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The marketization of green electricity trading and investment decisions of new energy enterprises

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  • Lin, Boqiang
  • Li, Jiangnan

Abstract

Green electricity trading, a key mechanism to promote new energy consumption and market development in China, has seen continuous reforms. The government's efforts to integrate green electricity into the power market have stabilized revenue expectations, but subsidy phase-out and increased competition have raised concerns about investment decisions. Using corporate financial data from Q4 2022 to Q1 2025 and manually collected green electricity certificate trading data, this study employs fixed effect models and support vector machine algorithms to investigate the nonlinear impact of fluctuations in green certificate prices on enterprise investment decisions. The study finds: (1) A decrease in green certificate price fluctuations initially increases, then decreases the fixed asset growth rate, forming an inverted U-shape. (2) When volatility stabilizes at low levels, speculative arbitrage opportunities shrink, delaying investment. (3) The inverted U-shape is more prominent in photovoltaic and energy storage firms, with high-turnover firms more sensitive to volatility and efficient firms more driven by market signals. This study suggests optimizing the green electricity certificate trading market mechanism by adjusting the supply elasticity of green certificates to create reasonable fluctuation space.

Suggested Citation

  • Lin, Boqiang & Li, Jiangnan, 2026. "The marketization of green electricity trading and investment decisions of new energy enterprises," Energy Policy, Elsevier, vol. 210(C).
    • Handle: RePEc:eee:enepol:v:210:y:2026:i:c:s0301421525005440
    DOI: 10.1016/j.enpol.2025.115037
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