The impact of electricity sales side reform on energy technology innovation: An analysis based on SCP paradigm

• Published in: Energy economics 2024-08, Vol.136, p.107763, Article 107763
• Main Authors: Li, Xueqin, Zheng, Zhuoji, Luo, Beier, Shi, Daqian, Han, Xianfeng
• Format: Article
• Language: English
• Subjects: Difference-in-differences (DID); Electricity sales side reform (ESSR); Energy technology innovation (ETI); Structure-conduct-performance (SCP) framework
• ISSN: 0140-9883
• DOI: 10.1016/j.eneco.2024.107763

The Electricity Sales Side Reform (ESSR) is a market-oriented reform directly targeting the electricity terminal, aimed at fostering a diversified and fully competitive market structure, particularly to encourage energy technology innovation (ETI). This study establishes a Structure-Conduct-Performance (SCP) framework, selects Chinese A-share listed companies from 2013 to 2019 as the research subjects, and employs the multi-period difference-in-differences (DID) method to examine the impact of ESSR on ETI. The primary findings are as follows: (1) ESSR effectively promotes ETI, indicating that changes in market structure enhance energy innovation performance. (2) ESSR stimulates long-term innovation incentives rather than short-term profit impulse, signifying that it intensifies market competition, optimizes resource allocation, and guides information disclosure, thereby supporting firms' ETI. This validates the theoretical paradigm of SCP. (3) The positive impact of ESSR on ETI exhibits heterogeneity. On the electricity generation side, the catalytic effect of ESSR on ETI is more pronounced in regions with lower traditional energy endowments and greater green electricity generation potential. On the electricity sales side, the incentive effect is more prominent in regions with higher electricity prices and a lower capacity in the electricity sales market. On the electricity consumption side, the incentive effect is stronger for enterprises with a cleaner energy structure and increased green investments. Therefore, our research findings bridge gaps in the existing literature and offer valuable insights for achieving a high level of ETI and facilitating energy structure transformation. •The electricity sales side reform has significantly promoted energy technology innovation.•The electricity sales side reform promotes energy technology innovation through long-term innovation incentives rather than short-term profit impulse.•The effect of the electricity sales side reform is heterogeneous in different aspects.