How do hybrid price signals from the spot market and carbon emission trading market affect power generation investment? An empirical study in Beijing-Tianjin-Hebei region

Market-oriented reforms are increasingly vital for power resource optimization, yet the dynamic feedback between endogenous price signals and investment planning remains underexplored in driving decarbonization. However, most existing generation expansion planning studies under low-carbon transition predominantly neglect the dynamic interactions between short-term market dispatches and long-term capacity investments, thereby constraining the maximization of market price signal efficacy and undermining the capture of macro-level emergent characteristics. This study proposes a multi-agent model integrating spot-CET market with policy interventions to analyze these dynamic interactions, including both economic and non-economic factors involved in generation expansion. The two-stage market clearing model embedded in the simulation generates endogenous electricity prices through supply-demand relationship, while assessing how hybrid price signals and carbon caps jointly effects the merit-order and investment pathways. Using the Beijing-Tianjin-Hebei region as a case study, results demonstrate that the hybrid price signals of spot-CET market in generation expansion planning accelerates the adoption of carbon reduction technology and reveal the insufficiency of purely price-driven investment mechanisms to achieve carbon neutrality without external policy interventions. By adding the policy constraint of carbon caps to the market clearing, it leads to a 23.8 % decline in cumulative carbon emissions. This highlights the importance of the synergy between spot-CET market price signals and low-carbon policies. Moreover, the merit-order effect may primarily account for electricity price volatility and the underutilization of flexible units. Corresponding policy recommendations are formulated to address these systemic inefficiencies.