuations in both thermal and clean electricity on the system under market-based pricing. Results suggest that moderate increases in thermal and clean electricity prices negatively affect economic growth, while improving energy efficiency. A moderate rise in thermal electricity prices significantly reduces carbon emissions across industries, whereas a moderate rise in clean electricity prices inhibits carbon reduction. The impact of thermal electricity prices on the economic-energy-environment system is considerably more significant than that of clean electricity prices, which can be attributed to the dominant role of thermal electricity within China's energy structure. Electricity market reforms are expected to accelerate the substitution of clean energy for thermal electricity. For a coordinated and sustainable development of the economy-energy-environment system, China should progressively deregulate electricity pricing. In addition, maintaining a balance between thermal and clean electricity prices is critical to optimizing clean energy's role in achieving net-zero emissions and enhancing its competitive advantage in the market.