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The electricity system faces load-matching pressure due to imbalances during peak times or extreme weather, making it costly to phase out coal-fired electricity and reduce carbon emissions. The electricity spot market pilot (ESMP) policy provides reserve capacities for grids, but its effectiveness on green economic development is still unknown. Therefore, using panel data from 286 cities in China from 2006 to 2019, this study analyzes the impact of the ESMP policy on green economic performance. The results indicate a significantly positive effect of the ESMP policy on green economic performance. In addition, the policy could help to phase out 6.3% of coal-fired capacity, on average, reduce coal-fired equipment utilization hours by 0.9%, and increase renewable equipment utilization hours by 4% in pilot regions. These findings provide new insights into ESMP policy and green economic development. [ABSTRACT FROM AUTHOR]